Bitcoin’s Rise and Memecoins’ Moment — Is It Too Early To Declare The Return of Crypto? – The Average Joe
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    Bitcoin’s Rise and Memecoins’ Moment — Is It Too Early To Declare The Return of Crypto?

    victorlei

    May 2, 2024

    Bitcoin’s fourth halving event is now history. Spot bitcoin ETFs in the US have been given the green light. Bitcoin has surged nearly 110% over the past year, while memecoins are trading like it’s 2022 again. Still, it took two years of gut-wrenching pain to get here. Crypto, often dubbed the Wild West of investments, has taken a Mike Tyson-style KO punch right in the face — but the industry continues to get back up. Question is, how much more juice does the industry have?

    2024 marked a major milestone: The launch of spot bitcoin ETFs in the US opened doors for many investment advisors managing trillions in dollars combined, allowing them to delve into the world of crypto.

    • Last month, Cetera, a wealth management firm overseeing $190B in client assets, began allowing its advisers to allocate client assets to spot bitcoin ETFs.
    • This followed a decision in February by Carson Group, which manages $30B, to allow their advisors to invest. Other countries are also warming up to bitcoin.

    Hong Kong’s debut of its first spot Bitcoin and Ethereum ETFs this week is a testament to this trend. Australia is expected to follow suit with its first spot Bitcoin ETF approval later this year. And, of course, we just concluded the fourth bitcoin halving — a historically bullish event for the token’s price one year before and after the event. One year ago? ✅ One year later? TBD. But two weeks after the Apr. 22 event, bitcoin’s price has dipped nearly 10%.

    Why was the Bitcoin halving so uneventful?

    In previous cycles, bitcoin experienced significant surges post-halving: 5,000% between the first and second halving, 1,300% from 2016 to 2020, and 700% from 2020 to 2024. While the gains from the recent cycle were still far above the S&P 500’s performance during the same time, they were significantly lower than those of previous bull markets.

    The halving just isn’t what it used to be, and it’s possible that the returns in the coming cycles may yield even lower returns — that is, unless you venture into riskier parts of crypto.

    • In the 12-18 months following the halving, smaller alternative cryptocurrencies tend to outperform, leading to what is known as altcoin season.
    • The cycle goes like this: Bitcoin rises, followed by other large tokens like Ether and eventually smaller cryptocurrencies, including memecoins — a common occurrence in past cycles.

    And this year, it’s not just retail traders getting in on smaller tokens; several hedge funds have also warmed up to them. According to Bloomberg, popular hedge fund Pantera Capital’s Paul Veradittakit said, “Memecoin trading creates gigantic new market opportunities.” Pantera’s Portfolio Manager Cosmo Jiang added, “Memecoins initially started as clearly a joke” — but have evolved into culture coins that have surpassed $50B in market cap.

    The halving was just the beginning

    In the last two bull markets, at least 10 different cryptos returned 10x more than Bitcoin. With interest rate cuts still on the horizon, it may only be a matter of time before altcoins surge once more.

    James Altucher, a crypto millionaire, first started talking about Bitcoin on CNBC in 2013 when it was trading for about $100. He’s personally made gains as high as 7,000% in four years in the alternative crypto market. And he’s put together a list of the top 10 cryptos for investors to buy now.

    Get the report here.

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