Bitcoin price is currently consolidating around $60,000, with its dominance growing to 57.4%. This strong dominance has pushed back the start of an altcoin season. However, according to Glassnode lead analyst James Check, one key reason for this delay is the impact of memecoins, which he describes as the “silent killer” of the altcoin season.
Meme Coins: Silent Killer of Altcoin Season
In a recent Rough Consensus podcast, Glassnode lead crypto analyst James Check discussed why the altcoin season is been delaying. He pointed out that traders are rushing into popular meme coins like Dogecoin, Shib Inu, and PePe, which are attracting a lot of money.
Meanwhile, this trend is taking funds away from traditional altcoins like, Ethereum, Solana, and XRP. Moreover, for every dollar that goes into meme coins, about 50 to 60 cents could have gone to these well-known cryptocurrencies.
Since there is only a limited amount of investment money, moving too much into memecoins means there is less available for altcoins.
Trader Running Towards Memecoin
In the 2021 bull run, memecoins usually gained popularity towards the end of the crypto market rally. This time, however, they are gaining traction much earlier. Check noted that traders, eager to capitalize on the hype are quickly jumping into popular meme coins and often skipping more stable investments.
For example, the recent surging popularity of PEPE has led to massive gains in the first half of 2024. As per Lookonchain, some traders made enormous profits, with one savvy investor turning a $3,000 investment into $46 million.
Despite these huge gains, Check noted that there was a time when investment in other assets was minimal, creating a gap in the market.
What Next For Altcoin
Some experts believe that the current low prices of altcoins and lower trading volumes could signal a future rise. Once the excitement around memecoins fades, there could be a significant shift back to altcoins, allowing them to catch up and potentially outperform.
