Crypto investors are rejecting small caps for blue chips like bitcoin

Crypto investors are rejecting small caps for blue chips like bitcoin

The current trend in the crypto market has led investors to reconsider their positions in digital assets such as bitcoin. As the market boomed and the infamous altcoin season flourished, many investors flocked to altcoins with less capital for some big gains. However, with these digital assets now in decline, investors had to find ‘safer’ alternatives that put them back in the hands of bigger caps like bitcoin.

Small Caps Take A Beating

As in any declining market, small capital firms have borne the brunt of losses. They significantly underperformed other indices. It is therefore imperative for investors to step out of these smaller coins into other indices that provide a safe haven for now.

Related Reading | The Bitcoin indicator has reached an all-time low

Small capital had the best performance during growth, all the way to large market recoveries. They are often the first point of contact for investors who want to make big profits in a short period of time. However, their propensity for very rapid growth makes them prone to large price drops, which the market is now seeing.

Small Caps Index record the most losses | Source: Arcane Research

The effect of the small capital investment index is nothing to write about as it has returned -46% in losses to investors. That’s almost half of what they traded at the beginning of the year, making it a consistently poor performance during the first quarter of 2022.

Bitcoin To The Rescue

As small caps are no longer able to recoup the huge profits that have attracted investors, the alternative now remains larger capital coins that have remained on the market. The most prominent of them is the pioneering cryptocurrency Bitcoin, which was one of the best among all indices.

Related Reading | Aversion to Altcoin: Why the dominance of Bitcoin and Stablecoin is on the rise

Bitcoin, although it also recouped losses, held up pretty well. With a decline of only 20% since the beginning of the year, it is one of the indexes with the best performance. Only the following tokens for water exchange in the package with only 14% loss compared to the place where it was traded at the beginning of the year.

Crypto investors are rejecting small caps for blue chips like bitcoin

BTC maintains support level | Source: BTCUSD on TradingView.com

By comparison, DeFi tokens performed almost as poorly as the small-cap index, down 45% since the beginning of the year. It is followed by a medium capitalization index with 33% losses from the beginning of 2022.

Related Reading | Bitcoin is falling to $ 32,000 – but not this month – as an analyst sees it reaching $ 48,000

The large capitalization index also closely monitored medium-sized capital with losses of 32% by the end of the first quarter. Privacy tokens fared better in this regard as they themselves saw a 31% drop.

These losses in all other indices have led investors to start returning to bitcoin. In this way, they are able to mitigate their losses while waiting for the market to recover.

Featured image from Forbes, charts from Arcane Research and TradingView.com



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