Coin Metrics: No New All-Time Highs for Altcoins Signal Market Maturity

Bitcoin is consolidating at the cusp of a new all-time high, but for the vast majority of popular altcoins price records remain well behind. Coin Metrics analysts see this as a healthy state of the cryptocurrency market, with no signs of a ‘bubble’.

In this week’s State of the Network @natemaddrey analyzes the case for bitcoin as a hedge against inflation.

Check it out here: https://t.co/Q4BnAheEYW

— CoinMetrics.io (@coinmetrics) December 15, 2020

Experts presented a chart showing XRP, Bitcoin Cash, Cardano and EOS down 85-93% from their ATH. Ethereum’s price is 41% below its early-2018 peak. Alongside Bitcoin, only Chainlink and Binance Coin recently set new records.

Data: Coin Metrics.

Analysts say this divergence indicates that market participants have become better at reading on-chain metrics. Investors are concentrating buying activity in assets with stronger fundamentals.

Analysts believe the current situation differs from what was seen three years ago, when market efficiency was significantly lower. Its improvement was driven, in particular, by the emergence of the ability to open short positions on other cryptocurrencies besides Bitcoin and Ethereum.

“And while bubbles may ultimately be destructive, they are very effective at attracting newcomers to the industry, and also spur the creation of critically important infrastructure for scaling the sector,” the researchers said.

Many investors who previously faced large losses have not returned to the market. Analysts say this explains the current ‘muted’ retail demand.

Earlier, Coin Metrics co-founder Nick Carter explained that the rally in Bitcoin’s price was driven by fiat currency inflation and the development of institutional infrastructure.

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