We saw in a previous article that Bitcoin is particularly vulnerable to the fall of the Nasdaq. We will see if this correlation holds true when it comes to Altcoins. At first glance, we see that the fall of altcoins is lower than that of the two major cryptos. Indeed, when Bitcoin falls by 32% over one week, we can see that Cardano only loses 18%. The Ripple drops only 17% and the Solana less than 15%.
Lower correlation between investment funds and altcoins
Even if the trend is the same, this lower correlation between cryptocurrencies and NASDAQ technology stocks is explained by the lesser presence of traditional investment funds on altcoins. Indeed, even if the giants of global finance launched themselves into the crypto sector about a year ago, they favored investment in Bitcoin and Ethereum, currencies deemed to be safer.
So when these financial juggernauts make arbitrages in their portfolios by selling their assets in cryptocurrenciesthe impact is therefore more violent where they are present than where they are absent.
Cryptos still remain victims of inflation
Thus, even if the altcoins are rather held by people who have confidence in the ported project. There is less speculation than on the Bitcoin and Ethereum. But, these cryptocurrencies still remain victims of inflation. Investors find these currencies less attractive. Because they do not, strictly speaking, constitute a store of value. Thus, this week’s decline is mainly explained by the individual arbitrages of the altcoin investors who just want to review their savings.
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In other words, it is recommended for those who do not need liquidity to hold their positions in altcoins. Even to reinforce them for the most daring…