Are Altcoins Dead? [Truth: Most Are.]

The altcoin market, excluding Bitcoin and Ethereum, shows significant underperformance and weakness compared to previous cycles, suggesting most altcoins are struggling while a select few present investment opportunities for highly selective investors.

• Most altcoins are significantly underperforming Bitcoin, with many failing to reach prior highs.

• Institutional money is largely avoiding speculative altcoins, contributing to a weak market bid.

• Highly selective investment in altcoins during fearful market conditions can yield substantial returns when greed-driven surges occur.

Most altcoins are struggling and have not reached their 2021 all-time highs, unlike Bitcoin, indicating a lagging and potentially extended cycle. Institutional money is primarily flowing into Bitcoin, not speculative altcoins, leading to a weak bid and a 'circular firing squad' dynamic where various market participants are dumping on each other. Despite current fear, opportunities exist for highly selective altcoin investments, as a few could perform exceptionally well if a retail surge fueled by 'greed' eventually materializes.

Altcoin Market Lag

• 00:00:41 Analysis of the 'total two ES' chart (total market cap minus Bitcoin and stablecoins) reveals that altcoins have not challenged their 2021 all-time highs, unlike Bitcoin, which did so 20 months ago. The 'total three ES' chart (minus Bitcoin, ETH, and stablecoins) shows an even worse situation, not even surpassing its December 2024 local peak and currently resting on its 200-day EMA. This severe lag indicates a struggling altcoin market, particularly for those excluding Ethereum.

Institutional vs. Retail Flow

• 00:04:40 New institutional money is flowing into Bitcoin, not speculative altcoins or 'dog coins,' which are typically bought by retail investors. This absence of institutional bids, coupled with OGs cashing out, contributes to the weak demand for altcoins. The market is characterized by a 'circular firing squad' where VCs dump on retail, exchanges manipulate, and retail investors dump on each other, driven by a constant narrative change and a struggle to recoup losses.

Selective Investment Opportunity

• 00:06:24 While the vast majority of altcoins are headed for failure, a select few are expected to perform exceptionally well, highlighting the need for extreme selectivity. Out of millions, perhaps only a hundred or so altcoins are truly investable for long-term growth, with most others serving merely as short-term flips. Investors must conduct their own research, build confidence in their selections, and be prepared for volatility, especially when market sentiment is low.

Potential for Greed-Driven Surges

• 00:08:19 Despite the current bearish sentiment, the market should not underestimate the power of 'greed,' as a few green candles can quickly flip sentiment and trigger a massive retail surge. Historically, such surges have led to significant pumps, as demonstrated by the 'others' (all altcoins excluding the top 10) ripping 121% in one month in December 2024. This indicates that while the altcoin market is currently weak, a bottom is likely near, and substantial gains are possible for selected coins when demand returns.