Altcoin Season: Here’s When Altcoins Could Finally Wake Up

In last post on When is Altcoin season, I pointed key factors that points to the fact that when not yet by any means in altcoin season. One of the major noted factors is the importance of retail investors. In the crypto industry, retail investors play a significant role. Reasons for this is that, retail investors constitution the largest population in crypto. Secondly, wider spread or crypto awareness spreads through them. Thirdly, this is the only population that make adequate research about crypto via media e.g. The Washington post, The New York Times, etc.

It is also important to understand that from all indication, most retail investors and institutional investors buying into the spot bitcoin ETFs are those who had not been investing in altcoins before. Therefore, it is easy to understand that these ETF investors cannot just pool their investments from the ETF, send them to centralized exchanges or decentralized platforms to buy altcoins, as it had been the whales’ way previously.

Now the point remains that, altcoin season cannot be achieved through ETF investors. ETF investments are custodial assets with fiat backup. So, buying altcoin for these investors would amount them, selling their shares in fiat currency. Then, they would have to send these funds to exchanges to buy into altcoins.

The question now becomes, when is altcoin season? Or perhaps, what could be its signs?

Well, the catalyst that will spike the altcoin season depends largely on macro-economic factors and is then supported by micro-economic factors.

What are these macro-economic factors to look out for?

First, the interest rates. It is safe to say that people’s spending or purchasing strength largely depends on how much money they have left over after paying debts. This is where the FED plays a role. Basically, the FED is assumed to take a decision by September this year on interest rates. A reduction in rates after September would mean a boost in spending strength. This means that people can still have enough to spend liberally after paying their debts. At this point, we will begin to see wider retail ininvestor inflows back to exchanges to purchase altcoins. Cutting rates will make bitcoin to rally, possibly breaking its all-time high to $100k. This will attract more retail investors because the more bitcoin goes higher, the more media coverage it gets and thus, draws attention. In addition, Eth will also need to break its all time high, creating a pattern and market psychology that leaves investors with the thoughts of investing in altcoins that are about to rally hard vertically.

Now, it is more important to note that, not all altcoins will wake up during the next altcoin season. The reason is simple. The crypto market pattern and trend has shown that. Most altcoins that thrived in the 2017/218 season did not make it way up during the 2020–2021 season. I have also explained this more in our previous posts. The crypto space is evolving. Many projects are being created to replace and advance more on problems; older projects tend to be solving in a more appealing way that gives investors more confidence. Also, the space does not move without compelling narrative.

So, if you are holding some of the altcoins that thrived in the last altcoin season, you will need to have a rethink. Do they still have validity? Are they among the compelling narratives this cycle E.g. AI, DePIN, RWA, Gaming etc.? What’s the strength of their potential e.g.  the projects funding, team, community, user growth, roadmap.? If these questions are not well answered with a confident yes, then, you will have to think of selling off those moribund projects, even at loss. It is better to get the little out of them and re-invest in better promising projects.

In summary, should the FED keep monetary climate favourable by September, we will be seeing dra drastic wake up of viable altcoins. All you need is a good altcoin portfolio to turn $100 to over $10,000.

One more important factor to note is the US election. I have also dropped all you need to know about that in my previous posts. Do well to read that up to know what’s next for bitcoin and the crypto market after the election and where BTC could be headed next in price.