The altcoin market, which includes smaller cryptocurrencies, might be presenting new investment opportunities after a rough few months. Since Bitcoin reached a new high earlier this year, many altcoins have seen significant declines.
Jamie Coutts, a crypto analyst at RealVision, noted on June 13 that smaller cryptocurrencies have been hit hard since Bitcoin peaked in March. Bitcoin itself reached a high of $73,679 on March 13 but has since dropped nearly 6% to around $67,126.
Coutts believes the market is going through a regular mid-cycle correction. If this is true, it could mean there are good buying opportunities in mid and small-cap cryptocurrencies once things settle down. Data from Bitformance shows that in the last three months, an index that gives equal weight to the top 200 cryptocurrencies fell over 30% compared to an index that weights them by market cap. This shows that smaller cryptocurrencies have performed worse than larger ones.
Meanwhile, Bitcoin and Ether have only dropped 11% and 5% respectively in the same period. Metaverse-related tokens, which include digital assets for virtual worlds, have been hit the hardest, with returns down 44% over the past three months. Smaller metaverse tokens like The Sandbox and Decentraland have also seen declines of over 15% in the past week.
Despite the downturn, interest from big investors is growing. On June 6, Franklin Templeton announced it is looking into a new crypto fund for institutional investors, focusing on altcoins. Although they didn’t specify which altcoins will be included, they recently praised the Solana network.
As the market looks to stabilize, this could be a good time for investors to consider smaller cryptocurrencies that have seen significant price drops.
