Altcoins, or alternative cryptocurrencies, have experienced a significant decline in value after reaching their peak in the first quarter of 2024. Many projects have seen a decline of 70% to 90% from their highest levels in March. Recent data shows that the total market value of cryptocurrencies, excluding Bitcoin and Ethereum, has now returned to the levels seen in December 2023. This decline has effectively erased all the gains made since the beginning of the year.
Renowned crypto investor Andrew Kang believes that almost all altcoins have reached their peak in the current bull cycle. However, he remains optimistic about memecoin projects, which may defy the broader market’s downward trend. Kang suggests that a few crypto assets, including memecoins, have the potential to create new peaks in the fourth quarter of 2024 and the first quarter of 2025.
In contrast to the declining performance of most altcoins, memecoins have shown remarkable resilience. Memecoin analyst Murad Mahmudov predicts that memecoins will dominate the next altcoin season. This shift in investor sentiment is evident, as individual investors are increasingly turning to memecoin projects while institutional investors primarily focus on Bitcoin and Ethereum.
Data from the crypto analysis platform DYOR reveals that memecoin projects have outperformed other sectors during market volatility in the past 90 days. Memecoins have demonstrated notable resilience, with a relative strength of -0.37, compared to sectors like Web3 gaming and Layer-2 and Layer-3 technologies, which recorded much lower strengths of -1.32 and -1.30 respectively.
Hitesh Malviya, the founder of DYOR, offers a critical perspective on the altcoin ecosystem, particularly those backed by venture capitalists. He argues that despite the initial promises of many VC-backed projects, they often struggle to survive in the long term.
Please note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.
