The #1 Reason Why Altcoins Are F*cked This Cycle [The Honest Truth]
Summary
TLDRThis 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
📉 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.
📈 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.
💡 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.
🚀 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.
📊 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.
🤔 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.
🛠 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.
🌐 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.
Mindmap
Keywords
💡Altcoins
💡Underperforming
💡Liquidity
💡Token Unlocks
💡Inflation
💡VC Investment
💡Private Markets
💡Public Market
💡Tokenomics
💡Community Building
💡Low Inflation
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
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