Early Crypto Angel Investor Issues Warning to Bitcoin Maximalists
At the end of 2017 and the height of the crypto hype bubble, investors seeking the next Bitcoin bought up altcoins en masse after learning that many alts, such as Etheruem, Ripple, and Litecoin, had spiked over 1000% and outperformed even Bitcoin.
But the bubble popped, both Bitcoin and altcoins fell over 85% to lows most never saw coming, leaving investors with heavy bags. In 2019, Bitcoin has risen steadily while altcoins have suffered and its caused a new wave of BTC maximalists. However, one analyst cautions that this is not the wisest practice, and could cause crypto investors to miss out on a diamond in the rough.
Altcoin Capitulation and Safe-Haven Narrative Has Created New Wave of Bitcoin Maximalists
Capitulation, fear, and despair have permeated throughout the altcoin market throughout the second half of 2019 thus far, even since the asset class diverged from the usual correlation with Bitcoin, and bled out relative to their BTC ratios.
The leading crypto-asset’s parabolic rally seems to have sucked the life and capital out of the altcoin market, and the sentiment is at the point of extreme fear and panic. Its caused even the biggest altcoin supporters to consider turning into a BTC maximalist at an alarming rate.
Bitcoin maximalists believe that only Bitcoin will survive as a financial technology and that there isnt a reason for most altcoins in the market to exist at all. Most are anti-altcoins, while others just prefer to avoid them at all costs.
Related Reading | Crypto Investors Believe Theres More Pain Ahead For the Altcoin Market
Early crypto investor Arianna Simpson, however, says that being a BTC maximalist is a foolish decision.
1/ The general crypto narrative seems to be drifting back to bitcoin maximalism, so I wanted to share a few thoughts on bitcoin relative to the rest of the crypto market:— Arianna Simpson (@AriannaSimpson) August 21, 2019
The founder and managing director of Autonomous Partners says that while Bitcoin may have outperformed altcoins year-to-date, crypto investors shouldnt assume this will always be the case.
9/ So in sum, I believe claims that "alts are dead" and bitcoin alone will make it are nonsensical. I am most definitely long BTC. But call me after you've tried deploying an app on bitcoin versus ethereum -- alternative chains might not seem so useless after all! ?— Arianna Simpson (@AriannaSimpson) August 21, 2019
Simpson reminds the crypto community of the hive mind recency bias, and the fact that there was once a time where Bitcoin was old news and Ethereum outperformed Bitcoin by a wide margin.
“…Given the numerous high caliber of teams who are building crypto networks, I think it is incredibly unlikely that over a period of several years the entire rest of the market amounts to nothing,” Simpson explained.
Bitcoin maximalism isn’t just so prominent suddenly due to altcoins capitulating, it’s also due to Bitcoin’s recent narrative change from a store of value, to a safe-haven asset in the face of growing economic turmoil. With the stock market and others crashing due to a fear-driven sell-off, investors are likely even more averse to the added risk that altcoins carry. Bitcoin, while also a volatile cryptocurrency, is the least risky of the bunch, given its network growth, acceptance from regulators, and longevity in the marketplace. The reduced risk perception makes Bitcoin the logical choice for crypto investors scorn by past bear pressure and fearful of what might happen to the asset class if the economy does collapse.
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