In the crypto market, attention has turned to institutional adoption of Bitcoin. Analysts say that Bitcoin’s role in traditional financial markets is growing rapidly, thanks to the increasing purchases of spot market Bitcoin exchange-traded funds (ETFs) and companies like MicroStrategy . However, this development can make the altcoin market complex and unpredictable. According to analysts, this altcoin season will be like no other. Here are the details…
Bitcoin and the Impact of Traditional Finance
Analyst Ki Young Ju said that Bitcoin has entered the radar of traditional finance. He also stated that this situation has led to major changes in the crypto ecosystem. The experienced name said the following about the altcoin season:
This alt season will not be what you expect. It will be challenging and extraordinary. Only a select few will win this game. Bitcoin is now creating its own layer-2 ecosystem.
Thanks to this structure, Bitcoin bridges traditional markets through ETFs and funds. However, this limits the flow of liquidity to altcoins. This shows that the altcoin market is moving more independently than before. The analyst continued his explanations as follows:
Bitcoin is now moving away from the crypto ecosystem and its connection with altcoins is weakening in the process.
Bitcoin and Altcoin Season Correlation
There was once a strong correlation between the price movements of Bitcoin and altcoins. However, the analyst states that this correlation has weakened and only a few altcoins have started to show independent trends. A chart shared by the analyst shows that the price correlation between Bitcoin and altcoins has decreased significantly, and he says:
Altcoins used to move together based on Bitcoin’s movements, but this pattern has now been broken. Only a few altcoins that are attracting new liquidity have independent trends. This requires investors to be more strategic with their altcoin selection.
Bitcoin spot ETFs have accumulated an amount of BTC equivalent to the amount that Satoshi Nakamoto is estimated to have mined early in the crypto’s history. This shows how popular Bitcoin is among institutional investors. The analyst explained his views on the subject as follows:
Bitcoin spot ETFs hold as much BTC as Satoshi Nakamoto (Patoshi) mined.
Confidence in Bitcoin is Growing
The analyst emphasizes that demand for ETF products is strong, similar to the first approval period earlier in the year. This trend indicates that institutional investors are gaining confidence in Bitcoin and is a significant contributor to market growth.
Demand for Bitcoin ETFs is as strong as when they were first approved.
As a result, Bitcoin’s interaction with traditional finance shows that a new era has begun in the crypto market. However, this process necessitates the development of new strategies for altcoin investors. As we have reported at Kriptokoin.com, cryptocurrency markets are volatile. They are also risky investment vehicles. Therefore, it is important to do your own analysis before investing.
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