ETF Rumors Reveal Altcoin’s Massive Profit Potential
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| By Alex Benfield |
Headlines and rumors have pushed crypto prices up and down and back around lately. But nothing has impacted the broad market as severely as this week’s fake news incident.
On Monday, news broke about the approval of the BlackRock (BLK) backed ISHARES spot Bitcoin (BTC, "A-") ETF, almost immediately sending BTC's value soaring by over 10% in just a day. However, the news was incorrect.
Turns out, an intern at Cointelegraph Xeeted the ETF lie heard around the crypto world without verifying it. And once posted, the rumor spread like wildfire, quickly getting reposted by many of the largest X accounts in crypto.
An hour later, confirmation that the news was fake came through, and crypto prices retreated.
While I’m sure many are feeling woozy after this emotional roller coaster, this swift reaction underscores the market's anticipation for a Bitcoin ETF. That’s good news for when a spot ETF is finally approved.
Bitcoin’s price retreated a bit from that high of $30,000 it hit on Monday, but not by much. It is still up about 4% since the start of that move.
And it’s that retention of gains not earned that piqued my interest. Because that tells me the potential approval of a spot ETF was not previously priced in.
That is particularly odd since there was another development that should have encouraged the price-in sooner.
Last Friday, the Securities and Exchange Commission missed its deadline to appeal the Grayscale Bitcoin Trust (GBTC) conversion application. As a reminder, Grayscale is looking to convert its trust, which currently trades at a discount to Bitcoin, into a true spot ETF.
This oversight leaves the ball in the court's court to decide what will come next in the coming week.
Given these events, it's worth pondering whether Bitcoin's potential hasn't been fully recognized yet.
And looking further afield, if it hasn’t, what does this say about altcoins, many of which are still languishing at over 90% below their peak bull market values?
As investors begin to grasp this, we could be on the cusp of a significant rally across the cryptocurrency spectrum.
That’s because, if Bitcoin is undervalued, many of the hottest altcoins of the previous bull market are as well. Meaning they still have very solid chances of making new highs in this next cycle.
We’re talking profit potential of 5x-10x just to hit the old highs.
Just take a look at Avalanche (AVAX, Not Yet Rated),for example. It’s currently trading at about $9.
But back in November 2021, at the peak of the last bull market, AVAX hit an all-time high of over $145 on Coinbase. That means its current $9 is a loss of 93% of its value from two years ago.
The Avalanche ecosystem is still used just about as much as it was in the previous cycle and AVAX should still grow in price along with the rest of the market. If AVAX even makes it halfway back to previous all-time high, it would grow by about 7x.
That’s just one example. And there’s a number of altcoins that are down to extreme lows from their all-time highs with good odds of a big bull run.
During accumulation phases like the one we’re in right now, it isn’t a bad idea to buy lottery tickets on a few of these tokens just in case they might hit a new all-time high.
Trades like this should never be the main strategy of your crypto portfolio, as they naturally come with quite a bit of risk. However, if you’re comfortable with the risk, and don’t use anything you can’t afford to lose, allocating a small percentage of your portfolio to a small alt with big potential could pay off when the bull starts running.
And if you’d like to know the one altcoin my colleague Juan Villaverde recommends you should own before heading into the next market cycle, I suggest you watch his latest video here.
Many of these tokens, still reeling from past highs, carry the promise of explosive returns. As we tread these volatile waters, diversifying one's portfolio with a sprinkle of these potential "moonshot" altcoins could be the game changer.
But remember, as with all high-reward propositions, they come with their own set of risks. Invest wisely, stay informed and always be prepared for the unpredictable nature of the crypto casino.
Best,
Alex
