Bear Market = Altcoin Season? BTC and ETH Losing Ground to Alts
Both stocks and crypto markets have been down in most of 2022 (largely due to inflation, rising interest rates, and talks of an upcoming global recession), but in the last month we've seen a few interesting patterns emerge:
- Proof-of-Storage coins, particularly Chia Coin (XCH) and STORJ (STORJ) have seen very favorable gains.
- The two major crypto coins, Bitcoin and Ethereum, has actually been performing worse than the majority of "altcoins" out there - a sign that crypto investors are reallocating their portfolios towards alts.
- Weekends are usually when crypto investors typically make their move - and we see that coins that offer staking rewards (interest rates start to look more favorable during recessionary periods) have been gaining ground. (XTZ +4.5%, ATOM +4.5%, MATIC +3%)
This is a PSA but beware of newly minted coins' "staking rewards" because a lot of them are based on the idea of certain assets (BTC, ETH, even fiat) always going up. When that inflow dries up, we're going to see a lot of services and platforms go through a LUNA-style collapse - if you don't DYOR carefully here, you may get caught up in the storm. Many coins that currently offer "staking rewards" have cut a lot of corners to keep up with last year's hype and is living on borrowed time.
cobie.substack.com/p/apecoin-and-the-death-of-staking
In theory, Layer-2 coins built on top of the EVM network operate independently of ETH's price, but we don't actually know all the details of what goes on behind the scenes - some of them may collapse just as well if their model has been reliant on speculative gains on ETH itself. (Something that the project teams will never admit to, even if true.) Time will tell whether it turns out this way or not, of if the Merge in August will stabilize or destabilize these economies as a whole. A lot of uncertainty in the big-name coins right now, either way - meanwhile, altcoins have been gradually chipping away at their lead.
- Proof-of-Storage coins, particularly Chia Coin (XCH) and STORJ (STORJ) have seen very favorable gains.
- The two major crypto coins, Bitcoin and Ethereum, has actually been performing worse than the majority of "altcoins" out there - a sign that crypto investors are reallocating their portfolios towards alts.
- Weekends are usually when crypto investors typically make their move - and we see that coins that offer staking rewards (interest rates start to look more favorable during recessionary periods) have been gaining ground. (XTZ +4.5%, ATOM +4.5%, MATIC +3%)
This is a PSA but beware of newly minted coins' "staking rewards" because a lot of them are based on the idea of certain assets (BTC, ETH, even fiat) always going up. When that inflow dries up, we're going to see a lot of services and platforms go through a LUNA-style collapse - if you don't DYOR carefully here, you may get caught up in the storm. Many coins that currently offer "staking rewards" have cut a lot of corners to keep up with last year's hype and is living on borrowed time.
cobie.substack.com/p/apecoin-and-the-death-of-staking
In theory, Layer-2 coins built on top of the EVM network operate independently of ETH's price, but we don't actually know all the details of what goes on behind the scenes - some of them may collapse just as well if their model has been reliant on speculative gains on ETH itself. (Something that the project teams will never admit to, even if true.) Time will tell whether it turns out this way or not, of if the Merge in August will stabilize or destabilize these economies as a whole. A lot of uncertainty in the big-name coins right now, either way - meanwhile, altcoins have been gradually chipping away at their lead.
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