The chief investment officer at Bitwise Asset Management has explained why the current bitcoin bull market differs from prior bull markets. He doesn’t expect the bull market or the alts season to “end early,” emphasizing that he expects to see “more of an ‘everything season,'” rather than a classic alts season.
Bitwise CIO Predicts Bitcoin Bull Market Won't End Early — Expects an 'Everything Season'
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Bitwise’s CIO Predicts an ‘Everything Season’ Not Just a Classic ‘Alts Season’
Bitwise’s chief investment officer, Matt Hougan, shared his perspective about the start of an “alts season” in a series of posts on social media platform X on Friday. “Alt season” refers to a period in the cryptocurrency market when alternative cryptocurrencies ( altcoins) see significant price increases and trading volume.
“Lots of discussion out there about the early start of alts season, and some surprise that it’s happening given bitcoin is ‘only’ up a few hundred percent from the lows,” he began. “By comparison, in earlier cycles, the amount of wealth generated by bitcoin rallying was smaller on an absolute dollar scale at this stage in the cycle, even though it was larger on a percentage scale,” Hougan described, elaborating:
So, wealthy crypto investors are starting to take some of their bitcoin wealth and move it into alt coins. Given that many of these coins are relatively small in size, it does not take much money to significantly increase the price.
“More wealth means more money to trickle down to more projects,” the Bitwise CIO noted.
He pointed out another catalyst fueling the alt season. “An added catalyst … and a more exciting one … is that the tech infra for alt coins is significantly improved over past cycles. Things like the Dencun upgrade on Ethereum and the rise of Layer 2s are real technological advances that make non-monetary or tangentially-monetary uses of public blockchain much more interesting than they were in the past,” he detailed. “Combine the historically large wealth effect with better tech infrastructure and you get what we’re seeing now, with a strong alt coin rally.” The executive emphasized:
Importantly, I do not think this means either the bull market or alts season will end early. The reason is: This bull market is different from prior bull markets in one important way.
Hougan explained: “Historically, alts season capped the rise of bitcoin as marginal capital shifted out of bitcoin into the rest of the market. But bitcoin’s 2024 rally is being driven by entirely new money — non-crypto-native money — flowing into the ecosystem via ETFs. This suggests the ‘wealth effect’ can be ongoing for a while, as long as more new money is flowing in (via ETFs) than old money is flowing out (into alts).”
He continued, “Because I think the bitcoin bull market is still in its early stages, I suspect this will be the case,” adding:
The result is more of an ‘everything season’ than a classic ‘alts season.’ That’s what we’re seeing in the market and I suspect it will continue.
Do you agree with Bitwise’s CIO about the current bitcoin bull market and do you expect to see an “everything season”? Let us know in the comments section below.
