It won’t have escaped your attention that we’re in the midst of a multi-year bull market. It also won’t have escaped your notice that the current bull run is playing out very differently from anything that’s gone before. While the basics remain the same – most major assets are on an upward trend – the finer details are quite unique.
Previous bull markets have been characterized by extreme breakouts, high volatility, and eye-watering gains claimed by overnight millionaires. This cycle has been more sedate. But don’t let the comparative calm of the crypto market throw you: the best of this bull is yet to come. And where we’re headed next, you’ll want to buckle your seatbelt and load up on low caps. That’s right: altcoin season is nigh, bringing with it the euphoria and FOMO that only crypto can conjure.
Some Halves Are Bigger Than Others
If you’re a veteran of multiple crypto bull markets, or have simply studied market history in search of patterns, you’ll be aware that the current cycle hasn’t followed the formula. Traditionally, Bitcoin (BTC) hits a new all-time high some months after the halving, but this time, the market has front-ran Bitcoin’s four-yearly mining reward halving.
The reasons for this are well documented, with the approval of Bitcoin ETFs credited as the primary catalyst for BTC’s premature all-time high (ATH). This tailwind, which has lifted all major digital assets, isn’t just limited to the US market; institutions the world over can now gain exposure to crypto thanks to ETFs being approved in the likes of Hong Kong and Australia likely to be next on a rapidly growing list.
Why will Bitcoin go higher during this cycle? Because this time around more people with more money can buy it. That, ultimately, is the reason why BTC is up 60% for the year to date and 160% over the last 12 months. But enough about Bitcoin. Because while it might have been the catalyst for the current bull market, it’s likely to take a back seat on the next leg up, giving other coins their time to shine.
Let’s Talk About Memes
The narrative that has kept the retail arm of crypto busy this year hasn’t been DeFi, GameFi, or DePin: it’s been memecoins. In the previous bull market, a handful of memecoin winners brought great riches to those who timed their entry and exit well (DOGE, FLOKI, SHIB), but the current cycle has confounded expectations by ushering in a poly-memecoin era of 100x-ers whose lifespan might be markedly shorter but whose profitability has proven a perennial lantern luring moths to its flame.
While it’s debatable whether Solana needs its 100th dogcoin or Base another catcoin, here we are. And for all the criticism that memecoins receive, they’ve proven an effective mechanism for kickstarting economic activity on new networks, rewarding early supporters, stress-testing emerging L2s, and generally putting the fun in crypto fundamentals. With blockchains including Avalanche now allocating investment to the best memecoin projects, this is a crypto sector whose genie won’t be placed back in the bottle.
When Alt Season?
As the axiom goes, history doesn’t repeat but it does rhyme. While this bull market is proving to have its own peculiarities versus anything that’s gone before, certain patterns persist. Chief among these is alt season: the notion that after outperforming the rest of the market for months on end, Bitcoin dominance (its market cap versus that of all other cryptos) will eventually wane, prompting a brief altcoin season in which other digital assets take center stage.
The thesis goes like this: first BTC hits new all-time highs, then ETH follows suit, and then altcoins do their thing. The first part of this model has already occurred, while ETH has belatedly begun to rally: it’s up 20% in the past month but, crucially, still down 26% from its previous ATH. “Altseason will happen,” predict its proponents. “It's only a matter of time.”
BTC dominance is currently at 54%. In the 2017 bull market, it dropped to just 32% as alts kicked into high gear, while in 2021 it fell from 62% to 41% during the same phase. This is the key metric to watch to determine when money is set to flow from Bitcoin into the long tail of crypto assets, elevating many small and mid-cap coins to record highs.
Don’t Fade Bitcoin
After examining the bull case for altcoins, this may sound contradictory, but Bitcoin isn’t done. The ATH of $73,000 it set in March is just 5% higher than that reached in the last bull market. Empirically, the crypto bull market hasn’t peaked until BTC is up at least 2x over its previous ATH. That doesn’t guarantee that $100,000+ BTC is inevitable, but there is compelling evidence that Bitcoin has a lot further to run.
Don’t let alts and memecoins distract from the ultimate goal, in other words: to accumulate as much BTC as possible. While the end game remains the same, the means of achieving that goal have evolved. Traders now have a much broader range of tools at their disposal to help with market timing and profit maximization, from the Bitcoin Bull Run Index to copy trading, which has leveled the playing field by allowing novice traders to take their cues from pros by mirroring their positions. AI has also emerged as a powerful tool for everything from gauging market sentiment to controlling smart trading bots.
The nature of market economics dictates that not everyone can win, even during a prolonged bull market. But at the very least everyone, from the humblest trader to the most seasoned crypto OG (original gangster), has a fair opportunity to compete. Which brings us back to memecoins. One of the reasons why retail has taken to these tokens with gusto is because, for all their flaws, they are the closest the industry has to a fair launch. No VC allocations: just pure PvP in which the spoils go to the shrewdest traders capable of identifying the memes with real sticking power.
There’s a lot that’s still to be decided concerning this bull market including its duration and whether it ends with a bang, a slow retracement, or morphs into the mythical supercycle in which the party technically never ends. But this much can be said for certain: the best is still to come. Barring a major black swan event that impacts the macro outlook, the second half of 2024 will be marked by benchmarks and breakouts that put anything the bull market has pulled up until now in the shade. Don’t fade it.
This article is from an external unpaid contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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