THE crypto trading market is often divided into two main constituents: Bitcoin and so-called altcoins, which covers more or less every other token.
The total market value of both categories, over years of boom and bust, have mostly moved in lockstep.
This time it is different. Bitcoin’s rising popularity among institutions, together with a speculative shift to crypto-linked stocks such as listed vehicles that hoard tokens, have opened up a near trillion dollar gap between altcoins and the largest digital asset.
And it is retail investors that are missing out, according to a new report by 10x Research.
“Altcoin’s market capitalisation would be roughly US$800 billion higher if retail investors – especially in South Korea – hadn’t redirected their attention toward crypto-related stocks and other equities,” said Markus Thielen, CEO and head of research at 10x Research. In this cycle, he added that “altcoins have failed to attract sufficient new capital”.
Historically, South Korea’s crypto traders have shown a proclivity for altcoins, which in the past have accounted for more than 80 per cent of total trading activity on local exchanges. That is a stark contrast to global platforms, where Bitcoin and Ether together make up 50 per cent or more of overall volumes.
In 2024, from Nov 5 through Nov 28, the daily average trading on Korean crypto exchanges amounted to about US$9.4 billion, versus US$7 billion for the Kospi, according to data from CCData and Korea Exchange. Since then, volumes have collapsed, according to 10x Research.
Diminished appetite among Korea’s traders is a key factor in altcoins’ underperformance, 10x said, and it could presage further declines.
A sharp recent selloff in crypto markets sparked by escalating US-China trade tensions sent both Bitcoin and altcoins spiraling, but altcoins were hit hardest on a relative basis. Of the US$380 billion erased, about US$131 billion was concentrated in altcoins, 10x said at the time.
For altcoins, the shift in attention to Bitcoin and crypto stocks represents a “structural shift”, according to the 10x report – a deficit that appears unlikely to be made up any time soon. BLOOMBERG
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