Altcoin breakout coming? Kraken's chief economist says investors are still waiting for a catalyst

By: thestreet|2025/05/09 09:15:01
0
Share
copy
Bitcoin is, at least historically, a cyclical asset. These cycles revolve around the ‘halving,’ where rewards for mining Bitcoin are cut in half, decreasing the supply of new Bitcoin available to investors. A huge aspect of previous cycles has been the rotation of capital from Bitcoin to altcoins. In the most recent cycle, decentralized finance (DeFi) experienced a massive boom, called DeFi summer. NFTs also became incredibly popular, with thousands being minted each day on a variety of platforms. The last halving was in April of 2024, and Bitcoin has since risen over 70%. Altcoins have significantly underperformed during this time; Ethereum is down over 30%, Solana has only increased by 25%, and Dogecoin has risen by about 30%, according to Kraken’s price feed. Thomas Perfumo, Chief Economist at Kraken, spoke with TheStreet Roundtable’s Scott Melker about the altcoin market’s outlook in 2025. He believes that the catalyst for the altcoin market has still not happened, and remains optimistic.Market uncertainty has pushed people to de-riskThis Bitcoin cycle is unique in a lot of ways. The biggest reason for that is the government’s attitude towards digital assets has changed drastically under President Trump. He paused investigations, launched his own crypto projects, and directed his administration to craft clear and unburdensome regulations for the industry.Simultaneously, he has created uncertainty in the markets with his tariff policies, which seem to change daily. As Perfumo points out, this discourages investments in high-risk assets.“I think (Bitcoin dominance) is more of a reaction to the short-term environment. (In the current macroeconomic environment) risk on is just not the thing to do. And so people are hunkering down back into Bitcoin.”Bitcoin’s advantages in an uncertain marketBitcoin has multiple advantages to altcoins in this respect. One is that Bitcoin has “been viewed as a commodity for quite a while. There wasn't really ever the threat that it might be viewed as a security.”Another factor is the institutional involvement now present in the Bitcoin network. “Bitcoin has an additional advantage, which is that it has the tie to the traditional capital markets in the form of vehicles like the Bitcoin ETFs and also large demand purchasers like MicroStrategy that has bought,” Perfumo explained.“I believe it's over $8 billion worth of spot Bitcoin year-to-date loan. And so that to me is more of an indication or a reason why you're seeing Bitcoin outperform so much compared to the altcoins,” he added.While altcoins have yet to run this cycle due to various market conditions, there is still so much potential and exciting projects being built. Eventually, those who want to take on more risk will turn their eyes back to digital assets outside of Bitcoin.

You may also like

Tiger Research: What AI services do cryptocurrency companies offer?

Cryptocurrency giants like Binance and Coinbase have fully launched an AI defense battle: Driven by FOMO sentiment, leading platforms are accelerating the deep integration of AI agents into core businesses such as trading, security, and payments.

The war not only drives up oil prices but also causes Circle's stock price to soar

High interest rate expectations combined with the explosive growth of stablecoin infrastructure have led to Circle's stock price doubling in five weeks against the trend: Understanding the dual game of "macro interest rate trading" and "global payment foundation" behind the surge in one article.

When agents become consumers, who will rewrite the underlying logic of internet commerce?

Thirty years ago, due to the high cost of micropayments, the internet had no choice but to adopt an advertising model. Today, the technical threshold for micropayments is nearly zero, but trust has become the most expensive luxury. Whoever can bridge this gap will dominate the next generation of int...

AI Agents in Action Summit: March 31, Hong Kong Cyberport, focusing on the deep waters of AI implementation

Tomorrow, Hong Kong Cyberport will grandly open. The "AI Agents in Action" summit gathers top experts, directly addressing the real evolution of AI Agents from conceptual celebration to productization and large-scale commercial implementation.

29 Days In, What Are America’s Options on Iran?

The key is not in ground invasion but in the combination of striking capability and governance.

Flash Crash Down 97%+ with Ongoing Unlocking, WLD Completes $65 Million Off-chain Funding: Who Is Still Buying?

In the current deep bear market environment, being able to complete multi-million dollar token trades is quite rare.

Popular coins

Latest Crypto News

Read more