After consolidating for a number of days as Bitcoin pushed past $10,000 and $11,000 last week, the altcoin boom is back in full swing.
A brief glance at CryptoSlate’s market leaderboard shows that many small-cap and medium-cap altcoins are decisively in the green, posting gains of literally dozens of percent.
Band Protocol (BAND) is up another 30 percent in the past 24 hours after already rallying 100 percent in the last week. Chainlink (LINK) has gained 20 percent in the past 24 hours, surging to a new all-time high above $14. And many other altcoins are registering gains similarly as impressive.
With this latest pump, there have been cries that an “altseason” or “altcoin season” has finally arrived.
But according to one cryptocurrency trader, it may be time for major cryptocurrencies such as Bitcoin and Ethereum to rally, not altcoins.
Ready for the next leg higher in Bitcoin and Ethereum?
It’s apparent that a secondary DeFi craze is forming with tokens like Chainlink, Band, and countless other small-caps gaining literally dozens of percent in a single trading session. But according to Qiao Wang, a former head of product at Messari, these gains may eventually materialize in Bitcoin, Ethereum, and “major” altcoins.
“After a pretty ridiculous breakout in the DeFi sector and making it to mainstream media, get ready for the next leg up in the majors. The retail and dumb institutional psychology is that the majors are decent proxies for the individual sectors. An ‘index play’.”
The cryptocurrency trader added that he expects for the risk-taking sentiment of investors to persist until the election, meaning Bitcoin and other cryptocurrencies should continue their uptrend.
In discussing how “major” cryptocurrencies stand to benefit from the ongoing altcoin rally, Wang is discussing how retail investors that are entering the space will lack the knowledge or time to invest in small-cap altcoins, and will instead buy “easy” cryptocurrencies to get like Bitcoin and Ethereum.
Ethereum first, then BTC?
There are some analysts that expect Ethereum to outperform Bitcoin, even though the two assets have long been tightly correlated.
In a recent video update published on Aug. 7, Raoul Pal, the CEO of Real Vision, said that he thinks Ethereum “looks better” than Bitcoin in the short term.
The former Goldman Sachs executive added, though, that in the long run, no trade looks good relative to Bitcoin.
Pal has shared sentiment in the past indicating that the financial system or fiat economies could begin to collapse in this ongoing recession. He thinks that an economy based around Bitcoin, Ethereum, DeFi, and other cryptocurrency concepts could be formed in the wake of this crisis.