"Altcoin Risks Highlighted by Cryptocurrency Market Crash"

Uk Jin

Summary

It reported that the recent cryptocurrency market crash has highlighted the risks of altcoins and could shake market confidence.
Bloomberg News said the crash caused $131 billion in losses in altcoins alone, and the industry raised concerns about a weakening structural support base and the potential contraction of small token markets.
Experts said that altcoins, despite being high-risk assets, had lower returns compared to Bitcoin, Ethereum, stocks, and gold, and that the market is likely to shrink.

The recent crash in the virtual assets (cryptocurrencies) market has raised concerns that market confidence in altcoins (virtual assets excluding Bitcoin) could be shaken.

On the 14th (Korea time), Bloomberg News reported that the crash that occurred on the 11th caused about $380 billion in losses across the entire virtual assets market, of which $131 billion occurred in altcoins with low liquidity and highly speculative characteristics.

Industry voices also say the crash could shake the market position of altcoins. 10x Research said in a report, "This crash shows that the structural support base of the altcoin market has weakened," and analyzed, "As traders and market makers reduce buying pressure and become more risk-averse, small token markets will contract over the long term."

Yevgeny Gavoy, Wintermute's chief executive officer (CEO), also said, "The altcoin market will eventually shrink," adding, "because most investors suffered losses and there were almost no tokens that made a profit." John Todaro, an analyst at Needham, also evaluated, "Despite being high-risk assets, altcoins delivered lower returns compared to Bitcoin (BTC), Ethereum (ETH), stocks, and gold," and said, "This weekend's plunge clearly showed that risk."