Do you hold more alts than BTC?
Do you wonder if there be further "Altseasons"?
For those wondering about their altcoin bags, rest assured there will be a massive altseason. How do I know this? Because when BTC cools off (especially after a big move up), liquidity rotates from BTC into alts (from alpha to beta). This is true of stocks and other assets as well. The phenomenon has proven to hold true in crypto.
Historically, alts move up most for a period of 2-8 weeks after BTC tops. They also climb into this BTC-topping period.
Why don't I plot Global M2 versus [your favorite alt] despite the numerous requests to do so? Because it's inaccurate. And because BTC leads alts. If BTC doesn't move up, most alts don't have a chance to in any meaningful way. Therefore, it only makes sense to follow BTC as the altcoin leading indicator. Furthermore, altcoins have lower market caps and increased volatility and thus are even less likely to be accurate when charted against M2. So, look at what BTC does first.
Here are some hard, cold facts about altcoins: Not all past altcoins will win the same. Some will see new ATHs. Poor ones won't. Not all past outperforming alts will outperform again. Only the strongest will again provide great gains as they did before. Add some luck and narrative shifts to the equation and you have your formula.
This is why it's important to pick wisely and why alts (especially mid- and low-market cap alts) are a *GAMBLE*—not an investment. Altcoins are gambling.
Altcoin buyers (notice I didn't use the word "investors") should be looking for the periods of outperformance (where alts perform better than BTC) in which to capitalize on outsized returns, but should not be planning on holding them long term. As I've said before: Almost all alts lose value when priced in BTC given a long enough time horizon.
Pop Quiz: Where is it best to hold long-term value?
Alts or BTC?
Answer: BTC.
Read this twice: Once the Bitcoin bull run is over, your alt will lose more value that BTC does on a relative basis. The lower the market cap your altcoin, the harder it will get decimated, and the more value it will lose against BTC in the years that follow. I'm not trying to depress you-- I just want to keep things realistic and offer the sobering truth.
Cheers and enjoy the gains ahead!
