Smaller Cryptocurrencies May Offer Investment Opportunities Despite Recent Dips
Summary:
Cryptocurrencies with a market value under $10 billion may offer investment opportunities as their prices have fallen since Bitcoin's peak in March, according to Jamie Coutts, chief crypto analyst at RealVision. He noted smaller cryptocurrencies have been hit harder than Bitcoin and Ether, which experienced declines of 11% and 5% respectively, over the past three months. Additionally, metaverse-related tokens saw the lowest returns in the past three months. Meanwhile, Institutional interest in altcoins is growing, with Franklin Templeton planning to introduce a crypto fund for institutional investors.
Cryptocurrencies with a market value lower than $10 billion could present several investing opportunities as their values have fallen since Bitcoin reached a historic peak earlier in the year. "Since Bitcoin's March peak, smaller cryptocurrencies have taken a hit," noted Jamie Coutts, the head crypto analyst at RealVision, in a post on June 13. Bitcoin reached a record-setting $73,679 on March 13, however, over the past week, it dropped by nearly 6% to $67,126, as per data from Cointelegraph Markets Pro. Coutts continued, "If the ongoing slump is just an ordinary mid-cycle correction, which I surmise it is, then there could be investment prospects in mid-to-small cap cryptocurrencies once the situation stabilises."
The equal weighted crypto index declined by 33% against the market cap index. Source: Jamie Coutts/X. According to the data gathered by Bitformance, the top 200 equal weight index, which equally measures all cryptocurrencies irrespective of their market value, plummeted by over 30% against the Market Cap index, where market value determines the weight of cryptocurrencies, over the previous three months. This drop signifies that smaller cryptos have underperformed compared to larger ones that comprise the larger portion of the market cap index.
Coutts also highlighted that Bitcoin and Ether saw respective drops of 11% and 5% over the same timeframe. Over the past week, Bitcoin declined by 6.10%. Source: CoinMarketCap. Additionally, he noted that in the past three months, metaverse-related tokens had the lowest returns on the index, with a negative return of 44.13%. In the category of cryptocurrencies valued under $1 billion, metaverse tokens The Sandbox (SAND) and Decentraland (MANA) both fell by over 15% within the past week, CoinGecko reports.
Related: Traders predict a bullish rebound following a quick shakeout in the crypto market.
As Bitcoin and Ether continue to grow, institutional interest in smaller cryptos also continues. On June 6, Franklin Templeton announced its plan to launch a new crypto fund for institutional investors to broaden their altcoin exposure. The asset management company hasn't revealed the specific altcoins that the fund will include, but they recently praised the Solana network.
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Published At
6/14/2024 9:09:14 AM
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