TLDR:
– Profit-seeking venture capitalists introduce significant sell pressure that damages the long-term price action of newly-launched cryptocurrencies.
– The current token launch trend with high fully diluted valuation promises big airdrop allocations for early adopters but comes with large unlocking schedules for early VC investors.
Article Summary:
Profit-seeking venture capitalists are detrimental to the long-term sustainability and price action of newly-launched cryptocurrencies, according to popular crypto analyst Route 2 FI. Despite bringing new liquidity, VCs introduce significant sell pressure that damages the token’s long-term price action. The high fully diluted valuation of these tokens leads to a large unlocking schedule for early VC investors, causing a price decrease for most new tokens. This lack of demand from crypto investors to cover the large increase in circulating supply and selling pressure may lead to a downward spiral and bearish sentiment among the community.
Altcoins, excluding Bitcoin, had a total market capitalization of $1.05 trillion, up 38% year-to-date. The analyst predicts a shift in altcoin season trends with over 300 decent projects in the market, questioning the sustainability of the altseason trend. The market dynamics might change with the lack of liquidity for all top altcoins to rise together, potentially leading to a forever PvP fight without mass institutional or retail investor involvement.
