Why Bitcoin, Ethereum may not be the best plays for the next bull market
Since the launch of bitcoin, there have been huge gains recorded by those who got in early and held on long enough. The same was the case with Ethereum, whose market cap grew to hundreds of billions. However, the growth that these digital assets have already seen over the years has put a damper on how much they can still grow in the coming years. This is why investors look elsewhere for bigger gains.
Bitcoin, Ethereum gains are lower
During the last bull market, it became clear that bitcoin and Ethereum will no longer be able to provide the kind of returns that early investors had received. During the previous cycle low, bitcoin had fallen as low as $6,000, but had reached $69,000 at the peak. This was a 10-fold growth for the digital resource.
The case was similar to Ethereum, the second largest cryptocurrency by market capitalization, although it had fared much better compared to bitcoin. It had grown from the cycle low of around $100 to a high of $4,800. This was approximately a 500-fold growth for the digital resource.
BTC grows 10x | Source: BTCUSD on TradingView.com
However, their already massive growth has put investors off them, not because they are not good investments, but because their potential to explode exponentially has been greatly reduced. An example is that from bitcoin’s current price, even if it were to reach $100,000 per coin, that would still be less than 10x growth.
The same with Ethereum, although the digital asset has more potential for greater growth compared to bitcoin due to it being much younger. If ETH were to grow to $10,000 per token, it would barely be a 10x growth.
Altcoins Take The Cake
Altcoins had been ahead of market leaders like bitcoin and Ethereum when it came to gains in the recent bull market. Where these major digital assets managed below 500x, smaller altcoins like Dogecoin and Shiba Inu had recorded ROIs in the thousands.
Mainly, meme coins were notorious for such returns, but altcoins from other spheres had also seen the same kind of growth. FTM is a token that had traded as low as $0.2 and peaked above $3.4 during the bull market. DOGE’s price had made an impressive run from $0.004 to $0.7 at the height of the rally.
However, this is just a small example of the many ways in which altcoins have been good investments during the bull market. With the next bull market expected to occur in 2024, it is no surprise when investors turn to smaller cap tokens in hopes of catching the next DOGE or SHIB.
Disclaimer: The following op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.
Featured image from Medium, chart from TradingView.com
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