- Wall Street loves crypto right now.
- Financial giants pour into digital assets like never before.
- So why are investors crying their eyes out?
Crypto investors should be popping the Champagne.
Wall Street has finally embraced crypto, and with President Donald Trump in the White House “the biggest risks to crypto, like government bans or legal threats to software developers, are distant nightmares,” wrote Matt Hougan, chief investment officer at Bitwise, in a Wednesday blog.
“It is arguably the best time in history to invest in crypto,” he added.
But instead of celebrating, the mood among retail investors is at “one of the lowest” points ever, Hougan notes.
What gives?
Wen altcoin season?
The answer: Altcoins are doing poorly, Hougan said.
While spot Bitcoin exchange-traded funds have pumped the main crypto close to 90% over the past year, other digital assets’ growth has lagged behind. Solana and XRP are two notable exceptions.
“The average crypto asset is getting crushed,” Hougan wrote.
Altcoins lack a “major new application” to propel them to bull run heights. Initial coin offerings — which seem to be staging a quiet comeback — fuelled the pump of 2017, while a bull run in 2020 benefited from the emergence of decentralised finance.
“The closest we have in the altcoin space today is the memecoin boom, but most investors see this for what it is: a short-term casino,” Hougan wrote.
“It’s hard to tell yourself that you’re building a new and better world on the basis of Fartcoin or the Hawk Tuah token.”
‘Signals opportunity’
However, in the long term, “the setup for altcoins is stronger than at any point in history,” Hougan said.
Since the start of the year, former Securities and Exchange Chair Gary Gensler has departed, which will arguably cap the agency’s campaign against the industry.
Hougan didn’t mention Gensler by name, but suggested that changes at the SEC will pull altcoins out of the “regulatory grey zone” they’ve found themselves in over the past four years, which some say stunted the adoption of crypto.
In recent weeks, stablecoins have become a “national priority,” which could prove bullish for Ethereum and Solana, as would the fact that institutions are building crypto applications that “will bring DeFi applications to the masses,” Hougan said.
“In a year or two, my guess is that you’re not going to have to squint to see the transformation in altcoins; the impact will be self-evident. And overwhelming,” Hougan said.
He refrained from predicting what will trigger the next altcoin season, but concluded that while “sentiment is bad in crypto right now, and to me, that signals opportunity.”
Crypto market movers
- Bitcoin is down 0.2% over the past 24 hours to trade at $95,906.
- Ethereum is up 1% to trade at $2,659.
What we’re reading
- Robinhood’s surprise 700% crypto sales surge drives analysts to rip up targets ― DL News
- Trump Is Having Second Thoughts About His Crypto Council ― Unchained
- Uh oh. Inflation came in hot ― Milk Road
- Trump family’s Word Liberty Financial plans crypto stockpile after sudden $361m outflow ― DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
