Market commentary
Since Donald Trump's election victory two weeks ago, bitcoin has been on an uninterrupted upward trend. The promise of looser regulations and lower taxes has been well received by the markets. The victory also coincided with a technical breakout following a six-month consolidation period. Over the past 14 days, bitcoin has surged 33.8% to a new all-time high of $93,000.
First signs of "altcoin season"
Last week we saw the beginnings of a rotation into alternative cryptocurrencies ("altcoins"). Cryptocurrencies associated with Elon Musk - who will head the cost-cutting "DOGE" department under Trump - benefited significantly. This trend intensified last week. In addition to memecoins, older altcoins with limited fundamental activity-jokingly referred to as "dinosaurs"-saw the strongest gains.
The week's top performers were the memecoins Bonk Inu (+113.21%) and Pepe (+82.58%), as well as the crypto "dinosaurs" Stellar (+124.75%), Hedera Hashgraph (+109.05%) and XRP (+96.34%). Ethereum once again lagged, underperforming bitcoin by more than 10%. The total cryptocurrency market capitalization reached a new all-time high of $3 trillion, surpassing the 2021 peak, driven by the strong performance of altcoins. Bitcoin accounts for 60% of the total market cap.
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Retail investors return
Since the approval of spot bitcoin ETFs in January 2024, the price of bitcoin has risen significantly, with a record $27.4 billion flowing into these products. However, the majority of the investment has come from institutional players. Some of the world's largest asset managers, including BlackRock and Fidelity, have encouraged wealthy clients to allocate bitcoin within their traditional portfolios.
Retail investors initially showed little interest, but the trend is changing with bitcoin's new all-time high. Google search interest in the terms "bitcoin" and "crypto" has reached its highest level since 2022. The renewed rise of memecoins also highlights the increasing participation of smaller retail investors who see greater potential in "small caps" for quick gains rather than bitcoin as a store of value. Historically, altcoins have delivered the highest returns in the later stages of previous market cycles, a pattern that seems to be repeating itself now.
Disclaimer
All information in this publication is provided for general information purposes only. The information provided in this publication does not constitute investment advice and is not intended as such. This publication does not constitute and is not intended as an offer, recommendation or solicitation to invest in any financial instrument, including cryptocurrencies and the like. The contents contained in the publication represent the personal opinions of the respective authors and are not suitable or intended as a basis for decision-making.
Risk notice
Investing in cryptocurrencies, is fundamentally associated with risk. The total loss of the invested capital cannot be excluded. Cryptocurrencies are very volatile and can therefore be exposed to extreme price fluctuations in a short period of time.
