By CCN:If you’re on the edge of your seat for the “crazy altcoin pumps” that the market experienced in the 2017 bull run, you might be waiting a long time. Michael Novogratz, who is at the helm of crypto merchant bank Galaxy Digital, suggests that bitcoin will leave its smaller peers in the dust.
Ran NeuNer, the host of CNBC’s “Crypto Trader,” got the conversation started on Twitter when he observed:
“The market is running but we still haven’t seen the crazy alt pumps, pumps where coins do 40% in a day…is it coming?”
That’s when Novogratz burst the bubble, so to speak, responding that things have changed since the last bull run.
“Not this time. Market getting smarter. BTC will outperform.”
Not this time. Market getting smarter. $btc will outperform.
— Michael Novogratz (@novogratz) May 19, 2019
Bitcoin’s dominance is currently hovering at 56.7%. On this date in 2017, bitcoin’s dominance was nearly 10 percentage points lower at 47%.
As Novogratz suggested, the crypto market has matured since the last time the bulls were in control. Regulators have clamped down on ICO deals, not to mention that the freefall in altcoin prices throughout crypto winter was more severe than that of bitcoin, with some coins losing all of their value.
Scams such as BitConnect have been weeded out of the market. That coin saw its worth plummet from as high as $400 to just pennies before collapsing entirely. Certain crypto exchanges have also been exposed for faking trading statistics.
Meanwhile, big investors have more options now that ever considering there are regulated custody and trading platforms from the likes of bitcoin-focused Fidelity and Bakkt that are adding a great deal of heft to the market. Not to mention the fact that tech giant Microsoft is building on the Bitcoin blockchain. The bull case for bitcoin is undeniable. Still, altcoins are near and dear to the hearts of many crypto investors.
One thing that never ceases to amaze me is how strong the general trust in altcoins is.
I doubt there is any other market that can go down 95% and still maintain as many believers.
We’re all either the biggest geniuses or the biggest idiots out there.
I honestly can’t tell.
— DonAlt (@CryptoDonAlt) May 18, 2019
Crypto trader “DonAlt” on Twitter said he currently has zero exposure to alts. He provided the following altcoin analysis. He believes that the “dollar value of [ETH, XRP, BCH, LTC, ADA, XMR, XTZ] to be significantly higher in three-to-six months” amid what he describes as “clout chasing.”
Frontrunning all the clout chasing in the near future.
I expect the $ value of the below-mentioned assets to be significantly higher in 3 to 6- months.
— DonAlt (@CryptoDonAlt) May 19, 2019
At least it’s a far cry from these days –
a lot of unsuspecting noobs are pumping fiat into alt coins…classic pump and dump schemes. Shit is going to end badly.
— Vinny Lingham (@VinnyLingham) March 13, 2017
Smart Money, Dumb Money
Esteemed trader Peter Brandt seems to suggest that the more things change in crypto, the more they stay the same. He told NeuNer in an interview broadcast during Blockchain Week:
“[Bitcoin is] going to make dumb money chase it. No matter what, it’s going to make dumb money chase it…Smart money will buy significant corrections in this market of $500 to $1,000 and dumb money will chase it.”
Bitcoin’s Volatility Will Subside as Mainstream Adoption Materializes. Will Altcoins Follow?
In a recent Galaxy Digital Research Note, Novogratz’s firm explained how the volatility surrounding the bitcoin price is destined to be mitigated, saying:
“Therefore, as bitcoin adoption increases (and bitcoin market cap increases given its fixed, known supply), each incremental adopter will by definition have a decreasing impact on the price of bitcoin, leading to a dampening of volatility in the long run. So, while bitcoin’s volatility is natural and quite expected during its early stage of global adoption, this volatility should not be confused with its expected volatility at mature adoption, whereas its properties make it very much a fundamentally good store of value.”
Considering that altcoin performance is correlated with the bitcoin price, perhaps that will lead to less volatility in some altcoins as well.