Altcoins a ‘Major’ Risk as Big Returns Vanish, Analysts Warn

Altcoins offer “tactical opportunities,” but Markus Thielen of 10xResearch notes that huge returns seen in previous cycles haven’t materialized.

According to crypto researchers, the idea of altcoins that offer high risk and high reward may be shifting in favor of the former since significant gains are now less possible due to the narratives that drive the market.

“The era of 100x returns may well be behind us, even though there are tactical opportunities,” according to Markus Thielen, head of research at 10xResearch.

Even though the market was expecting a bull market in cryptocurrencies this year, he issued a warning because “retail participation remains subdued, and few new projects have emerged that captivate non-crypto-native traders.”

According to Thielen, previous cryptocurrency bull markets attracted more capital due to their “distinct characteristics.” Still, this cycle has seen “tighter capital, evidenced by low total value locked and a dearth of venture capital investments.”

The story that cryptocurrency might replace established financial systems was generally accepted in the last cycle. Still, Thielen states that this cycle’s narratives are more flimsy and need more evidence to support them.

GameStop (GME), a memecoin headquartered in Solana that has nothing to do with the firm that sells video games, saw a 2,727% increase in value earlier this week when trader Keith Gill uploaded a meme from his “Roaring Kitty” X account for the first time in almost three years.

In an X post from May 16, Michael van de Poppe, the founder of MN Trading Consultancy, asserted that a portfolio primarily on cryptocurrencies carries a “relatively huge” risk.

What’s the downside of this bet? It’s relatively huge. At the moment of posting, I’m down around 20% already in a matter of 1-2 weeks on the overall investment.

Despite the risk, Van de Poppe revealed that he recently sold his Bitcoin. BTC$65,566 to switch to alternative currencies, stating he “can lose 50–80%.”Fabio Andreatta, a cryptocurrency investor, is dubious that there will even “be an alt season.”

In response to van de Poppe’s X post, Andreatta stated, “All you did is increase your risk.” It is doubtful that you will surpass Bitcoin. The majority of altcoins will never again hit their ATHs.

The dominance of Bitcoin and its market share compared to other cryptocurrencies indicate that the market as a whole has moved money away from altcoins.

According to TradingView data, bitcoin dominance is getting close to reaching an all-time high for the year; it is presently at 56.05%, up 2.12% over the last seven days.