Hard Way to Make An Easy Living: Profiting in A New Altcoin World

In April 2011, a significant event known as “Black Friday” took place in the world of online poker. This was when the U.S. government closed down major poker sites and froze all assets immediately, including player funds. This sudden move halted the regular flow of US-based newcomers, making the largest market for poker more competitive overnight. Simultaneously, the global pool of players began to sharpen their skills as they faced a more challenging environment.

Initially, players refined their tactics using tracking programs to scrutinize both opponents and personal gameplay. Over time, sophisticated “poker solver” applications, which help humans learn optimal game theory strategies, gained widespread use. Later, online platforms started providing reduced returns, or rakeback, for player participation fees. As poker grew more analytical with the advent of advanced software tools, artificial intelligence bots emerged to further reduce the potential profit in virtual card games.

Looking at the current altcoin trading scene, it feels like old habits are resurfacing, as I perceive the challenges becoming more intense, reminiscent of a past experience, albeit slightly altered.

How Altcoin Trading In Changing

In the spirit of the familiar phrase, “A million ways exist to earn a million dollars,” when it comes to altcoin trading, there are numerous paths to consider for significant profits. These include scalping, swing trading, yield farming, airdrop hunting, and new-launch sniping, among others. However, each method becomes increasingly challenging due to two primary reasons:

Modest capital inflows

Stablecoin market cap can be used as a measure of money flowing into the crypto markets. It is not a perfect measure, but it is useful. Stablecoin market cap currently sits at $178 billion, still a bit shy of all-time high levels of $188 billion. In over two years, stablecoin supply has essentially just recovered to these levels after a major downtrend (although it has made a new all-time high when excluding non-algorithmic stablecoins).

In 2022, Terra’s UST, the well-known algorithmic stablecoin, held an impressive $18.7 billion market value and fueled the intense bullish sentiment that made investing in altcoins quite profitable. However, these days, fiat-backed stablecoins like Stripe’s acquisition of Bridge for $1.1 billion are more often utilized for practical purposes in the real world. I find this trend exciting because I think stablecoins represent one of the most remarkable achievements in the crypto space. Yet, it also means that the growth of these stablecoins may have a less significant effect on inducing a risk-on atmosphere for altcoins.

The surge of investment into the altcoin market by both large institutions and individual investors indicates a positive outlook, though the inflow may be gradual. However, over the past two years as capital accumulated and the stablecoin market regained its value, what changes have occurred within the altcoin market?

The proliferation of altcoins

The altcoin space is seeing hundreds of thousands or sometimes millions of new token launches each month. It took two years for stablecoin supply to recover, and in the meantime, altcoin supply has been booming. A majority of crypto innovation comes out of the Ethereum ecosystem, but it has also produced over 100,000 new tokens each month, with over one million new tokens launched during the recent summer months.

Through just a few simple clicks, Pump.fun, a platform for launching memecoins, has unleashed more than 3 million brand-new memecoins into circulation this year so far.

In simpler terms, with an increasing number of alternative cryptocurrencies (altcoins) and limited investment funds moving into altcoin speculation, we’re dealing with a large pool of assets being pursued by a relatively small amount of capital. Despite Bitcoin‘s bullish trend since late 2022 and creating a favorable environment for crypto investments, many altcoins are still showing losses year-to-date. This has made the process of trading altcoins, in all its different forms, significantly harder. However, it’s important to remember that this situation isn’t entirely negative…

The Trump-Crypto Era

The proportion of the total crypto market that Bitcoin (BTC) represents increased from approximately 40% at the end of 2022 to around 60% right before Trump’s U.S. election victory last week. During previous instances when Bitcoin’s dominance surged significantly after major market downturns, such as the crash in March 2020, it tended to lose ground to alternative cryptocurrencies (altcoins) as enthusiasm swept through the market and fresh capital flowed into these assets. However, since Trump’s election win was confirmed, Bitcoin dominance has dropped slightly from 60% to 58%, with Bitcoin continuing its upward trend to surpass $80,000. Ethereum (ETH) and the broader altcoin market have shown particularly strong performance in response to the Republican sweep, as investors anticipate a more favorable regulatory environment under the new administration. While we are not yet seeing a general uptrend, there is an optimistic “red wave” surrounding this change.

If someone asked me for guidance on starting a career as an online poker player today, I’d suggest they look into other options instead – the potential earnings just aren’t what they used to be. On the other hand, while I wouldn’t recommend becoming a professional crypto trader either, there are definitely more lucrative avenues in the cryptocurrency market, despite the increasing challenges.

Cryptocurrency trading involving altcoins has become more challenging, yet there’s an emerging sense of optimism in the crypto world. We haven’t experienced the much-talked-about “alt season” as such, but we have seen numerous profitable momentum trades during the cycle – from GambleFi and AI memecoins to others. While it’s uncertain if Republicans will keep their word regarding support for the crypto industry, the very idea is already stirring excitement that could last for the next couple of months until Trump’s inauguration. During this period, altcoin traders might find themselves in a favorable window where they can unleash their speculative instincts to the fullest.

Despite Q4’s impressive progress, we must adapt to a changed environment: anticipate fewer massive returns, demonstrate flexibility and swiftness in moving through trending market stories, and be proactive with profit-taking and loss-cutting measures. Yes, it may be becoming more challenging, but there is still much potential, and it’s far superior to spending countless hours playing poker… I can assure you of that.

Important Note: While this article’s perspective is that of the writer, it may not align exactly with the opinions of CoinDesk, Inc., its proprietors, or associated entities.