Selective flow amid altcoin watchfulness…Ethereum and Solana 'in focus' if regulatory environment improves

Structural improvements underway for market institutionalization

High volatility amid transitional flows

Strong rally if the CLARITY Act passes

Ethereum and Solana could hit record highs

As discussions to overhaul cryptocurrency regulation progress, centered on the United States, expectations for the altcoin market this year are also growing. The market has raised the possibility of a recovery centered on 'blue-chip' altcoins such as Ethereum and Solana, while voices warning about volatility have also emerged.

On the 6th, the industry said that global cryptocurrency exchange Coinbase analyzed in its annual report, "This year's altcoin market is in a transitional expansion flow where institutionalization and structural reorganization are progressing, rather than a sharp rally or collapse," and "Because the range of uncertainty is wide, the possibility of increased volatility remains open."

In particular, it is forecast that Ethereum and Solana's growth will continue. The report evaluated, "Ethereum established itself last year as a payment and settlement infrastructure centered on institutions, and Solana also expanded its buyer base with the spread of Digital Asset Treasury (DAT) companies, the launch of U.S. spot exchange-traded funds (ETFs), and the introduction of tokenized stocks." Global asset manager Bitwise also analyzed, "This year, stablecoins and tokenization are an irresistible mega-trend, and Ethereum and Solana are likely to be the biggest beneficiaries."

According to domestic cryptocurrency exchange Upbit, the price of Ethereum has been on a weak trend since falling below the 5 million won level in November last year and is trading in the 4.4 million won range. Solana is hovering around 185,000 won.

Improvements in the regulatory environment are also identified as a key variable that will shape market trends this year. The CLARITY Act, which deals with the regulatory framework for the cryptocurrency industry as a whole, is scheduled to begin full discussions starting with the U.S. Senate Banking Committee on the 15th. If the bill reaches agreement, it is also suggested that it could proceed to a vote in the first half of the year. Earlier, SEC commissioner Paul Atkins also said that work on cryptocurrency-related regulatory arrangements will accelerate this year.

Bitwise predicted, "If the CLARITY Act to establish the cryptocurrency market structure passes, it would act as a powerful catalyst for a rise, and Ethereum and Solana are highly likely to set new all-time highs." Jack Fandl, head of Grayscale Research, also said, "The operating environment for virtual asset companies in the U.S. improved considerably last year," and "If clear regulations are established, the scope and growth potential of the cryptocurrency industry will further expand."

The investment industry also forecasts a gradual recovery of the decentralized finance (DeFi) market. Global asset manager 21Shares projected, "DeFi total value locked (TVL) could expand to about $300 billion within the year, roughly double the current level." RAAC founder Kevin Rusher said, "Both institutional and retail investors are seeking profit opportunities in the decentralized finance ecosystem," and "as a result, Ethereum and major altcoins are likely to regain attention."

The market also mentions the possibility of increased volatility for the time being. Cryptocurrency analyst Benjamin Cowen diagnosed, "Some altcoins may set new all-time highs this year, but the likelihood of a large-scale rotation unfolding across the market is not high," and "since a correction phase could continue for a while, managing uncertainty is important."

Kang Min-seung, BloomingBit reporter minriver@bloomingbit.io