Matt Hougan, CIo at Bitwise Invest, recently took to X to share his thoughts on the current market situation of
and the altcoin market. As per him, the latest price hikes in the altcoin market are just the elevations that the conventional fiat economy usually witnesses. Hougan provided details about the chief factors behind the rising altcoins. As per him, the bull run will last longer and the ‘wealth effect’ will keep on increasing with the profit-taking by the whales.
Matt Hougan Says Wealth Effect Is Influencing Altcoins Crypto Just Like Traditional Finance
As per him, independent marketing organizations (IMOs) were the main driving force that created a wealth effect. He asserted that crypto investors generate profit in Bitcoin and when they feel wealthy, they look towards altcoins. He added that this leads them toward additional speculative assets for investment. This is the same thing that also takes place in the conventional fiat market.
Hougan disclosed that in traditional finance, people generate money through large caps to begin investment in minor caps. Venture capitals occupy a significant place among them. The respective method is not a new one. While specifically discussing the altcoins, he said that this market is not all about Bitcoin’s percentage return. On the other hand, the altcoin season results from the overall wealth effect.
In this way, he claimed, the market capitalization of Bitcoin has increased by up to $1T. According to Hougan, this figure was greater than the earlier cycles. However, the percentage scale in the earlier cycle was comparatively larger. Keeping that in view, rich Bitcoin holders are investing in altcoins. While several of such tokens are very small-sized, there is no need to invest much wealth to raise their price.
The Analyst Says This May Lead to “Everything Season”
In his words, the current market scenario signifies that the wealth effect has been ongoing for some time. More funds are entering the market through ETFs while the bull market of Bitcoin is even now in the early stages. This may lead to “everything season” rather than just “altcoin season,” he added. Thus he cautioned about some terrible projects during this time of excited bull markets.
Source: https://blockchainreporter.net/crypto-expert-discusses-wealth-effect-in-bitcoin-and-altcoin-market/