Seasons come and go, as the sun circles around us quarter by quarter, we await a season not in our calendars but in our hearts. Indeed, the altcoin season, the holy season of returns is once again delayed. According to CoinShares, the bear market in the recent months is encouraging crypto investors towards Bitcoin and Ethereum and away from altcoins. Generally speaking, the investor sentiment could take some time to shift in favor of an altcoin season. Especially, the highly volatile market can turn on a dime. However, it seems that previous speculations are shattered as BTC dominance continues to grow.
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Tis Not the Altcoin Season
The digital asset manager CoinShares has done a recent study of investor sentiment. Interestingly, investor sentiment in Bitcoin and Ethereum improved in December 2021 following the deep price correction. On the other hand, the appeal to invest in majority of altcoins especially ADA and Solana decline in the meantime.
“During the month of December 2021, when market prices were declining sharply, investor sentiment improved for the larger digital assets Bitcoin, Ethereum and multi-asset, while sentiment declined for the smaller assets such as Cardano, Solana and other altcoins.”
However, investor sentiment in Polkadot remained unchanged according to the survey.
What does it say about the investors? Considering the higher volatility of such altcoins and Bitcoin’s dominance, investors are more inclined to buy Bitcoin and Ethereum. In that sense, the deep correction spooked the altcoin season away.
Furthermore, allocations to digital assets are correlated to investor sentiment according to the study.
“Allocations to digital assets mirrored the growth outlook for digital assets, where allocations were minimally increased for the larger coins at the expense of altcoins.”
Regulations Coming
At this point, it is certain that a vast majority of countries would impose heavy regulations on the crypto market. Primarily, the speculation over regulations is single handedly pushing the market down.
“There has also been an almost doubling in the number of investors concerned about regulation.
Regulation has taken the top spot for the key risks amongst investors despite greater clarity on MiCA [Regulation of Markets in Crypto-assets] and the recent decision from the SEC [U.S. Securities and Exchange Commission] to allow a Bitcoin futures ETF [Exchange-Traded Fund].”
The growing concerns and frustrating speculations are now amplified as regulators remain quiet and unclear about the upcoming regulations.
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