Su Zhu, CEO and chief investment officer of the major Asian cryptocurrency fund Three Arrows Capital, says the largest Bitcoin holders are also the largest altcoin holders.
Similarly, data from on-chain market analysis firm Santiment found that Bitcoin and most altcoins remained dominated by whales.
What Does the Data Show?
There is not always a clear narrative from the data. However, what comes out of these data shows that whales dominate Bitcoin in a similar way to altcoins. Zhu said:
“The biggest Bitcoin holders are also the biggest altcoin holders. This was always true and probably always will be. Still, that doesn’t mean BTC isn’t the best money. ”
Based on the data, the idea that large Bitcoin holders do not appear in the altcoin market is probably wrong. The researchers at Santiment explained:
“Of the 855 assets we monitor in-chain data, 727 are in the first 100 addresses with 50% of the total supply. Bitcoin (and most altcoins) still dominates whales. ”
The whales’ strong presence in both the Bitcoin and altcoin markets explains the simultaneous correction in the cryptocurrency markets during deep retreats.
When Bitcoin sees a major correction, both large and medium altcoins tend to go down repeatedly, often seeing harder retracements.
In a bull market, altcoins typically following a Bitcoin rally tend to outperform Bitcoin as seen in the altcoin market in early 2018.
But in a bear market, the altcoin market takes a bigger hit than Bitcoin. When the Bitcoin price dropped below $ 4,000 in March; Even major cryptocurrencies like Ethereum saw a 40% to 60% price drop.
Bitcoin Consolidation Revives Altcoin Market
Therefore, when Bitcoin consolidated in a narrow range or remained stable, it has historically caused the altcoin market to rise.
In late August, Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that Bitcoin will consolidate over $ 10,000. He also stated that an extended consolidation phase will likely boost the momentum of altcoins. Trader said:
“In the daily time frame, we have reached a very important level to gain more momentum. The difference of decline is only visible if we lose this $ 11,500 zone. ”
Since then, the altcoin market has seen a strong upward movement. CoinMarketCap data shows that Bitcoin’s dominance has dropped to 58.1%, which points to an improving altcoin market.
Cryptocurrencies related to Decentralized Finance (DeFi) outperformed Bitcoin and other major cryptocurrencies. Defipulse shows that the total value locked in the DeFi market has reached $ 8 billion, causing many DeFi tokens to recover.
Massive Rise in DeFi Token
YFI has increased significantly in the last 1 month. As it is known, the founders of the project stated that the token had no financial value. However, YFI soared that it started offering serious profits to its investors.
Making a statement on the subject, Arthur Hayes, the CEO of the popular crypto money exchange BitMex, stated that YFI could jump to $ 100,000.