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Top Reason Why Major Altcoin Season Is Not Coming

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Sun, 16/06/2024 - 18:29
Top Reason Why Major Altcoin Season Is Not Coming
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Murad Mahmudov, a prominent financial analyst, is convinced that a major altcoin season is not on the horizon due to the declining cumulative excess savings of US households. 

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According to recent data from the Federal Reserve Bank of San Francisco, Americans have now spent their savings. The massive increase in savings over a period from March 2020 to August 2021 was prompted by a huge drop in consumer spending. 

As per San Francisco Fed economists, excess savings reached their peak in August 2021, surpassing a whopping $2.1 trillion. 

Despite the fact that these savings are now mostly gone, the report suggests that a strong labor market could make it possible to maintain spending. That said, recent earnings reports from such major companies as Amazon show that consumers are becoming budget-conscious.

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Considering that Americans are now more careful about their spending compared to 2021, Mahmudov implies that they are unlikely to splurge cash on risky alternative cryptocurrencies. 

"The most you can hope for is an occasional well-timed spike by a particular flavor-of-the-month outperformer from the crypto-native PvP hot ball of money," he said.

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The analyst has also pointed to the fact that there is a supply glut of altcoins. "Altcoins are growing in both number and aggregate fully diluted market cap with each new token release," Mahmudov added. 

When comparing the current market cycle to 2017, the analyst noted that the market was much smaller back then, meaning that less capital was required to achieve significant gains. Moreover, it was much harder to create new tokens. 

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