Altcoin breakout coming? Kraken's chief economist says investors are still waiting for a catalyst
By: thestreet|2025/05/09 09:15:01
0
Share
Bitcoin is, at least historically, a cyclical asset. These cycles revolve around the ‘halving,’ where rewards for mining Bitcoin are cut in half, decreasing the supply of new Bitcoin available to investors. A huge aspect of previous cycles has been the rotation of capital from Bitcoin to altcoins. In the most recent cycle, decentralized finance (DeFi) experienced a massive boom, called DeFi summer. NFTs also became incredibly popular, with thousands being minted each day on a variety of platforms. The last halving was in April of 2024, and Bitcoin has since risen over 70%. Altcoins have significantly underperformed during this time; Ethereum is down over 30%, Solana has only increased by 25%, and Dogecoin has risen by about 30%, according to Kraken’s price feed. Thomas Perfumo, Chief Economist at Kraken, spoke with TheStreet Roundtable’s Scott Melker about the altcoin market’s outlook in 2025. He believes that the catalyst for the altcoin market has still not happened, and remains optimistic.Market uncertainty has pushed people to de-riskThis Bitcoin cycle is unique in a lot of ways. The biggest reason for that is the government’s attitude towards digital assets has changed drastically under President Trump. He paused investigations, launched his own crypto projects, and directed his administration to craft clear and unburdensome regulations for the industry.Simultaneously, he has created uncertainty in the markets with his tariff policies, which seem to change daily. As Perfumo points out, this discourages investments in high-risk assets.“I think (Bitcoin dominance) is more of a reaction to the short-term environment. (In the current macroeconomic environment) risk on is just not the thing to do. And so people are hunkering down back into Bitcoin.”Bitcoin’s advantages in an uncertain marketBitcoin has multiple advantages to altcoins in this respect. One is that Bitcoin has “been viewed as a commodity for quite a while. There wasn't really ever the threat that it might be viewed as a security.”Another factor is the institutional involvement now present in the Bitcoin network. “Bitcoin has an additional advantage, which is that it has the tie to the traditional capital markets in the form of vehicles like the Bitcoin ETFs and also large demand purchasers like MicroStrategy that has bought,” Perfumo explained.“I believe it's over $8 billion worth of spot Bitcoin year-to-date loan. And so that to me is more of an indication or a reason why you're seeing Bitcoin outperform so much compared to the altcoins,” he added.While altcoins have yet to run this cycle due to various market conditions, there is still so much potential and exciting projects being built. Eventually, those who want to take on more risk will turn their eyes back to digital assets outside of Bitcoin.
You may also like

From "Kimchi Premium" to Bithumb's Rectification: An Interpretation of the Current Situation in the South Korean Crypto Market
Market structure or information gap? — Why does the South Korean crypto market often make global traders "lag behind."

How to Automate Your Workflow with AI (No Code Required)
Let Perplexity Do the Work for You

Conversation with Pantera Founder: Bitcoin Has Reached Escape Velocity, Traditional Assets Are Being Left Behind
BTC still needs 6-8 months to reach its bottom.

Is it still worth buying Circle on the callback?
Can Circle transform from a "stablecoin company that earns interest" into a global digital dollar infrastructure?

BIT Launches Landmark "Same Name Virtual Account" Feature: Ushering in a New Era of OTC Trading that is Convenient, Efficient, and Compliant
This marks a milestone for BIT in optimizing the large-scale fiat onramp channel and enhancing the asset allocation experience for high-net-worth individuals and institutional clients.

Further Oracle Integration Reveals Polymarket's Ambitions
The expansion of the data source is essentially an expansion of the market radius.

CoinGlass: 2026 Q1 Cryptocurrency Market Share Research Report
In the first quarter of 2026, the overall cryptocurrency market remained highly active, but trading volume gradually declined from the January peak.

Tiger Research: Analysis of the Current Situation of Retail Investors in Nine Major Asian Markets
We analyzed the entry barriers of the largest markets for nine potential user groups in Asia, as well as the responses of exchanges.

Forbes: Does quantum technology threaten the encryption industry? But it is more likely an opportunity
Quantum computing will not overturn blockchain, but it will force a reconstruction of its security system.

What Is Auto Earn? How To Claim Extra Free Crypto On Auto Earn 2026
What is Auto Earn and how do you use it? This guide explains how Auto Earn works and how balance increases and referrals may qualify for extra rewards during Auto Earn Boost Fest.

Auto Earn Compared 2026: Which Exchange Gives The Most Extra Bonus?
What is Auto Earn in crypto? Compare Kraken, OKX, Bybit, Binance, and WEEX Auto Earn features in 2026 and see which platforms provide additional promotional rewards beyond standard yield mechanisms.

Nearly $300M Targeting U.S. Midterm Elections, Tether Exec Leads Crypto Industry's Second-Largest Political Fund
In the crucial window of legislative bargaining, using political contributions to advance industry interests.

Anthropic's Triple Moment: Code Leak, Government Standoff, and Weaponization
When AI is both the attacker and the defender, can cybersecurity still hold up?

OpenAI and Anthropic both announced acquisitions on the same day, causing dual IPO anxiety.
The two companies have a valuation difference of more than two times, but they are vying for the same pool of investors' money.

Forbes: Quantum Technology Threatens the Crypto Industry? But It's More Likely an Opportunity
Quantum computing will not upend blockchain, but it will force its security to be restructured.

Rhythm X Zhihu Hong Kong Event Recruitment Skills, Register Now for a Chance to Showcase Live
On April 21, if you are also in Hong Kong, you will have the opportunity to showcase your skills live.
CLARITY Act 2026 Update: Stablecoin Yield Ban, Senate Compromise, and What It Means for Crypto Markets
The CLARITY Act may reshape stablecoin yield rules, DeFi incentives, and crypto liquidity in 2026. Learn the latest Senate updates, timeline changes, and what the regulation could mean for crypto traders.

Bitcoin mining companies flee for the Nth time
When mining no longer generates sufficient economic returns, the rational business decision is naturally to shift resources; however, if this trend continues to spread, the question of who will bear the long-term costs of maintaining the security of the Bitcoin network will become a problem that mus...
From "Kimchi Premium" to Bithumb's Rectification: An Interpretation of the Current Situation in the South Korean Crypto Market
Market structure or information gap? — Why does the South Korean crypto market often make global traders "lag behind."
How to Automate Your Workflow with AI (No Code Required)
Let Perplexity Do the Work for You
Conversation with Pantera Founder: Bitcoin Has Reached Escape Velocity, Traditional Assets Are Being Left Behind
BTC still needs 6-8 months to reach its bottom.
Is it still worth buying Circle on the callback?
Can Circle transform from a "stablecoin company that earns interest" into a global digital dollar infrastructure?
BIT Launches Landmark "Same Name Virtual Account" Feature: Ushering in a New Era of OTC Trading that is Convenient, Efficient, and Compliant
This marks a milestone for BIT in optimizing the large-scale fiat onramp channel and enhancing the asset allocation experience for high-net-worth individuals and institutional clients.
Further Oracle Integration Reveals Polymarket's Ambitions
The expansion of the data source is essentially an expansion of the market radius.
