The #1 Reason Why Altcoins Are F*cked This Cycle [The Honest Truth]

Summary

This video delves into the primary issue affecting altcoins' performance, explaining the market's current state and the reasons behind altcoins' underperformance. The host outlines the impact of an influx of new tokens and the challenges they pose, including high valuations and token dilution. He suggests that retail investors are becoming more discerning, potentially leading to a shift in market dynamics. The video emphasizes the importance of selecting altcoins with strong narratives, unique value propositions, clever tokenomics, and low inflation for better investment decisions.

Takeaways

• 📉 The biggest problem with altcoins currently is their underperformance relative to Bitcoin, which is significantly due to an oversupply of new tokens entering the market.
• 📈 The crypto market, particularly altcoins, is experiencing a massive influx of new tokens, with over 1 million new crypto tokens launching since April, many of which are on the Solana network.
• 💰 The oversupply is largely a result of venture capital (VC) funding during the 2021 bull run, which led to many projects being developed and waiting for the right time to launch.
• 🕒 There is a time lag between VC funding and project launches, often 3 to 4 months or more, which has led to a concentrated launch period in early 2024 when market conditions improved.
• 🌐 The increase in token supply has not been met with a proportional increase in liquidity, leading to a dilution effect similar to inflation, where the value of existing tokens decreases.
• 📊 Many newly launched altcoins are struggling to maintain price levels, with high-profile examples like Wormhole, ZK Sync, and Layer Zero seeing significant downticks from their initial launch valuations.
• 🔄 The market may be shifting towards favoring public market investments over private market deals, as retail investors are realizing they can get better terms by buying into projects post-launch rather than participating in pre-launch funding rounds.
• 💡 Investors should look for altcoins with a clear narrative, a unique selling proposition (USP), clever tokenomics, a strong community, and low inflation to ensure long-term potential and stability.
• 🚫 The current market dynamics are discouraging innovation, as many projects are mere copies of each other without offering anything new or improved, leading to market saturation and a lack of differentiation.
• 🤑 The success of a project is increasingly tied to its ability to build a strong community, which is often driven by price appreciation and the project's alignment with crypto culture and trends.
• ⏳ For traders and investors, focusing on altcoins with low inflation during their trade window is crucial, as this can help mitigate the impact of the overall increasing supply in the market.

Q & A

What is the main issue discussed in the video regarding altcoins?

The main issue discussed is the underperformance of altcoins in the market, which is attributed to a massive influx of new tokens and the subsequent dilution effect on the market.

What is the current state of Bitcoin according to the video?

Bitcoin is described as being relatively indecisive, with key support levels at 64,000 and a range low at 60,000. It has been experiencing choppy price action and is currently just above the 64.7k level on the weekly chart.

What factors are contributing to the underperformance of altcoins compared to Bitcoin?

Factors include a record number of new token launches, significant token unlocks from previous years, and a lack of new liquidity in the market to support the increased supply.

How does the video suggest the altcoin market's current dynamics are affecting investor sentiment?

The video suggests that the current dynamics are causing retail investors to lose faith in new altcoin launches, leading to a preference for meme coins and a reluctance to participate in high valuation projects.

What is the role of VCs in the current altcoin market situation?

VCs have been investing in projects during the bull run, leading to a surge in new projects being funded. However, the subsequent delays in launching these projects due to market conditions have resulted in a flood of new tokens entering the market in 2024, contributing to the dilution issue.

What is the video's stance on the importance of asset selection in the 2024 crypto cycle?

The video emphasizes that asset selection is crucial in the 2024 cycle, as it is not like the 2021 cycle where random altcoin purchases could yield profits due to the overall bullish market.

What is the video's perspective on the German government selling Bitcoin?

The video suggests that while the news of the German government selling Bitcoin may have caused panic, it is not a significant enough amount to impact the market's liquidity, and the market should be able to absorb it if spread over time.

What are the video's recommendations for selecting the right altcoins to invest in?

The video recommends looking for altcoins with a clear narrative, a unique selling proposition (USP), clever tokenomics, a strong community, and low inflation during the trade window.

How does the video suggest the market can turn around for altcoins?

The video suggests that a shift towards more public market participation, with projects launching at lower valuations and offering better liquidity to retail investors, could help turn around the market for altcoins.

What are the video's recommendations for altcoin investors moving forward?

The video recommends investors to remain cautious, do thorough research, and focus on projects with strong fundamentals and realistic growth potential.

Outlines

00:00

📉 Altcoins Underperformance Issue

The speaker introduces the video's focus on the significant problem of altcoins underperforming in the market, which they attribute to being the primary reason for the lackluster performance over recent months. They suggest that understanding the concept to be discussed will enable viewers to make better investment decisions in the current crypto cycle, emphasizing the importance of asset selection and the shift from the 2021 market dynamics where random altcoin purchases led to gains.

05:02

📈 Market Update and Bitcoin Analysis

The video script provides a market update, discussing Bitcoin's price levels and the potential for bullish or bearish movements based on key support and resistance levels. It mentions the influence of news events, such as MicroStrategy's acquisition of additional Bitcoin and the German government's sale of Bitcoin, on market sentiment and price action. The script also touches on the altcoin market's performance, noting the relative weakness of altcoins compared to Bitcoin.

10:05

💡 Understanding Altcoin Market Dynamics

The speaker delves into the dynamics affecting the altcoin market, highlighting the significant drop in the value of many altcoins over the last month. They propose that the root cause of this issue lies not in the liquid markets but in the private markets, suggesting that the current state of altcoins is a result of capital inflows and investment patterns from venture capitalists (VCs) during the 2021 bull run.

15:08

🚀 Impact of VC Funding on Crypto Projects

This paragraph examines the impact of VC funding on the crypto space, noting a peak in deal count and investment during Q1 2022. The speaker discusses how project founders and VCs acted as opportunists during the bull market, leading to an influx of new projects. However, due to market conditions, many of these projects delayed their launches until recently, causing a surge of new tokens entering the market simultaneously, which may contribute to the current market dynamics.

20:09

📊 Token Launch Surge and Market Dilution

The speaker presents data on the surge in new token launches, particularly in 2024, which they argue has led to an oversupply in the market. They compare the increase in token supply to inflation, suggesting that the new tokens are reducing the purchasing power of existing crypto assets. The paragraph also discusses the lack of significant inflows of new capital to counterbalance the increased supply, leading to a bearish pressure on altcoin prices.

25:09

🤔 The Shift Towards Public Market Investments

The script suggests a potential shift in the market dynamics where retail investors may find better value in public market investments compared to private market deals. It points out that some tokens are trading near their private investment valuations, offering retail investors the opportunity for immediate liquidity without the lock-up periods associated with VC investments. This could indicate a maturing market where easy wins for VCs may be ending.

30:11

🛠 Criteria for Selecting Successful Altcoins

The speaker outlines criteria for selecting altcoins with potential, emphasizing the importance of a clear narrative, unique selling proposition (USP), clever tokenomics, strong community, and low inflation. They argue that these factors are crucial for countering the overall market dilution and for identifying projects that can succeed despite the challenging market conditions.

35:12

🌐 The Importance of Market Innovation

The paragraph discusses the need for innovation in the crypto market, suggesting that the underperformance of many recent launches is a signal for the market to innovate. The speaker predicts that projects with real innovation, clear narratives, and strong community support will be the ones to succeed, as the market rewards uniqueness and utility.

🔑 Conclusion: Navigating the Altcoin Market

In conclusion, the speaker reiterates the importance of understanding the current market dynamics and being selective when investing in altcoins. They highlight the need for investors to focus on projects with strong fundamentals and the potential for price appreciation, rather than simply following market narratives without considering the economic aspects of token issuance and supply.

Keywords

💡Altcoins

Altcoins refer to cryptocurrencies other than Bitcoin. They are essential to the video's theme as the speaker discusses the challenges and market dynamics affecting these digital assets. The script mentions altcoins underperforming and explores reasons behind their current market state, such as increased supply and token unlocks.

💡Underperforming

Underperforming in the context of the video describes a situation where altcoins have not met market expectations in terms of growth or returns. The script uses this term to highlight the poor relative performance of altcoins compared to Bitcoin over the last few months.

💡Liquidity

Liquidity in financial terms refers to the ease with which assets can be bought or sold in the market without affecting their price. The video discusses the impact of liquidity on the altcoin market, noting that while there has been an increase due to the Bitcoin ETF, it is not sufficient to handle the new supply of tokens.

💡Token Unlocks

Token unlocks refer to the release of tokens that were previously locked or restricted from trading. The script mentions token unlocks as a source of increased supply, which can lead to price dilution and downward pressure on altcoin prices.

💡Inflation

In the video, inflation is used metaphorically to describe the increase in the supply of tokens in the market, similar to how printing more currency can devalue a nation's money. The script explains that token dilution in the crypto market acts like inflation, reducing the purchasing power of existing tokens.

💡VC Investment

VC, or venture capital, investment in the script refers to the funding provided by venture capitalists to startups and projects in the crypto space. The video discusses how a peak in VC investment in Q1 2022 has led to a surge in new projects and tokens entering the market.

💡Private Markets

Private markets in the context of the video are where investments in projects occur before they become publicly available. The script explains that a high level of VC activity in the private markets has resulted in a backlog of projects waiting for the right time to launch in the public markets.

💡Public Market

The public market is where retail investors can buy and sell securities, including cryptocurrencies. The video contrasts the private markets with the public markets, indicating a skew where private investors often get better deals than the public market investors.

💡Tokenomics

Tokenomics refers to the economic aspects of a cryptocurrency, including its distribution, supply, and utility. The script suggests that clever tokenomics, such as buybacks and burns, can help with price appreciation and community building, which are important for a token's success.

💡Community Building

Community building in the video refers to the process of creating and nurturing a user base that supports and engages with a cryptocurrency project. The script emphasizes the importance of a strong community for the success of a token, especially when it comes to price appreciation and long-term sustainability.

💡Low Inflation

Low inflation in the context of the video means a minimal increase in the token supply over time. The script advises that investors should look for tokens with low inflation, especially during their trade window, as it can indicate a healthier economic model and potentially lead to price stability or growth.

Highlights

The biggest problem with altcoins is their underperformance due to a massive issue in the market.

Understanding the concept presented in the video is crucial for better decision-making in altcoin selection.

The importance of asset selection in the 2024 cycle cannot be overstated, as it is a make-or-break factor unlike the situation in 2021.

Bitcoin's current market situation with key support and resistance levels discussed.

MicroStrategy's acquisition of additional Bitcoin and its market impact, highlighting the tendency for the market to reverse after such announcements.

The German government's sale of Bitcoin and the panic it caused in the market, with a counterpoint on why it might not be a reason to panic.

The current state of altcoins, with many experiencing significant drops in value over the last month.

The correlation between Bitcoin's price movements and altcoins' exaggerated responses, especially on the downside.

The argument that the altcoin market's dynamic shift is underway and its potential ramifications.

The connection between the private markets and the current state of altcoins, with a focus on VC funding and project launches.

The record amount of new tokens launched in 2024 and the impact on market liquidity and token supply.

The concept of token dilution in the market as a form of inflation, affecting the purchasing power of crypto assets.

The need for more liquid funds in crypto and the potential shift from private to public market dynamics.

The potential end of easy VC wins as retail investors become more discerning and the impact on project valuations.

The criteria for selecting altcoins, including clear narrative, USP, clever tokenomics, strong community, and low inflation.

The upcoming release of the top 10 low inflation altcoin picks.

Transcripts

in today's video I'm going to be

explaining the biggest problem with

altcoins right now this is a massive

issue in the market and it's actually

the number one reason why altcoins have

been underperforming over the last few

months so to understand why this has

been the case and what happens next in

the altcoin market you need an

understanding of the concept that I'm

going to present to you in today's video

and once you understand this concept

then of course you will make much better

decisions when it comes to selecting the

right alt coins to buy and hold this

crypto cycle and as we know asset

selection in the 2024 cycle so far has

been make or break it's not like 2021

where you can just buy random altcoins

and everything is going up at once you

have to be much more selective and

that's why I believe today's video

although the thumbnail and the title may

be bearish is one of the most important

videos that I've put out on the channel

over the last couple of weeks so sit

back relax and hopefully you learn

something and it can make you a better

crypto investor and Trader before we get

into the meat and potatoes of today's

video Let's firstly just do a quick

market update Bitcoin on the weekly is

still just above the

64.7k level it is floating with Danger

on the weekly although we do have

another 3 Days To Go to close out the

week it has been choppy price action for

Bitcoin so far this week on the daily

chart we did lose this mid-range level

at

66.5 you do have this other level on The

Daily which is of importance at 64,000

as well but in terms of bullish price

action in the market you do want to get

a Reclamation of that 66.5k level on the

daily if you do want to be targeting

Range High for Bitcoin which is around

73k but for now Bitcoin relatively

indecisive looks like it wants to keep

going lower but of course we do have

this key support level at 64 if you

break that support that is the last

support until the range low at 60,000

however we did see some signs of a

reversal what happens today is going to

be up to the markets recently what's

been happening is you've seen a pump

during the Asia hours it's taken price 2

to 3% upwards and then the American

trading hours have subsequently dumped

the price on the US Open it's been

happening for the past few weeks with

these weak us opens why did Bitcoin

reverse just a tiny bit yesterday uh

after it did have a reversal well there

were a couple reasons at least on the

surface these seem like valid reasons

you had micro strategy acquiring an

additional 12,000 Bitcoin pretty much as

soon as they announced this the market

did start to dump it's funny because

although at face value you might say oh

Michael sailor buying more Bitcoin you

know it's really bullish for the market

and you think the market would pump it

actually often does dump when he

announces this because it kind of

explains or assigns at least you know

some sort of explanation behind the bid

that we saw in the days prior and once

that information is now public on the

market the market does have a tendency

to reverse at least that's what we're

seeing here we also saw and this was

obviously the big news on Twitter

yesterday it was pretty much everywhere

that the German government is selling

Bitcoin you can see they have a wallet

with 3 billion Bitcoin in that wallet

they sent 130 million of the 3 billion

to exchanges yesterday as you can see on

Arkham they're still holding the

remaining three billion this caused a

lot of panic that's when the market

started to drop although I do have a

Counterpoint for this and I don't

believe it's a reason to panic and it's

the fact that this is $3 billion of

Bitcoin they're very unlikely to dump

this all at once even if they have a

full intent to sell this entire stack

they're likely to do it over a period of

weeks if not months and $3 billion in a

market like Bitcoin which trades $20

billion of volume per day is not a

significant enough amount of liquidity

to see a major price dump especially if

these funds are spread out over a period

of time I highly doubt they stack Jeet

$3 billion onto the market and even if

they do the market will be able to

absorb but we do know narratives in this

market tend to drive price and the whole

Narrative of you know the German

government is selling Bitcoin certainly

wasn't a bullish way to start the

morning in the US trading hours but

interestingly here you can see horse

does this tweet saying no need to invent

narratives about Germany selling Bitcoin

that caused this move just open a tick

chart of Nvidia SPX and Bitcoin from the

New York Stock Exchange open and you can

see that after the initial relief bounce

on open pretty much everything did end

up bleeding for the rest of the day so

he's basically saying look it was a

market wide selloff and you can't fully

attribute this to the whole German

narrative um although it makes for a

great story of course and then in terms

of an altcoin update total 3 is still

above this major support level at the

560 level technically this is a higher

low compared to the previous liquidation

week on April 14th if you are on the

daily chart but we did break below the

daily EMA so flirting with dangerous

levels right now you do have this major

support level which is in my opinion a

pretty decent buy zone for a lot of

altcoins as long as that corresponds

with individual altcoin charts on

yesterday's show I went over some of the

altcoins that I am currently leaning

towards in the market I recommend

watching the shows from this week if

you've missed them because there is a

lot of valuable information pertaining

to this topic in those videos um but the

short of it is around these levels

during these major liquidation cast

scades if you are at a high time frame

level for a quality alt I actually think

from a macro perspective looking at the

remainder of the year that is a decent

opportunity to accumulate that position

of course there's no way to know exactly

what happens over the next few days and

I'm not in the business of really

speculating on what happens over the

next few days but we came here not just

for a market update but to discuss a

really really really important Dynamic

right now in the market which is

affecting price action overall in front

of you you can see the weekly

performance for a lot of alt coins many

alts like stocket injective whiff Stacks

bunk arweave Celestia a bunch of coins

are down 15 20% and over the last month

you have many coins down 30 40 50% and

these aren't just small cap coins I'm

talking you know major coins in the

market that are bleeding 40 50% and it

seems like every time Bitcoin makes a

move to the downside and this is

verifiable by the data here so from the

high to the current level Bitcoin

dropped

133% and on total three from the high to

the current level it dropped 25% so it

seems like every time Bitcoin makes a

move to the downside altcoins move

significantly more to the downside but

when Bitcoin pumps alt struggle to

sustain a pump apart from the rally that

we saw in March so it's basically

operating on relative weakness versus

Bitcoin for the entirety of the altcoin

market now a lot of people are wondering

why is this case why are altcoins

bleeding and there's actually a really

interesting answer behind this which I

believe holds the key to a how we're

going to get out of this potentially

later in the year B how you can actually

benefit from this and make sure you're

not in the weak altcoins and see it

explains why I think the biggest Dynamic

shift in the altcoin market is currently

underway and that's going to have major

ramifications for the market so I'm

really Keen to dig into this logic here

by the way thanks to everyone that tuned

into the miles high club charting stream

earlier today basically me and Paradise

the amazing low time frame Trader in the

miles high club got together and we went

through a bunch of charts almost 2 hours

of just charting your altcoin setup so

this is something that I am bringing to

the Discord every single week me and

Paradise are basically going to take

your chart request so any charts you

have we're going to chart them live and

I love the mixture of fundamental

discussion which came from my side but

also aligning that with the technicals

on paradise's side so if you are in the

MS high club I recommend going and

watching this video again because there

were lots of Alpha and altcoin setups

for the coming weeks which could come to

fruition and we know Paradise has been

absolutely smashing it in the group over

the past couple of weeks with his low

time frame trades he runs what we call

in the miles high club The Paradise

Island with his Market commentary crypto

trade setups Etc alongside all of our

other amazing content creators in there

you for example doc who's our high time

frame Trader he's more of a swing

positional Trader for those that like to

trade on the higher time frames we've

got Fabian who's our altcoin specialist

in the small cap realm he's also really

in tune with the macro side of the

market so predicting potentially how the

market is going to respond to macro news

this obviously helps with positioning

and there's a bunch of stuff we're doing

in the group as well we've got giveaways

going on at the moment for the Top

members we've got idos coming very very

very soon in fact during this next month

we're going to be launching some of the

first idos in in the Mars high club for

members which is going to be absolutely

amazing alongside of course a bunch of

other research there the reason I'm

saying this is because this video may be

the last chance you have to join the

weit list if you've been thinking about

joining because the weit list closes in

4 days but we are very close to filling

up the 100 spots here so if you have

been considering joining the Mars high

club which is my exclusive Community for

crypto Alpha we have the best analyst of

the game in that group you can click the

link in the description and sign up for

the wait list the first 100 will be let

in in 4 days time and then after that

the group is going to be closed for at

least another month which basically

means if you want access to all that

stuff that's coming over the next month

like the idos like the weekly charting

streams and something that I'll announce

later in the video you're going to want

to be in the group for this next month

so I'm giving you a chance here using

the link in the description if that is

you because once it's closed it is

closed so let's get on to the issue at

hand and as I mentioned before this

basically explains why we are currently

in the predicament that we are in in

terms of altcoin showing relative

weakness not really pumping when we do

get bullish Catalyst and then when we

get bearish headwinds they're selling

off more than Bitcoin but to understand

the full extent of why this is the case

we got to go back we have to go back all

the way to 2021 because the reason this

is happening doesn't actually lie in the

liquid markets it lies in the private

markets so back in 2021 you can see that

the crypto Market was in a frenzy this

is the stable coin index which is

indicative of new capital coming into

the crypto Market New Capital was

flooding into the market people were in

absolute degeneracy mode and in fact so

far this cycle we haven't even come

close to the amount of liquidity that

was there in 2021 it was absolutely

insane as a result of this increased

sentiment increased risk appetite that

created New Opportunities both in the

liquid market and the private market and

of course the private Market aka the VCS

and the inside that are funding a lot of

these projects saw a massive uptick we

can see that the highest amount of

funding happened during the last bull

run where VCS were pouring unprecedented

amounts of capital into the crypto space

you have to remember Founders so people

that are starting projects and teams and

VCS are just like retail they're

opportunists the upti in investment is a

natural capitalistic response to market

conditions which were clearly very

bullish now what happened in terms of

the VC Market we saw a peak in the

amount of VC deal count and VC total

dollar investment in q1

2022 the crypto Market peaked in

November 2021 so it's interesting that

there was a slight lag there uh largely

due to the fact that the altcoin market

still looked okay heading into q1 2022

where the VCS invested record amounts

I'm talking 122 billion invested during

this quarter alone into the vc/ private

market and over 1,200 new deals so these

are new projects being born coming onto

the market and getting funded by VCS now

not every project gets funded by VCS but

you know the May ones do the low float

High fdv projects you've seen launched

recently they're all funded by VCS uh in

order to you know be assigned such a

massive valuation because there's huge

development costs attached to that but

what happened after this well VC

investment picked in q1

2022 but if you look at q1 2022 on the

chart this was pretty much the beginning

of the end for crypto there was one last

relief bounce before it was down only

and crypto traded in this sideways bare

Market Crab

Crazy price action range for 500 days if

you are a project founder and you raise

Capital here and VC's invest in your

project here or here or here as we can

see lining up with the VC investment

chart here are you going to launch while

the market is bleeding and bearish and

scared no so what are you going to do

you're going to delay your project let's

say you raised at the top here you're

going to delay until here you don't want

to launch because the Market's still

bearish you're going to delay it until

here you don't want to launch cuz the

Market's bearish you're going to delay

and delay and delay because no one

wanted to launch during FTX or luna or

Voyager or Celsius or the slew of other

negative headlines in the market the

first time that the market started to

give you conditions even applicable to

launching a new token in the market due

to the sheer lack of liquidity prior to

that was here in November

2023 this was the first time that the

altcoin index broke out of its range

that it was in for 500 Days this was the

first moment where projects could even

consider launching a project and

remember a lot of these projects were

funded in the last Bull Run they take

years to develop but obviously even if

they were developed they don't want to

launch in crappy market conditions so

let's say you're a project founder slvc

and you decide in November once the

market is starting to look better that

you want to launch how long does it take

to line up a launch well it takes

roughly 3 months 3 to four months

because you have to line up the exchange

listings you might do a last minute

investment round and and then often

times there are delays close to launch

where you might get pushed back 2 to 3

weeks due to other listings the market

might be bearish on the week you want a

list and you might push it back a week

Etc so it's around 3 to 4 months from

the decision time of okay we're going to

finally list our token to the time of

listing so 3 months from November let's

do the math December January

February look at this the time when most

of the new altcoins were launching in

the market was February and March in

this period here pretty much the top of

the market why because it was basically

unfathomable for projects that erased in

2022 or even 2023 to launch during these

bearish market conditions they had to

wait until 2024 to decide to launch many

projects are only launching now because

it took them 6 months to line up their

launches 3 to 4 months is the average

time it takes many projects took 6

months plus what does this mean it means

that you have a record amount of new

tokens coming onto the market as you can

see in front of you we've had over 1

million new crypto tokens launching

since April

alone half of which are on the salana

network but the graph in front of you

isn't the graph is in front of you is

just evm which discounts a lot of the

mem coin frenzy that's been happening on

salana that is its own ball game today's

argument that are making is structured

around the VC and private Market it's

not talking about the meme coins which

of course have created their own sub

sector of dilution in the market so

we've had a record amount of tokens

launching in

2024 as VCS that were waiting and

waiting and waiting and Founders that

were waiting and waiting and waiting

finally decided to launch their tokens

not only that but you have opportunists

that realized the market is now starting

to look better let's launch a token

let's start a crypto project so many new

projects that weren't even planned in

2023

were basically born out of the woodwork

in 2024 as an opportunity to extract

Capital whether this is a meme coin

which is a low effort thing that you can

launch in pretty much a day or a

slightly higher effort thing where you

know you hire a few devs you build a

product for a couple months and then you

know you you get some VC backing and

then you launch a product which is also

a very common model and this isn't

something anyone would consider in 2023

why would you start a new project in a

bare Market there's no liquidity there's

no interest you're not going to perform

well but the irony is because everyone

assumes a token launch is going to

perform well in a bull market everyone

launches but by everyone launching by

the number of crypto tokens

exponentially increasing in the market

you're actually counteracting the

bullish market conditions because you

have this additional Supply coming onto

the market and although there is more

liquidity than there was in a bare

Market that liquidity still isn't strong

enough relative to 2021 to handle the

amount of new launchers but but it gets

even crazy I because if you look at 2021

there was only 443,000 official

launchers that were registered on coin

gecko in 20124 there's 2.5 million

tokens and almost half of those tokens

were created between 2023 and 2024 and

because we know 2023 was not that

bullish most of these tokens launched in

2024 so you've basically doubled the

token Supply not including these meme

coins cuz coino won't list a lot of

these Dex tools salana memes you pretty

pretty much doubled the token Supply in

a matter of 6 months because people saw

oh crypto's pumping this is my

opportunity to finally make money in a

space that's been dead for two years and

then you get this crazy dilution

meanwhile you have the stable coin index

barely

moving the inflows into the market over

the three over the last three months

have been negligible they've been very

strong in terms of the Bitcoin ETF and

it's been a Bitcoin Le cycle so far but

it hasn't been so strong in terms of the

Al coin market so even though yes

liquidity did increase slightly due to

the Bitcoin ETF you had double the

amount of Supply to completely

counteract that new liquidity coming in

and you also have unlocks from the

previous tokens that launched in 2021

2022 and 2023 stacking on top of each

other if you look at token unlocks you

can see here you've got significant

unlocks for salana worldcoin avac a lot

of the new coins as well are now

starting to dilute SOI app TOS

dydx token unlocks compound the more

tokens that launch in the market the

more aggregate cell pressure you have so

your cell pressure per day might be 10

million but every year it's stacking

it's growing to 20 30 4050 and then in 3

years time you have $200 million of

linear unlocks per day because these

projects are assigning like three to

four your investing schedule so you have

a combination of a bunch of new

launchers a bunch of unlocks stacking on

top of each other which equals sell

pressure combined with not a lot of

liquidity coming into the market and

then you look at coin Gecko and you

wonder why and I'm just going to go into

the Maes now a lot of the Mages aren't

performing now a few are we're going to

get into the ones that are um later in

today's video but you know you look at

xrp not really performing you look at

canana not really performing aac's not

really performing shib not really

performing most of these aren't like

most of the majors aren't really moving

they will move they'll have periods of

moving but overall they're struggling to

match it with Bitcoin only eight coins

that were around in

2022 have actually outperformed Bitcoin

since FTX only eight and there are

millions of tokens in the market as I

just showed you before now of course

granted in 2021 and 2022 only a million

of these were created not 2.5 like we

have

now so there are outliers that have

recently launch like whiff and pepe

which have outperformed Bitcoin but the

vast majority of the market hasn't and

that is due to the point that I just

made and you have to think of token

dilution in the market as inflation so

if the government prints US dollars for

example what this does is it reduces the

US Dollar's purchasing power relative to

goods and services so now gas is more

expensive now food is more expensive now

housing is more expensive and this is

what we've seen over the economy over

well really since 1970 but especially

over the last 5 to 10 years it's the

exact same in crypto if you print more

tokens this in turn reduces crypto's

aggregate purchasing power relative to

the US dollar so altcoin dispersion is

basically crypto's version of

inflation token unlocks new

launches a crypto's version of inflation

and this inflation is

counteracting the

demand the new liquidity coming into the

market that is a measure of demand the

amount of Supply is counteracting demand

and basic economics 101 states that you

are going to see a recalibration in

prices to the downside overall if that

is the case now total 3 is up altcoins

have ran they just haven't ran as much

as Bitcoin and many alts haven't even

outperformed total 3 because total 3 is

a measure of the entire altcoin index uh

outside of Bitcoin and ethereum

whereas many coins within this basket

have actually underperformed the overall

index because the index accounts for

some inflation I think it's the top 125

not all inflation from the lower and

midcaps but at least some inflation so

firstly how could things turn around

because I'm not just making a bearish

video for the sake of making a bearish

video I have a point here I want to get

to um which is really going to help you

uh it's not all doom and gloom I just

really want you to understand the

Dynamics of the market so you can be a

better investor I don't see many other

creators you know being real with you um

telling you the real issues they're

talking about altcoins this buy this buy

that do they really understand did their

audiences really understand the Dynamics

of the

market that is what I want you to

understand I want my audience to be

really clued in with how private markets

work how public markets work and let's

just be transparent with each other um

so we can actually freaking smash at

this cycle and that's the only way we're

going to do it so how could things turn

around I did a tweet on this um I really

think we need more liquid funds in

crypto there are comparatively too many

VCS in the market and what this does is

it creates a skew between the private

market and the public market basically

meaning VCS are able to buy in and not

just VCS but insiders projects whoever's

investing even I invest in seed rounds

right you get it at a much lower price

and then it launches at a much higher

price and Retail Buys in at the higher

price but then the early investors

they're up significantly so they take

profits so they're selling into retail

who's buying and this is how the markets

worked for years years and years and

it's also how the stock market works

right difference between the crypto

market and the stock market is the stock

market has a passive bid from ETF manage

funds and liquid funds which crypto

doesn't have stock market has Pension

funds stock market has liquid Traders

there's not as much private to Public

Market Arbitrage in the crypto Market

because there's such a divide between

private investment and public

investment it really incentivizes you to

become a private market player versus a

public market player that's a real

problem in the market right and one of

the ways crypto turns around and this

altcoin situation of too many new

launchers turns around is that skew

shifting more to public now there has

been a big development over the past few

weeks in my opinion that indicates that

this is starting to play out that this

is now potentially the new meta in the

market um and it leads me to believe

that the days of these easy VC wins

actually may be over and this meta may

be SHO and I'll show you why for many

new

tokens buying in the public market has

actually been better and this is really

exclusive to the last six months cuz in

last ball run it was very skewed towards

private and at the start of the year it

was as well but over the past couple of

months I think retail is starting to

realize The Jig Is up a little bit they

don't want to buy into these coins and

they're not really bidding these coins

and they're losing faith in these coins

and the airdrop execution is bad so

they're not feeling a part of the

community of these coins cuz you can see

Zero a zero raised at three bill in

series B their current valuation is 3.7

Bill and they have a16z and a bunch of

other massive backers who actually

invested at a $3 billion Val and they're

locked for four years but the current

Val on the market is basically what they

bought in for so you could put $1,000

right now into layer zero for example

and you will have a liquid th you can

sell that whenever you want you can

trade it do whatever you want with it if

a16z puts $1,000 into layer zero at the

same valuation which pretty much they

did they're locked for 4 years so their

tokens are going to be vesting over 4

years whilst you have a liquid

opportunity so from an opportunity cost

perspective you win you have a much

better deal than the VCS right so right

now the liquid market for a lot of these

new launches is actually more attractive

and I get offered a lot of seed rounds

as well and I've been rejecting pretty

much 90% of them recently because

honestly if I believe in the project I

would rather buy on the open market

after it launches cuz then I'm not

locked for potentially months or years

and I'm able to trade liquid at a pretty

much a better price a risk adjusted

price because because even if you're

getting a slightly better price in

private markets if the public market

premium means that you have liquidity

versus waiting for 12 months it's

actually worth just paying the slight

premium we can see Wormhole as well

raised at 2.5 its current value is 3.6

ZK sync raised at 1.25 this is slightly

better but still not great for Bill a 3X

if you're locked for 4 years it's pretty

terrible you could have invested in

Bitcoin in 2022 when they did the raise

and hit a 3X that way and you've got a

liquid investment and then polyedra zkj

raised at one bill the carrent vals one

bill in fact this will dip below in my

opinion and probably just based on the

price action and that will mean that

these VCS are actually down and locked

so the days of the easy VC wins are over

which in my opinion is good for the

market what does this reflect I think it

reflects the market shifting retail is

realizing they don't want to play this

game anymore and that's why they've

started to favor the meme

coins projects have been much too

aggressive raising at far too high

valuations and I believe what this is

going to do is it's going to shift the

market and force these projects to

launch at lower valuations giving people

the ability to buy in at lower prices

like salana at 100 200 million last

cycle like pretty much like ethereum

when it first launched I know that was

an Ico slightly different but still like

you had the opportunity to get into

these coins early at sub billion dollar

market caps whereas now a lot of the

tokens launching they're instantly

getting assigned to four 5 10 even 20

billion the case of stock net valuation

and that's not fair because there's no

price Discovery happening in the public

market it's already happened in the

private Market from the VCS so nature is

healing in this respect I do think the

market is starting to shift but this was

the point I highlighted in my thread

that we need more liquid funds and there

are too many VCS how do you get more

liquid funds well it's all based on

incentive if people feel like they have

more of an edge in the liquid market

then not going to skew so much of their

time and attention towards the private

market now you need the private Market

by the way I'm not shooting on VCS

private Market is so important because

you need funding to create great daps

you need funding to innovate you need

funding to create products right you

need VCS to steer the direction of these

products um but when it becomes too

exploitative consistently overtime

overtime over time retail gets jaded and

it starts to have an impact on on

liquidity in the market given the amount

of Supply coming on to the market and

and the stats are in front of us portal

down 80% since launch starnet down 64

Omni 50 Saga 80 Marvia 40 alt 45 Ena

slightly better but still 20 ZK syn

already 15 layer zero already 28 zkj

polyhedra 65% Wormhole 73% and that's

because they're low float High fdv

tokens that are launching at valuations

that are frankly way too high the

Market's realizing this there's no

demand or appetite to bid at those

levels price is discoveries already

occurred and then it's down only and

then you can't Community build right

because the chart looks bad that the

sentiment bad and it takes like you

pretty much starting the race 100 meters

behind if a project in terms of

community building is having to catch up

from a crappy launch much better if you

just have a good launch on board the

community have a really rock solid base

and then build on top of that so that

leads me on to a point I want to make

here what kind of coin should you be

looking for instead and what should

Project's value in the market to get out

of this low float High fdv down only

Paradigm that we've been seeing well

firstly products you invest in should

have a clear narrative a clear clear

narrative look for leaders of their

respective sectors in strong Trends

whether that be rwa whether that be AI

whether that be gaming whatever it is

make sure they have a clear narrative

secondly they need to have a clear

differentiator are they the 10th Layer

Two launching in the market this month

or do they a clear differentiator USP is

their Tech that much better that it will

incentivize devs and users to use that

product over other products are they

offering something that has never been

done before or are they massively

improving upon an existing crypto

product and is their demand for that use

case if that is the case you're in a

much better position than just launching

copycat infr blockchains like we've been

seeing over the past few months and

that's another reason why dilution has

been so heavy-handed because a lot of

these projects are carbon copies of each

other they're all zk2 they're all l1s

they're all dexs like they're all the

same type of products with no real

Innovation and by the way the

underperformance of these launches

actually causes Innovation because it

signals that the Market's not going to

put up with no innovation the market

needs to innovate and this is how

efficient markets end up developing

crypto is an inefficient Market but it

becomes more efficient over time um and

this is capitalism at the end of the day

like liquidity and financial demand is

going to drive what is created which I

actually love because that is how Market

should work three clever tokenomics must

be part of the equation here clever

tokenomics in terms of are you providing

additional utility to just being a

governance token and do you have things

like BuyBacks and burns are you

implementing measures where like staking

is really enticing for retail which

means you're going to have the

circulating Supply reduced that kind of

stuff can help price appreciation and

price appreciation is good for Point

number four which is community building

there's no better Endeavor in the market

than the price Rising for building

Community communities are driven by

price because people are driven by money

and strong communities are built off

price appreciation of tokens so you need

to have the first three points in check

if you want to have number four but

number four can also be done through

things like valuing Community listening

to community being funny embracing

crypto culture being memeable not being

too corporate and if you have a really

clear narrative in USP you might just

get the community anyway

and point number five and this is a very

important point to make for the Traders

and investors out there is low inflation

so ideally you have a token with

relatively low inflation either that

means you launch with a lot of the token

circulating

or the time you take the trade to the

time you exit the trade so the time

Horizon window of a trading opportunity

there's low token inflation during that

window let me use Ono as an example Ono

is extremely low float

a lot of tokens are going to be

unlocking in 2025 and Beyond however if

your trading window for Ono is the next

five

months because the circulating Supply is

so low and because there's barely any

inflation that is likely to be a

profitable trade and it has been like

that's pretty much why it's been pumping

really low circulating Supply and no

supply pressure conversely a lot of

these new tokens that have been

launching they have a lot of supply

pressure they have the initial aird drop

so they dump and then you know you have

the private R unlocks so they dump and

then the VC unlocks begin and they dump

VC unlocks aren't the only type of

unlocks which affect the market there

are also like advisory rounds other

sorts of private rounds there are other

um measures as well like aird drops Etc

which also increase the supply and I

actually think a lot of projects are

going to like copy this Ono model going

forward of maybe not even doing an air

drop and just withholding that Supply um

only so long though you can you kick the

can down the road because eventually

you're going to have to release Supply

unless you release it up front so this

the Ono strategy and the Celestia

strategy that they pulled as well it

works really well for short-term price

action but probably not great for

long-term Community Building um due to

the Future dilution that you get so when

you are trading tokens make sure you're

buying into tokens with a clear

narrative clear USP clever tokenomics

strong community and low inflation or at

least low inflation during the trade

window now what I'm going to be doing in

the Mars high club is in a few days time

corresponding with when the next month

ticks over on the 20 6 of June is

posting my top 10 lwi inflation altcoin

picks so these are altcoins which are

pretty much fully diluted in the market

because I do think there is going to be

a meta now where people don't want to go

for the tokens with crazy unlocks and

they want to go for the tokens that

aren't diluting a crazy amount of Supply

but remember due to the total aggregate

supply in the market continuously

increasing you must have the first three

in order to offset some of this supply

pressure and those are the tokens I'll

be focusing on in this report that I'll

be posting in the MS high club if you do

want to sign up for the M high club

there is a link in the description below

the first 100 people to join the wait

list will get access to the group this

may be the last day considering it is

only limited to the first 100 spots and

last time I checked they were going

super quick that you can join and then

after this we're going to shut it for

another month so you won't be hearing

about it again for another month but all

the people in the community will be

getting access to all the amazing Alpha

that we have in here and to everyone

that is already in the community thank

you so much for being a part of it it's

been absolutely amazing to grow with you

to provide value back to you and we're

only going to get better and better with

the new idos giveaways uh and

initiatives that I can't talk about

quite yet launching over the next month

and I just want to summarize that this

isn't a video that should make you

bearish it just

raises your attention to the current

dynamics of the market and highlights

the types of coins that you need to be

focusing on I think that is a super

important takeaway today that yes the

Met is slightly shifting but there is a

strong reason for the under performance

of altcoins and that is also the reason

why sentiment is bad and why retail

isn't coming back into the market as

strongly as it did in 2021 and it kind

of goes to explain the current

predicament that we're in um and also

holds the key to actually coming out of

that predicament and hopefully some of

these points can help you when you are

looking at altcoins to be a little bit

more selective about uh especially when

it comes to the tokenomics and economic

side of things because I think a lot of

people invest in coins purely based on

narrative but you also need Point number

three and point number five ticked off

if that is to be a good investment

especially if we're talking about longer

time frames obviously short-term

investing it doesn't matter so much over

a six-month period it can matter a lot

and it can be the difference between you

failing and succeeding this cycle I'm

going to see you in the next video hope

you have a lovely rest of your day peace

out