When will the curtain rise on the return of the altcoin season?
Written by: Chandler, Foresight News
The price of Bitcoin has repeatedly hit new highs, breaking the $99,000 mark, which has invigorated the entire cryptocurrency market. Established altcoins are also making a comeback, with Ripple (XRP) standing out in particular. According to Bitget market data, on November 22, XRP broke through 1.4 USDT, currently quoted at 1.416 USDT, with a 24-hour increase of over 30%.
In contrast to the booming Meme market, established altcoins seem to be quietly rising. They may not attract as much attention as Meme coins, but they are steadily accumulating market interest with their stable gains.
According to Kaiko data, as of November 18, the weekly trading volume of altcoins surged to over $300 billion for the first time since 2021. Among them, the trading volumes of the four major tokens—DOGE, XRP, SOL, and PEPE—account for 60% of the total trading volume.
Since November, XRP has quietly risen from around $0.5 to a peak of $1.435, an increase of 182.4%, reaching a new high in over three years; ADA has risen from $0.33 to $0.9, with an increase of nearly 170% this month; XLM has increased from $0.09 to $0.294, with an increase of over 220%. These signs seem to indicate that established altcoins are gradually shaking off their sluggishness and reshaping their market positions with actual performance.
If this trend continues, the revival of established coins intertwined with the activity of hot tokens may lead to a broader "altcoin season" in the future.
Gary Gensler announces impending resignation, years of litigation may come to an end
The recent strong rise of XRP is underpinned by multiple intertwined factors. The change in market sentiment is undoubtedly the most direct driving force.
On July 13, 2023, when the court ruled that the sale of XRP on digital trading platforms is not considered a security, Ripple achieved a partial victory. However, the court determined that XRP sold by Ripple to institutional investors constitutes unregistered securities. Additionally, the court ruled that the personal sales of XRP by Garlinghouse and Larsen do not constitute violations. On August 7, 2023, the court made a final ruling requiring Ripple to pay a civil fine of $125.0351 million and prohibiting the company from further violating the Securities Act.
On October 3, the U.S. SEC announced that it is appealing the previous ruling by the U.S. Second Circuit Court of Appeals regarding Web3 payment company Ripple, with an SEC spokesperson stating, "The district court's ruling in the Ripple case conflicts with decades of Supreme Court precedent and securities law, and we look forward to presenting our arguments in the Second Circuit."
However, with Trump's election victory, this regulation may ease.
On November 22, according to the U.S. SEC's official website, SEC Chairman Gary Gensler will officially resign on January 20, 2025. The market has begun to anticipate changes in the future regulatory environment, with the possibility that lawsuits against companies like Ripple may soften, settle, or even be withdrawn.
Gary's long-standing harsh regulation of the crypto industry, especially towards Ripple, has kept XRP in a dual predicament of legal and market challenges. Now, signs of a potential easing of this regulatory stance provide the market with an opportunity to reassess XRP's value.
From the data perspective, according to CoinGlass data, the open interest (OI) of XRP futures contracts has approached $2.44 billion, setting a historical high. This data reflects that market speculation on XRP has reached unprecedented heights. Open interest refers to the total amount of active futures or options contracts that have not been settled, and is typically seen as an important indicator of market activity and trading enthusiasm.
Institutions rush to position for ETFs
In addition to the easing of regulations, several institutions have begun to apply for XRP ETFs.
On October 2, a spokesperson for Bitwise confirmed that Bitwise submitted an XRP ETF application, which has been officially filed on the Delaware government website. According to its S-1 registration document submitted to the U.S. SEC for its XRP ETF, the XRP custodian will primarily use cold storage to hold the trust's assets, transferring a limited amount of assets to hot storage as needed for effective basket creation and redemption.
A week later, cryptocurrency investment firm Canary Capital submitted a registration application for its XRP spot ETF "Canary XRP ETF" to the U.S. SEC. The plan is to provide investors with an investment channel that does not require direct holding of XRP, while using CME's CF Ripple Index as the price tracking benchmark. Its founder, Steven McClurg, stated that the positive changes in the regulatory environment and the demand from investors for diversified crypto assets are the main reasons driving this application.
On October 16, Grayscale Investments submitted an application to the U.S. SEC to convert its mixed crypto fund Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF). As of September 30, this fund was primarily composed of Bitcoin, accounting for 74.7%, followed by Ethereum at about 18.55%, with the remainder made up of SOL, XRP, and AVAX. The company had previously converted its Bitcoin and Ethereum funds into ETFs.
On November 2, 21Shares submitted an application for the XRP ETF "21Shares Core XRP TRUST" to the U.S. SEC.
These continuous applications indicate that XRP's market position as a crypto asset is steadily recovering, reflecting the market's confidence in XRP's future potential. Following the legal progress in Ripple's litigation with the SEC, concerns about XRP's legality have eased. Against the backdrop of Bitcoin and Ethereum ETFs being approved one after another, the wave of XRP ETF applications is undoubtedly an important signal of progress for the industry.
Is the return of altcoins hopeful?
The CMC Cryptocurrency Altcoin Season Index is a real-time indicator used to determine whether the current cryptocurrency market is in an altcoin-dominated season. This index is based on the performance of the top 100 altcoins relative to Bitcoin over the past 90 days, providing detailed charts and indicators to track market trends and the market capitalization share of altcoins.
From the chart and index data, the CMC Cryptocurrency Altcoin Season Index currently shows 27/100, indicating that the market is still primarily dominated by Bitcoin, and altcoins have not yet fully entered a strong dominant position. However, the trend of change over the past 7 days is noteworthy. The altcoin season index has gradually climbed from a low point on the 17th, significantly jumping to 28 on the 21st, indicating that market interest in altcoins is reviving.
Combining historical data, although the current index is far below the annual high of 50, it has shown a significant rebound from the low point of 13 earlier this month. This upward trend may suggest that market funds are gradually rotating from mainstream assets like Bitcoin to the altcoin sector. Especially in light of the recent strong performance of established altcoins like XRP and ADA, this trend may be further reinforced.
At the same time, the market capitalization of altcoins is also steadily growing. Although the growth rate has not yet reached a level sufficient to completely reverse the market landscape, the gradual stabilization and slight upward trend reflect subtle changes in market sentiment. Investors are beginning to reassess the value of altcoins and gradually shifting their attention to these assets.
If this trend can continue and maintain a stable upward trajectory in the coming weeks, the altcoin season may finally be on the horizon.
However, based on the performance of the Top 100 over the past 90 days, Meme coins, with their high speculation and social driving force, are still unlikely to be shaken from their market position in the short term.
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