On Capitol Hill, it’s often said that “it’s always Infrastructure Week” – a phrase implying politicians know that infrastructure spending is often to the liking of their constituents. In the world of cryptocurrency it sure feels as though as it’s always altcoin season.
However, in recent months, perhaps longer, there’s been little evidence to suggest a legitimate altcoin season is materializing. It sounds counterintuitive, but that could be good reason for investors to evaluate the CoinShares Altcoins ETF (DIME).
As its name implies, that newly minted ETF provides exposure to altcoins. Specifically, DIME’s roster is comprised of higher tier altcoins excluding Ethereum. Not surprisingly, the fund will also eschew holdings in Bitcoin and stablecoins. In other words, DIME has the right ingredients with which to participate in an altcoin resurgence with the added benefit of alleviating the burden of selecting individual digital currencies.
Altcoins in DIME Could Be Rewarding
By providing investors with a basket of altcoins, DIME’s methodology is potentially valuable to crypto investors for multiple reasons. Those include the point that no one knows exactly when a new altcoin season will arrive. Additionally, when those scenarios do materialize, history indicates they often occur in rapid fashion.
“Looking back at 2017, the BTC.D chart shows Bitcoin’s dominance falling very quickly from around 96% in early March to about 60% by mid-May. That drop was the playout of one of the most aggressive altcoin rallies the market has ever seen,” reported Scott Matherson for Bitcoinist.
Investors considering DIME may take heart in knowing that the speed with which the 2017 altcoin season came to life isn’t a one-off example. Another rapid move into altcoin dominance materialized five years ago.
“A similar pattern played out in 2021, when BTC dominance fell from about 60% in early April to near 40% by mid-May. That move coincided with another powerful altcoin expansion, pushing Ethereum and several other major altcoins to new all-time highs. Many of those peaks, particularly among meme coins such as Dogecoin and Shiba Inu, are unbroken to this day,” added Bitcoinist.
It’s also worth noting that both of those moves were preceded by Bitcoin dominance waning. In 2017, the Bitcoin Dominance Index plunged from 96% to 60% in about two and a half months. Four years later, it tumbled to 40% from 60% in less than two months. It currently resides around 60%. Bottom line: DIME doesn’t own Bitcoin, but the largest cryptocurrency could provide clues about the ETF’s near-term outlook.
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