Bitcoin [BTC] and altcoin rise in 2017 had all the characteristics of a bubble as there was a lot of frenzy and FOMO in the market. There were more than 800 ICOs released in 2017 alone. Altcoin Developing team included a strong marketing and brand building budget to participate in the FOMO. The Exchanges were also charging hefty fees for listing new altcoins.
This was remarkably similar to the dot com bubble when all firms were increasing their valuation and stock price by moving on the internet. The FOMO was created by the fact that everyone will be running online to conduct all kinds of business. While the predictions were right, not all companies benefited from the event. Only some of them did; FAANG (Facebook, Apple, Amazon, Netflix, and Google) are top currently ruling the internet space.
Broadcast, Geocities, Napster, Orkut, and Myspace were some of the popular websites during the time which went from boom-to-bust after the bubble burst. On the other hand, companies like Amazon grew exuberantly at new all-time highs.
The cryptocurrency bubble has also shown similar characteristics in a shorter time frame. Bitcoin’s rise has been unprecedented while a majority of altcoin traders are abandoning ship. The altcoins traders are calling for a reversal and surges that mimic the increase in 2017. However, Peter Brandt, a chart analyst, and trader said in a tweet,
“Many altcoins benefited from the last bull run in $ Cryptomaniancs expect alts to do so again – they may be very disappointed
2000 .com bubble is analog Following 2001-02 tech collapse, dotcoms with real value exploded The “alt” .coms went bankrupt”
However, there are some proponents of altcoins that believe that a similar altcoin rise will follow Bitcoin’s rise. Crypto-analyst who goes by the pen name, MoonOverLord replied to Peter saying,
The dotcom bubble didn’t pop 5 different times every other year.
Ethereum traders tried to maintain parity with Bitcoin [BTC]. However, the rise was less than half of Bitcoin’s surge even then. Monero [XMR], Binance [BNB] Coin, Litecoin [LTC] are some of the other top cryptocurrencies which maintained comparatively higher parity Bitcoin. Some of the altcoins have taken losses of more than 35% since last month.
Furthermore, while the top-ranked cryptocurrency stands a higher chance of becoming successful, it is still no guarantee of their survival. Yahoo is one of the most prominent examples; it was gaining massive momentum during the early 2000s performing better than even Google. Nevertheless, it failed after reaching an all-time high in 2005.
The rising dominance of stablecoins has also affected the utility of altcoins in payments due to reduced volatility. The success of altcoins will strongly depend on the development and partnerships it draws during this phase.