Altcoins
Top analysts explain why most altcoins fail and lose 99% of their value
Analyst Lark Davis recently explained that evaluating altcoins begins with understanding their simplicity. In a new analysis video, you stated that while some altcoins have easy-to-digest summaries, most do not. The newer a token is, the more difficult it will be to package and evaluate, resulting in higher risks. These altcoins can rise in bull markets, but they can also fall dramatically when market sentiment changes, sometimes losing up to 99% of their value.
He said it is important to classify altcoins to identify promising ones. The term “altcoin” is broad, so it makes sense to break it down into subcategories.
Debate on Ethereum
Starting with Ethereum (ETH), there is debate as to whether it is still considered an altcoin. Bitcoin maximalists argue that it is, others believe that it is too significant to be classified as an altcoin, suggesting that it is an asset class in its own right, especially with the advent of Ethereum spot ETFs.
Emerging projects
In addition to Ethereum, major top-level alternative blockchains such as Solana, Avalanche, and Cardano dominate the top rankings, often appearing in the top 10-15 cryptocurrencies by market capitalization. Newcomers like Tonchain are also making notable progress. He said these projects are generally volatile but offer long-term growth potential.
Ethereum Layer-2 expansion
Additionally, Ethereum’s layer-2 ecosystem is expanding with networks like Arbitrum and Base, and even layer-3 solutions built on top of these layer-2 platforms, like Arbitrum’s Orbit and Degen on Base chains. This complexity adds to the diversity of the altcoin market.
Utility projects make up another crucial category, including oracles, AI coins, real-world asset coins, decentralized exchange tokens, and gaming tokens. These altcoins vary significantly in market capitalization and utility, often experiencing extreme price swings over short periods.
Meme coins
At the more volatile and risky end of the spectrum lies a continuous influx of new meme coins. While many of these are highly speculative and short-lived, some manage to establish themselves as long-term assets. Dogecoin, the original meme coin launched in 2013, is a great example. It has become a staple in the cryptocurrency landscape, proving that even meme coins can achieve lasting success.