Crypto analyst Willy Woo has recently shared his insights on the current state of the altcoin market. Woo noted that he has not discussed altcoins for several years and believes that the present cycle is significantly different from previous ones. He pointed out that this marks the third cycle since 2017, when altcoins first entered the mainstream, during which retail investors have sustained notable losses.
The 2020-21 period was characterized by innovations in decentralized finance (DeFi) and non-fungible tokens (NFTs), which led to further losses for retail investors. Presently, the altcoin market appears to be dominated by meme coins, which are seen not as world-changing technologies but more as an honest bubble casino.
Woo suggests that retail investors might have gleaned valuable lessons after three cycles of losses. Although the dominance of altcoins has yet to revert to a long-term equilibrium, the future balance remains uncertain. Woo also mentioned that there could still be altcoin seasons, particularly as investors pursue larger returns on the risk curve following a surge in Bitcoin (BTC).
This behavior mirrors standard market trends, akin to those observed in the stock market. However, he pointed out that since the altcoin bubble of 2017, the strength of each subsequent cycle's altcoin season has been progressively weaker. Woo emphasized that the market capitalization of altcoins merely reflects the accumulated victories of new winners, while excluding those who have faced losses.
He cautioned that while trading altcoins is feasible, no one should hold them unless they possess a comprehensive understanding of the intricate internal dynamics at play, as engaging with altcoins is reminiscent of a casino where ultimately, the house tends to win..