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Crypto market outlook: Altcoin surge by Reddit traders looks frothy – Markets Insider

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Retail investors have been buying stocks at a record pace over the summer, helping push markets to record highs, according to a Wednesday note from JPMorgan.
The bank estimates that retail investor net flow into US stocks hit a record high of almost $16 billion in July, and stood at about $13 billion in August. The previous record was $10 billion last June, JPMorgan highlighted.
That buying frenzy in stocks also spilled over into “altcoins” in August, as investors piled into non-fungible tokens. The surge in NFTs and DeFi activity has helped not only ethereum, but also cryptocurrencies that facilitate smart contracts such as Solana, Binance Coin, and Cardano to soar.
On Thursday, Cardano soared to a record high above $3, bringing its year-to-date gains to more than 1,600%. Meanwhile, Solana is up more than 7,000% year-to-date as of Thursday, according to data from Coinmarketcap.
“Cryptocurrency markets [are] looking frothy again,” JPMorgan said. The bank noted that altcoins now represent about 33% of the cryptocurrency market, a big surge from its 22% reading in early August.
The recent surge in altcoins’ share of the cryptocurrency market doesn’t eclipse the surge earlier this year when its share rose to 37.6% in May from 13% in January. The record high for altcoins share of the cryptocurrency market was 55% seen in January of 2018, as bitcoin began to crater from its $20,000 record high.
“The share of altcoins looks rather elevated by historical standards and in our opinion it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend,” JPMorgan concluded.
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An Open Source activist, who pursues his passion for tech blogging. In early years of his life, he worked as market analyst for a number of companies. Martin has been writing reviews and articles for a local magazine for last five years.