Benzinga - by Khyathi Dalal, Benzinga Staff Writer.
Pseudonymous trader ‘Trading Vapor‘ suggested meme coins are poised to benefit the most from the upcoming alt season.
What Happened: Trading Vapor shared his observation that sentiment towards both altcoins and meme coins is bad but thinks this is misplaced. The trader examined three pivotal questions to build his case for an impending alt season:
- Is Bitcoin's (CRYPTO: BTC) cycle top in?
- If not, will new all-time highs trigger an alt season?
- If it happens, which coins will benefit the most?
The trader dismisses the notion that Bitcoin's top is already in. He points out, "There is no reason to think that this time is different," referring to the historical pattern of Bitcoin breaking past all-time highs due to structural implications, like the halving.
The alignment of bullish catalysts like upcoming Federal Reserve rate cuts, pro-crypto political stances in the U.S., ETF flows and Bitcoin ranging at previous highs all support the thesis that Bitcoin's top is not yet in.
Vapor addressed the "mass retail" factor stating that retail investors, despite past burns, are likely to come back when Bitcoin breaks past an all-time high. This is driven by greed and the pursuit of higher returns in smaller-cap altcoins.
"The argument that ‘retail won't come back' was already a thing in 2020," he states, noting its incorrectness as retail fervor returned when Bitcoin went parabolic in 2021.
Also Read: What The Ethereum ETF Means For Altcoins And Meme Coins
Bitcoin's Rally Triggering Altcoins?
Some argue that institutional ETF flows into Bitcoin and Ethereum (CRYPTO: ETH) might remain siloed, limiting wealth trickle-down to altcoins. However, Trading Vapor countered this by pointing out that every crypto bull run has historically started with Bitcoin dominance rising, followed by altcoin surges.
He notes, "Any raise in Ethereum’s price will passively pump altcoin prices due to their pricing against wETH." This wealth effect will extend through decentralized financial markets and impact altcoins positively, particularly with retail investors returning to the market as Bitcoin approaches $100,000.
Meme Coins As Standout Winners
Trading Vapor delineates how meme coins, despite being high-risk, offer maximum financial opportunities. He categorizes them into "blue-chip" meme coins like Pepe (CRYPTO: PEPE), Dogwifhat (CRYPTO: WIF) and Bonk (CRYPTO: BONK), which have achieved escape velocity and cult-like communities. These coins, with no dilution and CEX listings, are appealing to both mass retail and crypto natives.
He adds Dogecoin (CRYPTO: DOGE), Shiba Inu (CRYPTO: SHIB) and Floki Inu (CRYPTO: FLOKI) to the list. But he also sees them as dino coins, implying "fully diluted but with no attention nor momentum on them" and hence they become a little less interesting.
Highlighting DOGE and SHIB's last cycle bull run Vapor added, "The advantage of blue-chip meme coins are multiples, which makes them arguably the comfier candidates to hold for a future alt season."
Why It Matters: Trading Vapor's analysis suggests an alt-season is likely if Bitcoin continues its upward trajectory. Meme coins, especially well-established ones, could see significant gains in this scenario as investors look for high returns.
The trader added that despite new categories of altcoins emerging, "the arbiter of truth will remain mass retail and what they decide to buy during the last innings of the bull run." He emphasized that there are stronger reasons to assume that they will pick CEX-listed meme coins just like in 2021.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Read Next: Arthur Hayes, Raoul Pal Predict Dogecoin ETF: ‘If People Wait In Line For Luxury Brands, They Will Trade Meme Coins Online’
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
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