An American hedge fund and investment firm that specializes in digital assets says the current crypto bull market is unlike the bull run from three years ago.
In a new blog post, Pantera Capital liquid strategies portfolio manager Cosmo Jiang and head of content Erik Lowe say that 2021’s bull run was in part driven by “speculative froth.”
“This rally is remarkably different from the previous one.
The 2021 peak saw a massive churn in the top tokens. Fourteen of the top-20 tokens at the peak of the 2017 ICO (initial coin offering)-lead boom dropped out of the top-20 soon after. They fell a long way. Thirteen of those fallen tokens now average #123 – by market capitalization. (Tron is the only project that dropped out of the top 20 and returned.) In hindsight, one can say that was speculative froth and hype on unproductive tokens.”
According to Pantera, the top coins in this year’s bull cycle have a constancy that makes this bull run distinct from 2021’s run.
“The fourteen tokens that fell out of the 2017 top-20 were all replaced by tokens that didn’t even exist at the time of the prior peak. That’s wild. Pure creative destruction.
What’s been interesting about this rally is how little change there has been. It’s the polar opposite of the previous cycle.
This time all of the top six – which account for 83% of market capitalization – are the same. Eight of the top 10 are the same. Fourteen tokens stayed in the top 20.”
The digital assets hedge fund points out that there has been only one stronghold throughout the market cycles, the dominance of Bitcoin (BTC).
“Over all those cycles, Bitcoin is the constant… In the twelve years since Litecoin launched, only four tokens have held the #2 position: Litecoin, XRP/Ripple, Ethereum, and Bitcoin Cash. Bitcoin Cash only held it for one day! Bitcoin has always held the title belt.”
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