If you searched for Bitcoin on the internet, you’d be inundated with millions of results. The cryptocurrency market has become so saturated that it is difficult to sift through legitimate experts compared to “analysts” who just want to rank high on Google to advertise themselves.
Cryptocurrency has emerged from the virtual unknown corners of the internet to become a feature on some of the biggest platforms possible.
Whether it’s regular tweets from Elon Musk, sketches on SNL in the United States, or casinos beginning to accept cryptocurrency as a form of payment for games at https://www.bovada.lv/casino/slots, it has entered popular culture and will likely remain for some time.
You may have heard this term a few times and think it has a specific technical meaning. However, altcoins are digital assets that are alternatives to Bitcoin. That’s the entire definition.
Similar to Bitcoin, they are created using blockchain technology and offer a variety of features that make them attractive to investors. The biggest altcoin by market cap at the moment is Ethereum.
Altcoins can be used for trading, investing, and even as a form of payment. Some of these projects are at the leading edge of technology. With over 20,000 cryptocurrencies available, you must know how to separate effective projects from fads.
In a bear market, some of these coins could disappear altogether. Unfortunately, if that were the case, your money would likely disappear alongside it.
A bear market is the opposite of a bull market. A bull market is when confidence is high, prices are pumping, and a bear market is when sentiment is negative, and there’s a lot of uncertainty and red lines on the chart.
Usually, a cryptocurrency bear market is far more volatile than a stock market bear market, as cryptocurrency is the riskiest asset you can invest in. For example, it will drop more than 50% in a short period, such as 2 to 3 days.
It is characterized by pessimism and negative investor sentiment, which decreases the value of stocks and other investments. During this time, investors may be reluctant to buy cryptocurrency due to fear of further losses.
As such, bear markets can have a significant impact on the economy as well as on individual investors. Money is pulled out of cryptocurrencies, or many altcoins are sold, and investors put their money into safer alternatives like Bitcoin or Ethereum, which is why many altcoins don’t survive.
Research shows that some altcoins like Avalanche (AVAX), Fantom (FTM) and Cardano (ADA) have serious utility and could survive the next bear market. All three projects have begun to make a name for themselves over the last few years and have attracted serious investment.
However, survival doesn’t mean they will thrive by any stretch of the imagination. Most altcoins dip over 80% in value during a bear market.
The price of Bitcoin drags down the price of the market considerably. Therefore, if any investment is made at this time, it is usually in either Bitcoin or Ethereum, considered the premier altcoin.
There has been some quiet optimism recently as Bitcoin rallied in Q1 of 2023 and dragged the price of several alts up with it. Following Microsoft’s colossal investment in Chat GPT, AI cryptocurrencies have exploded in value, with many doubling or tripling in price.
It is too early to tell whether this is just a trend or if there’s any substance to the longevity of these tokens.
It is unlikely that many of these tokens would be equipped to handle a bear market. That isn’t a slight on them as projects; some are fantastic projects, but the bear market spares nobody, and it can be a brutal environment to trade.
If Ripple (XRP) can get clarity in their high-profile SEC case, it could come out of the other side with a clear direction and a lot of investment.
In the event of a bear market, they would likely survive, given that they are propped up by one of the biggest technology companies in the world with a turnover in the tens of billions of dollars annually.
Without sounding too pessimistic, plenty of cryptocurrencies are decimated by bear markets and don’t return to anywhere near the same level as their previous market highs. There can be many reasons for this, but the primary issue is that a bear market can stifle momentum. Once investment and visibility slow down, the price can bleed out uncomfortably.
Ethereum is probably the best bet for altcoins that will survive a future bear market, but there will likely be a few surprise ones that manage to dodge the most severe turbulence to make it out the other side.