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In today’s video, BeInCrypto’s Jessica Walker makes a case for an upcoming altcoin rally, popularly referred to as ‘alt season.’
With bitcoin’s (btc) dominance of the cryptocurrency market recently declining, many investors are hopeful of renewed interest in non-btc assets.
Several so-called altcoins have recently hit new all-time highs (ATH). Driven by an interest in DeFi and advances in Ethereum (eth) layer-2 scaling techniques, some industry observers believe the run in these assets is really set to take off.
Watch BiC’s Latest Crypto Video News Show Here:
Bitcoin Dominance Dropping
Bitcoin dominance reached a peak of 71.6% on Jan.5, 2021. Buoyed by bullish news of institutional and corporate investments, btc’s market cap grew relative to those of altcoins during the final months of 2020.
Bitcoin market dominance has declined to its lowest levels since last September. On Monday, btc’s market cap accounted for just 60.55% of the entire crypto market.
Interestingly, last September also represented a short-term top in Total Value Locked (TVL) in Decentralized Financial (DeFi) applications. On Sept. 2, as btc dominance reversed from lows of 54.7%, the DeFi market briefly dropped from $9.44 billion to $7.86 billion.
Ethereum and Other Alts Hit ATH
While the bitcoin price has fallen from the all-time highs around $42,000 earlier this month, many altcoin prices have since risen to new ones. Major DeFi protocols and those networks supporting them have performed particularly well.
Ethereum market dominance grew by about 11% when btc’s dominance declined. Eth reached an all-time high of $1,476 on Monday. Mike Novogratz of Galaxy Digital believes eth will continue its rise, predicting highs of $2,600 in the coming months.
Reminder: #Ethereum $ETH broke its ATH today on https://t.co/7ENxmCLA9K
pic.twitter.com/2dCwmPc2xM
— CoinGecko (@coingecko) January 25, 2021
Also rising to new highs were link ($25.83), uni ($12.90), egld ($54.03), and aave ($348.54). Such price performances have many investors optimistic about a potential new alt season.
The growth of DeFi is likely one of the major drivers behind recent changes in btc dominance. Among those coins hitting their all-time highs is the dominant DeFi platform: ethereum; the dominant DeFi oracle service: link; the dominant decentralized exchange (DEX): uni; and major DeFi liquidity protocol: aave.
Additionally, newer smart contract platforms capable of supporting their own DeFi ecosystems have also hit all-time highs. Examples are Elrond (egld) and Avalanche (avax).
Layer-2 Scaling and Airdrops Drive DeFi Interest
BeInCrypto recently reported that potential future airdrops of those platforms launching with layer-2 support might be a significant factor in the growth of certain protocols. Like Uniswap in 2020, previous airdrops were distributed by previous platform usage and represented a risk-free opportunity to profit.
Both Loopring (lrc) and Optimism have recently integrated layer-2 scaling techniques in the form of zkrollups and optimistic rollups. A lack of governance tokens at both projects and plans to follow a ‘path to decentralization’ has many observers expecting future airdrops.
While the prospect of layer-2 project airdrops might encourage greater ethereum usage, the scaling benefits of rollups and other scaling efforts look set to increase Ethereum’s overall capacity significantly.
High gas prices on the network previously represented a bottleneck to adoption for lower net worth users. Thanks to fresh income-generating opportunities and lower gas prices, an influx of new users may be promising drivers for an upcoming alt season.
The post BiC’s Crypto Video News Show: Alt Season 2021 – Everything You Need to Know appeared first on BeInCrypto.
