A prominent cryptocurrencycurrency analyst is warning investors to steer clear of overhyped altcoin ventures as Bitcoin’s price soars to fresh all-time highs above $70,170.
The recent cryptocurrencycurrency boom, according to Bitwise Asset Management’s chief investment officer Matt Hougan, is creating a “wealth effect” that is artificially inflating the values of numerous cryptocurrencycurrencies.
“Take caution when venturing outside. In jubilant bull markets, a lot of bad ventures receive funding, and many of them are already selling at absurd valuations, according to Hougan.
He says that when Bitcoin investors make money, they are shifting their funds to more volatile altcoin investments, which is increasing demand and prices in the larger cryptocurrency market. Hougan refers to this occurrence as “alt season.”
He stated, “Crypto natives get rich off of Bitcoin, feel wealthy, and then hunt for more risky assets to invest in.”
Hougan warns, meanwhile, that an altcoin’s price spike does not necessarily indicate that the project is healthy at its core or “deserves” of its high valuation.
During bull market frenzy, the analyst advises attentively examining cryptocurrencycurrency prices. The current alt season is being sparked by Bitcoin’s $1 trillion market cap growth, however not all tokens’ price increases are warranted.
