Bitcoin price is currently consolidating around $60,000, with its dominance growing to 57.4%. This strong dominance has delayed the start of an altcoin season. However, according to James Cheque, Chief Analyst at Glassnode, a major reason for this delay is the impact of memecoins, which he describes as the “silent killer” of the altcoin season.
Meme Coins: Silent Killer of the Altcoin Season
In a recent Rough Consensus podcast, Glassnode Lead Crypto Analyst James Check discussed why altcoin season is getting longer. He pointed out that traders are flocking to popular meme coins like Dogecoin, Shib Inu, and PePe, which are attracting a lot of money.
Meanwhile, this trend is taking money away from traditional altcoins like Ethereum, Solana, and XRP. Moreover, for every dollar that goes to memecoins, about 50 to 60 cents could have gone to these well-known cryptocurrencies.
Since there is only a limited amount of investment money available, this means that if you invest too much in memecoins, there is less available for altcoins.
Trader Runs Towards Memecoin
In the 2021 bull run, memecoins typically gained popularity towards the end of the crypto market rally. This time, however, they are gaining popularity much earlier. Check noted that traders, eager to capitalize on the hype, are quick to jump into popular memecoins, often skipping more stable investments.
For example, the recent rise in popularity of PEPE has led to huge gains in the first half of 2024. According to Lookonchain, some traders have made huge profits, with one savvy investor turning a $3,000 investment into $46 million.
Despite these huge gains, Check noted that there was a time when there was minimal investment in other assets, leaving a gap in the market.
What is the future for Altcoin?
Some experts believe that the current low prices of altcoins and lower trading volumes could herald a future rise. Once the excitement around memecoins dies down, there could be a significant shift back to altcoins, allowing them to catch up and potentially outperform.
