Crypto Total Market Cap Excluding BTC and ETH, $CRYPTOCAP
Description
⋅
Since the beginning of 2023 BITCOIN has been on a relentless upward trajectory. As the highest market cap cryptocurrency it often sets the tone for the entire market. When Bitcoin goes up it tends to drag the rest of the market up with it and the same when Bitcoin falls is the general rule of thumb.
This post is to showcase the difference between Bitcoins market cap (TOTAL) Vs the Altcoin market cap which excludes Bitcoin and Ethereum (TOTAL3). As the market leader Bitcoin is often the first mover and that can be seen in the chart on the left, we have at first glass a mirror image on the TOTAL3 chart on the right but with a few key differences:
- When Bitcoin fell from its ATH in November, price found it's bottom at the previous cycles ATH as seen by the blue horizontal ray. Whereas the altcoin market continued to drop below its previous ATH by another 19.67%. It's an important difference because it shows that altcoins are worse off in a bear market when compared to Bitcoin, and they start from further back once the Bullrun arrives.
- We can see that both charts are very similar, the next biggest difference is clearly the progression made in this Bullrun so far. Bitcoin has already moved past its "right shoulder" of the head and shoulders price pattern, TOTAL3 however is still some ways off that mark, the chart shows altcoins have a 38% gap between current level and the top of that "right shoulder".
The reason for the gap in the race can be explained the same way each cycle because they're exactly the same patterns each cycle. Bitcoin is the first mover as it is the biggest by market cap, the same cycle of capital injection happens each and every time:
BITCOIN ----> LARGE CAPS ----> MID CAPS ----> SMALL CAPS
Profits get rotated into the next more risky investment over and over until the blow off top and retail are left holding their positions all the way down. This will most likely still be the case this cycle however there is a new player on the field...
BTC ETF's...
This is new and exclusive to this cycle and I believe this will partly change the dynamic of the cycle when compared to years gone by. With over $10 BILLION DOLLARS of net inflows into BTC the institutional buyers are now here in a much bigger way than ever before, how will this disrupt the money flow? It could prevent profits from rotating somewhat into the large caps, but not completely. Naturally the ETF providers will have a large stake in the holding of BITCOIN and are going to be less inclined to sell when the cycle looks to near its end as they are still providing the service to their customers. Having less sellside pressure will help BTC hold its value.
The altcoins may get the negative side of this as less profits in theory will rotate into smaller cap coins and result in a smaller 'Altseason". This is the cost of institutional adoption. There is always the possibility of altcoin ETF's but that is another discussion. For now I can see altcoins playing catch up later this year and going into 2025.
Comment
⋅
Since BTC has hit ATH and we had a sell off on the news, Bitcoin has steadied itself around the mid 60k's. This generally gives altcoins the greenlight to push on and catch up, as the chart suggest the altcoin market still has a long way to catch up and this will be a good opportunity to do that.
The AI narrative coins will see the best gains in my opinion at least in the short term and will contribute towards the altcoin markets rally.
ai coins will be the nvdia of crypto market. I think some coins will just carry TOTAL3. I don't expect to much from layer 1s or 2s cuz there's too much competition.
ProR35
⋅
@paleb1ue, AI coins currently represent 28.5B of the 720B TOTAL3 MCap, only 4% of altcoins. I do believe AI coins will offer some of the best returns and will definitely increase their market , as it stands they do not impact market cap greatly.
mikroland
⋅
great analysis! I do think though that lots of that record money currently going into BTC will find its way into alt coins and we will see the largest alt season we've ever seen, in terms of TOTAL3 mcap.
ProR35
⋅
@mikroland, Thank you for your comment! I do agree that it's possible for alt season/TOTAL3 to be huge as it always is, but that would purely be off the back off the retail investors that provide crazy gains at the end of the cycle and are inevitably exit liquidity for smart money. With such big institutions heavily invested in this cycle that will primarily focus on BTC I just have a feeling that the focus will be on Bitcoin for longer.
Now if there were to be significant institutional investment in altcoins as well this cycle then that changes the whole dynamic of the Bullrun and the market as a whole!
mikroland
⋅
@ProR35 well we are nearly 800B and last cycle topped at 1.1T. Since we are so early in the cycle that alone should tell us we are going much higher plus looking at the chart.
@mikroland, We are definitely going much higher, that's all but confirmed. My point was more just how much altcoins will move relative to BTC this cycle. No doubt altcoins will still offer the best ROI in the next year or so.