‘90% of Altcoins Won’t Survive’ is a False Narrative.
“Most altcoins won’t make it in the long run” is a widely held belief held by the Bitcoin community, especially among the Bitcoin Maximalists. While I understand why that opinion makes sense in theory, (most altcoin projects have no real utility, have no traction, and don’t solve important problems) it seemingly ignores one simple truth about the industry as it stands today.
There is a tsunami of capital coming for this industry.
So what? Who cares if there’s tons of capital coming, won’t those funds be allocated to projects that have utility, traction, and solve big problems with large addressable markets? Sure, a lot of it will. But the universal truth of “high risk equals high reward” means that investors will look for small cap projects to invest in, even if it’s a small percentage of their portfolio. That means small cap altcoins would likely 2–10x rather quickly, which changes the trajectory of the project dramatically.
Using Shib as an example, back in April of 2021, a single Shib cost $0.000000008, which a nonexistent market cap. Touted as the “Doge killer” this project seemed nothing more than a project looking to capitalize on the memecoin mania, but as the money flowed in, it opened a world of possibilities for the coin. Now, Shib has a metaverse, they are accepted at AMC, and more that 37 trillion Shib are staked on their decentralized exchange, known as Shibaswap.
Shib is a higher profile coin that went from rags to riches, but there is no shortage of examples of coins that had little to no market cap, and no utility (yet) that pumped massively during altseason. While these projects have come back down to earth, they still hold a market cap far beyond what they previously had, which gives them the opportunities that were not possible before. As long as the capital continues to flow in, these smaller projects will grow massively, make the developers rich, and keep even the most ridiculous projects alive.
That doesn’t mean many projects won’t fail, I believe far more will survive than most Bitcoin and Crypto enthusiasts do.