Why Altcoins Are Taking a Backseat This Year

Bitcoin Hits New High Near $126,000

Bitcoin has been on a roll, hitting a new high near $126,000 in early October. But guess who's not joining the party? Altcoins. They're still playing catch-up, stuck below their 2021 peak of around $1.6 trillion. This is a big deal because, in the past, altcoins usually hit new highs right after Bitcoin. Not this time, though.

What's Going On?

A few factors are at play:

1. ETF Inflows: A lot of money is flowing into Bitcoin through ETFs. This is good for Bitcoin but not so much for altcoins.
2. Uncertainty: There's some uncertainty around U.S. trade policies and what the Federal Reserve might do next. This is making investors nervous, and they're not taking big risks on altcoins.
3. Dollar Funding Squeeze: There's a squeeze on dollar funding, making it harder for people to invest in riskier assets like altcoins.

What's Next?

There are a few scenarios:

• Bitcoin has already hit its peak, and we're seeing a pullback.
• Bitcoin could go higher, maybe up to $155,000, before it starts to fall.
• We're in a waiting game, with Bitcoin trading between $100,000 and $125,000 for a while.

Altcoins: Waiting for Their Moment

Altcoins are still waiting for their moment. In the past, they usually took off after Bitcoin. But this time, they're not getting the same love. This could be because all the ETF money is going into Bitcoin, or it could be because of the uncertain macro environment. Either way, until altcoins break their 2021 high, they're not really in the game.

Stablecoins: A Mixed Signal

If you include stablecoins in the mix, the total market cap did break its 2021 high. But this isn't necessarily a good sign for altcoins. In fact, a lot of stablecoins just sitting there can mean people are moving out of riskier assets, not into them.

The Takeaway

It's a bit of a waiting game. Bitcoin is doing its thing, but altcoins are still on the sidelines. Until we see some clear signs of a change, it's hard to say what's next. But one thing's for sure: it's not your typical altcoin season.