During the midst of this Altcoin winter, crypto companies from companies like Coinbase, Circle, and Robinhood are better than all major tokens. Even Bitcoin performs worse than the companies that buy on a daily basis.
Several factors have fueled this trend, including supply and demand, improved macro sentiment after today’s US-China trade agreement, and BTC’s institutional preferences.
Companies outperform the Altcoin market
Many crypto investors are waiting for the Altcoin season, but it’s not just coming. Currently, this expanded doldrum has some competing explanations, but none of them are completely convincing.
Meanwhile, crypto companies like Coinbase have reached an all-time high, with some analysts thinking that the market is completely replacing Altcoins.
While this concept may seem discouraging, persuasive evidence from many industrial sectors supports the claim. There are only a few crypto stocks for companies investing in, paired with countless altcoins.
Furthermore, institutional investors have far more capitalisation and liquidity than retailers. These supply and demand issues leak capital into some stocks.
However, that is only part of the equation. Essentially, corporate money is flooded with crypto, which prefers Bitcoin far more than altcoins.
For example, a survey in April claims that 90% of institutional crypto fund investments are in Bitcoin ETFs, and they are actually ignoring Altcoin products.
At the same time, macroeconomic factors supporting the stock market are improving. For example, the war between Iran and Israel ended less than two weeks after a ceasefire.
And today, Trump has announced a trade deal with China, potentially ending the much-terrified tariff war. As a result, Wall Street is rallying, with US crypto stocks being part of it.
In other words, a handful of “crypto inventory” is basically running on Bitcoin. Retail investors are now able to build a diverse portfolio of corporate BTC holders while abandoning the AltCoin market altogether. That was not possible even a year ago.
Nevertheless, it is oversimplifying to advocate this issue in terms of Altcoins’ corporate disgust. After all, Bitcoin itself has been very unstable lately.
Coinbase, the main crypto exchange, is far ahead of BTC, but also holds a token load. Just yesterday, CEO Brian Armstrong announced that Coinbase will buy Bitcoin every week!
Needless to say, this is a very worrying situation for a number of reasons. Clearly, this trend is completely contrary to the concept of defi.
Why would someone use Altcoins if a corporate investor becomes a major market activist in the crypto industry? How does a decentralized economy work with so much centralization?
Plus, it doesn’t look sustainable. Coinbase has greedyly invested in Bitcoin and has surpassed it at the same time. As crypto companies continue to outperform the real industry, sky speculation will become a major engine of future growth.
Disclaimer
In compliance with Trust Project guidelines, Beincrypto is committed to reporting without bias and transparent. This news article is intended to provide accurate and timely information. However, we recommend that readers independently verify the facts and consult with experts before making decisions based on this content. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
