Will there still be a copycat season in 2024? What investment opportunities are there now?

In this round of bull market, the long-awaited “altcoin season” seems to have started to move recently. From APE to DYDX and SUSHI, many altcoins have seen a sharp rise. Is this really a bull market or are the altcoins taking the opportunity to release the good news and then sell the products? The “altcoin season” rule that was once inevitable in the crypto market, why doesn’t it work this year?

How did the previous copycat seasons come about?

In the past few rounds of bull markets, the arrival of the altcoin season seems to be an inevitable phenomenon. When the prices of Bitcoin and Ethereum rise, investors will make enough profits in mainstream currencies, and funds will gradually overflow into the altcoin market, which is more volatile but may bring higher returns. Therefore, altcoins began to rise in turn driven by this type of funds, forming a unique "altcoin season" market.

However, in 2024, this rule seems to have failed. Through the halving event and the catalysis of ETFs, the price of Bitcoin has soared from 26,000 to a high of 70,000 US dollars, and mainstream funds have reaped a lot of benefits. According to common sense, this should be the time for altcoins to show their strength, but the reality is disappointing. Many investors who ambushed in advance and expected to repeat the historical market were deeply trapped and suffered heavy losses. There are very few altcoins that have outperformed Bitcoin this year, and choosing the right altcoin is like finding a needle in a haystack.

Why is the 2024 copycat season absent?

In the past, the Shanzhai season was a "natural phenomenon", but why was it absent this year? This is the result of multiple factors.

The first is the lack of new narratives. Behind every bull market, there is a strong narrative drive. For example, 2017 was the first coin offering boom, and 2021 was supported by emerging concepts such as DeFi, NFT, and GameFi. This year, there are many new projects in the cryptocurrency circle, but they are basically new wine in old bottles and reinventing the wheel. There is a lack of new narratives that are attractive enough to attract funds and drive big market trends.

Secondly, token dilution. In this round, a large number of high-market-cap, low-circulation tokens were launched. Data shows that the average circulation rate of these projects is only 14%, and there are about 90 billion US dollars of tokens waiting to be unlocked. When the oversaturation of projects is combined with the oversupply of tokens, the altcoin season is difficult to sustain.

Another important factor is that the emergence of Bitcoin spot ETFs has changed the flow of funds. Previously, investors mostly accessed Bitcoin through centralized exchanges (CEX), and these investors often tried altcoins, driving the prosperity of the altcoin market. However, the approval of ETFs attracted a large amount of institutional funds, which were only interested in Bitcoin. This structural change in institutional funds weakened the market demand for altcoins and broke the traditional law of capital flow.

In addition, macroeconomic uncertainty has exacerbated the conservative sentiment in the market. The global economic outlook is worrying, and investors are more cautious in this environment. Altcoins are particularly weak in this risk-averse atmosphere due to their greater volatility and higher risks.

What’s the next step?

The direction of the crypto market is full of uncertainty. If the interest rate cut policy stabilizes the economy, investors' risk appetite may rebound, Bitcoin's market dominance may be challenged, and funds may flow more freely to other high-quality assets, including some potential altcoins. However, if recession concerns continue to intensify, Bitcoin's position as a safe-haven asset will be further consolidated, and its market dominance will remain high.

But in either case, one indisputable fact is that the differentiation between altcoins will become increasingly intense. High-quality projects will stand out with their unique technical advantages, application scenarios and market potential, while low-quality projects may struggle and be gradually eliminated by the market.

In the face of such a complex and ever-changing market environment, blind operations will undoubtedly greatly increase investment risks. For ordinary investors, there is no need to limit themselves to opportunities in altcoins. They may consider turning their attention to more stable products and looking for certainty in uncertainty. For example, 4E Financial Management provides financial products with an annualized yield of up to 5.5% on USDT. With the combination of current and regular deposits, funds are not idle, and they can wait for market changes and invest flexibly.

Of course, diversified asset allocation can help to resist the volatility risk of a single market, and you can also focus on investment opportunities in other areas during this garbage time. For example, 4E also supports asset categories such as stocks, indices, foreign exchange, gold, etc. in traditional financial markets, and U-standard one-stop trading provides more stable growth opportunities.

In short, whether the altcoin season will come in 2024 is still unknown. In the context of the continuous evolution of the crypto market, market rules are no longer as reliable as in the past. Faced with a complex and changing market, investors should remain cautious, reasonably diversify risks, and not rely solely on past experience, but look for steady growth opportunities in diversified investments.