For Battaglia, “the specialization cycle came.”
Altcoins with true utility must find corporate users who buy them.
Trader and analyst David Battaglia considers that the cryptocurrency market is going through a critical stage in which many Altcoins could disappear. In a reflection published in its X account, Battaglia affirms that this could be the cycle of the great extinction of alternative cryptocurrencies to Bitcoin (BTC), due to a more mature and demanding environment than in previous cycles.
According to the analyst, in the past the Altcoins rose in block price, regardless of whether their proposals were viable or not.
“That market has always risen in pack without discriminating much about the type of currency that was, that is, it could be any shit or interesting ideas,” he wrote. However, it ensures that this dynamic has changed. For him, “the specialization cycle came.”
Battaglia holds that now they will only have the possibility of surviving those Altcoins that manage to develop useful products or services in the real world. He adds that many proposals try to emulate Bitcoin, as is the case of XRP, Cardano (ADA) or Ethher (eth) with corporate treasury ideas, but considers that “All coins that seek to make a better BTC are scams since day 1”.
The trader highlights that these cryptocurrencies must focus on getting corporate users, developing practical applications and adapting to competition. He quotes as an example services oriented to services (specifically mentions tetha), that they must demonstrate their capacity for innovation. In his opinion, projects that fail to attract corporate clients will be obsolete.
In his analysis, Battaglia also mentions that Altcoins face several obstacles: irrelevant exchanges for the volume of Bitcoin, a market saturated with failed proposals and the growing competition of traditional treasury solutions. That is why he states that the narratives such as a “faster bitcoin” or the replacement of the swift system (this is the case of XRP and Ripple) have not managed to materialize, and considers that they will continue to be failures in the near future.
The market validates that vision
The current market context seems to support its vision. For example, the Altcoins seasonal index, which measures the performance of these cryptocurrencies in relation to Bitcoin, He has not managed to settle in “Altcoins season” territory (or Altseason) in recent months.
On the contrary, it has remained mostly in Bitcoin domain, reflecting that few Altcoins are overcoming their performance, as seen below:
On the other hand, according to data De Coinmarketcap, only 15 Altcoins have shown a higher performance than Bitcoin in the last 90 days, as seen below. It is a clear signal of the general weakening of the Altcoins sector.
This perception is also shared by other voices of the ecosystem. Cathie Wood, CEO of Ark Investments, recently said that “most cryptocurrencies will die”, and that only three could survive in the long term: Bitcoin, Ethher (Eth) and Solana (Sun). For Wood, the market is being purged and only the projects with solid technological and economic bases will remain.
In addition, the macro stage of the market presents unique challenges compared to previous cycles. Bitcoin, although it has remained most firm over USD 100,000 for weeks, has registered significant volatility, as can be seen in the following graph, what has generated an uncertainty environment for the Altcoins market.
And, during these volatile stages, Altcoins usually experience more pronounced fallsdirectly affecting the profitability of investors.
There are not too many high earnings investors currently
In relation to all this, it is worth mentioning that according to a recent Cryptoquant report, it is “almost impossible to find investors who obtain profits with Altcoins” in this phase of the cycle. This situation has caused frustration in the marketswhere portfolios focused on alternative cryptocurrencies accumulate losses.
However, the author of the report clarifies that it is not yet time to abandon all hope. He believes that, as the progress cycle, Bitcoin’s dominance could be reduced and opened space for a more marked recovery of the Altcoins, as cryptootics reported. “Since we are already in the second half of the cycle, it is worth waiting for the next Bitcoin ascending movement,” he says.
Other analysts coincide with the position that this cycle will be mostly favorable to Bitcoin. Agustín Nátoli, an ecosystem specialist, considers that “Bitcoin will rise more than the Altcoins” and that it is unlikely that a true season of Altcoins will occur during this cycle, as this medium reported. In his opinion, the current environment does not favor the highest risk assetsand the capital is being concentrated in cryptocurrencies of greater capitalization.
In this scenario, Battaglia’s thesis points to a structural transformation of the ecosystem. Unlike past cycles, where generalized speculation and indiscriminate price increase, pricing, predominated Today’s market requires utility, adoption and differentiation.
For this analyst, it is not a bearish signal, but of a reflection on the direction that the sector is taking.
As you can see, the ecosystem could be entering a consolidation phase, where the market rewards projects with solid foundations and It punishes those who have failed to demonstrate their usefulness.
In essence, Altcoins face increasing pressure to justify their existence and attract real users. If they do not, they could be out of the next cycle.
