Is there another alt season on the way?

10 May, 2019
by David Robb
Is there another alt season on the way?

With Bitcoin's rally continuing well past the important $6000 mark in the past few days, many observers are seeing the start of a new bull market. One analyst pointed out that BTC's performance may also instigate a new alt season, with other cryptos making significant price gains.

According to Chris Burniske, a partner at venture capital firm Placeholder, BTC rallies are invariably followed by a number of altcoins seeing even bigger gains. He identifies a dynamic where Bitcoin whales will move funds from Bitcoin into whichever altcoins are undervalued, pumping their price by even greater proportions than BTC, then selling them off in order to buy even more BTC.

Burniske refers to Bitcoin as the crypto market's 'beta', meaning it sets prices for the overall market. Other cryptos are of a higher beta than BTC, which means they will see higher gains and greater losses in turn, as BTC's price varies. These fluctuations are greater as they have smaller market caps and are of a higher risk.

This analysis won't come as a surprise to most crypto traders, who accept as a truism that altcoins rise and fall in the wake of Bitcoin's price movements. It's neverthless interesting to think about the specific dynamics of this phenomenon, and we currently have the first opportunity for almost a year to see this in action. Burniske claims that this cycle will likely continue until better methods for evaluating different crypto protocols are found.

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Read more about: Bitcoin (BTC)


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