Crypto investors face a major challenge in 2024. According to analysts, as much as $44 billion in previously blocked altcoins will be released onto the markets in the coming months. An astronomical figure which could well destabilize a large number of alternative projects. Indeed, this massive surge of new cryptocurrencies in circulation threatens to crush prices through excessive selling pressure.
Crypto: The pitfalls of low supply altcoins
From the outset, it is clear that crypto alternatives have a significantly higher risk profile than heavyweights like Bitcoin or Ether. The reason ? Many alternative tokens deliberately choose to start with an abnormally low circulating supply. A controversial strategy aimed at artificially inflating overall market value.
But this tactic turns out to be a dangerously precarious game for retail investors. Indeed, when founders or historical investors decide to release their token reserves, devastating selling pressure is exerted. Prices then collapse, transforming these small crypto investors into real scapegoats.
Projects like DYDx in the past, or more recently Altlayer, Pixels and ApeCoin, perfectly illustrate these abuses. With a circulating supply of less than 10% at launch, DYDx was thus able to maintain its price above 20 dollars for many months before the inevitable collapse. A typical scenario that repeats itself over and over again, much to the dismay of beginner crypto investors.
2024, the year of all risks for altcoins
Unfortunately, this year 2024 promises to be a real ordeal for the alternative crypto ecosystem. Indeed, the volume of tokens unlocked is expected to reach a stratospheric level of $44 billion according to estimates. A truly unprecedented wave!
Starting in June, billions of Altlayer (ALT), Pixels (PIXEL) and ApeCoin (APE) will be released, exposing these projects to an immense risk of correction. But this is only the beginning according to renowned analyst Alex Wacy, who warns. According to him, a significant amount of tokens will enter the crypto market this year. Without sufficient capital inflow, selling pressure could increase significantly for many altcoins.
To survive this $44 billion deluge, investors will need to be extra careful and agile in 2024. Adopting an ultra-selective approach will be essential to avoid the worst investor traps among the surge of emerging altcoins. Extremely vigilantly monitor liquidity levels and release schedules for each crypto. These are the key words to succeed in this very high-risk environment.
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