Higher Quality Assets Will Define the Altcoin Winners – Crypto Analyst Explains How

• Will Clemente (co-founder of Reflexivity Research and crypto analyst) argues that VCs will unlikely continue investing in altcoins.
• His viewpoint boils down to the fact that only a few altcoins have high standards and there being too many in the market.
• Despite the bleak outlook, he believes that dwindling investments make higher quality ones more likely to succeed.

Crypto analyst Will Clemente recently suggested that the altcoin market needs to rally to receive a large chunk of change from VCs.

According to him, it's likely that few crypto projects will be funded unless there's a substantial bull market.'

The primary reason for his viewpoint is that altcoins fall short of market performance standards, and there are too many to choose from.

Let's explore the crypto expert's perspective alongside contrasting ones.

There Are 14K+ Cryptocurrencies - How Many Actually Hold Value?

In a recent tweet thread, Clemente declared the crypto market cannot absorb the number of altcoins flooding into it. According to CoinGecko, there are 14,697 cryptocurrencies, and the altcoin market cap is currently $884B.

According to Exploding Topics' data, there were just 2,403 total cryptocurrencies in January 2020, highlighting an eye-boggling 511.61% four-year increase.

Exploding Topics noted that not all cryptocurrencies are active or valuable.' It found only 8,985 crypto assets were active in March 2024.

Likely aware of this declining momentum, Clemente warned that professional money managers' mostly hold their funds in vaporware altcoins (ones that fail to deliver their grand promises and fizzle out).

Additionally, he suggested there's a lack of capital available for new crypto projects, especially high quality ones.

This could trigger a major market downturn and force the entire industry to be reassessed.

However, on a positive note, the crypto analyst implied that altcoins that struggle to get funded will decline in number, giving the better-performing ones a greater chance of success.

Once bad capital allocation is gone and there are higher quality money managers + higher quality assets to allocate to, this will lead to outperformance relative to benchmarks again, more money pouring into new funds, and the cycle starts over.Will ClementeCrypto Community Divides Over Altcoins Prospects

Following Clemente's post, some of his X followers echoed their frustration with vaporware and VC scam coins. The hope is that his predictions will come true and they will fade away.

However, many other crypto enthusiasts have opposing opinions.

Some have said that altcoins are undervalued.' Meanwhile, others believe now's a good time to buy altcoins before the market perks up over the next few months.

Verdict - Altcoins Have an Uncertain Future

Clemente interestingly suggests that once the market strips itself of poorly funded projects, investors will only be left with high quality money managers and assets. This cleansing could lead to a resurgence in asset performance and crypto interest.

However,altcoins' future trajectory is far from clear. There's a possible market downturn on the horizon, and the survival of these cryptocurrencies might depend on their practical use cases to attract investment.

References

Click to expand and view sources

• Will Clemente's Twitter Account (X)
• Global Cryptocurrency Market Cap Charts (CoinMarketCap)
• How Many Cryptocurrencies Are There In 2024? (Exploding Topics)
• Alexander Baumann's Twitter Account (X)
• Alex Rus Twitter Account (X)
• Michael van de Poppe's Twitter Account (X)

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