What a beautiful bounce today for the crypto market. In the last 24 hours, bitcoin has ripped higher by about 10% and is now back over $40,000. Altcoins are following (for now).
Most altcoins have gotten absolutely slaughtered lately. “Ethereum-killer” Solana (SOL) has been hacked for around $320 million, which didn’t help things.
Still, a major bounce was inevitable. The question is, will it continue?
I think the crypto bull market will become far more discriminatory from now on. For example, lower quality coins like Cardano (ADA) may continue to underperform. Cardano is down from around a $2.75 high to $1.10 today.
In my view, Cardano is still overvalued at these prices. It’s worth around $49 billion fully diluted. That may be $48 billion or so too much, in the long run.
I often write that I heavily favor bitcoin in this environment, but it bears repeating. Bitcoin was made for this environment. It’s the crypto asset for today.
Yes, altcoins are worth speculating on, and some — like Ethereum (ETH) and Cosmos (ATOM) — are worth holding indefinitely. But I think larger portfolios should be at least 70% bitcoin and probably more. If your portfolio is only a few thousand bucks, then it’s probably a better idea to go for promising altcoins. Bitcoin’s not going to grow 100x from here anytime soon, but it could go 5x over the next few years.
It’s just a much safer bet. Sure, take some longshots on altcoins — especially ones with real-world use cases and great communities. But if you’re looking for an inflation hedge with significant upside, stick to bitcoin for the most part.
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