New Report: Bybit’s Post-Hack Liquidity Comeback
Bitcoin rallies have historically fueled altcoin seasons, during which investors rotate profits into altcoins, driving broad crypto market gains. However, even if Bitcoin hits multiple all-time highs in 2024, many altcoins haven’t reached their 2021/22 peaks. Instead, altcoin trading activity has been increasingly concentrated within a few tokens. This report examines altcoin volume and liquidity trends during recent rallies, exploring some of the factors shaping capital allocation and what a potential altseason might look like, given the broader context.
Part 1: Altcoin Performance: A Mixed Bag
Part 2: Altcoin Market Concentration
Part 3: Factors Shaping Capital Allocation
RESEARCH BY:
POWERED WITH DATA BY:
Pt. 1:Altcoin Performance: A Mixed bag
Altcoin performance has been a mixed bag following the U.S. elections. While Bitcoin hit new all-time highs in November, many tokens remained below their 2021–2022 peaks or March 2024 levels.
→Large caps like SOL and XRP surged.
→Mid and small caps experienced uneven results.
Pt. 2: Altcoin Market Concentration
A key difference between the 2021/2022 bull run and the recent rise of crypto assets is the increasing liquidity concentration among a few assets. Altcoin trade volume has returned to pre-FTX levels, but it is more concentrated than ever.
→The top 10 altcoins account for 64% of the total volume, indicating that investors are focusing capital on a select group.
→ Market depth mirrors this trend, with the top 10 comprising over 60% of the 1% depth. This concentration notably accelerated after the U.S. elections.
Pt. 3: Factors influencing capital allocation
Regulation is emerging as a key factor in determining where capital is allocated in crypto markets. The U.S. elections have fueled optimism, with the SEC dropping lawsuits and repealing restrictive rules (SAB 121). U.S. -based projects, tracked by Kaiko’s EAGLE Index (EGLX), have outperformed Bitcoin post-election, reflecting investor confidence.
Rising interest rates have also fundamentally altered capital allocation, setting the 2024 rally apart from the liquidity-driven 2021/2022 bull run.
