KEYTAKEAWAYS
- The Bubble-like Proliferation of Altcoins in 2024 and Its Associated Risks
- The Explosive Growth of User Participation in Tap-to-Earn Games in 2024
- Nvidia (NVDA) Stock's Meteoric Rise and Signs of a Bubble in 2024
CONTENT
CoinRank examines 2024’s crypto market risks: altcoin oversaturation, tap-to-earn game frenzy, and AI stock bubble. Our analysis explores potential impacts on market stability and investor strategies.
INTRO
Between 2023 and 2024, the overall market capitalization of the crypto market did not exhibit a parabolic rapid growth, and has yet to return to its 2021 all-time high. These growth bubble predictions are not directed at the crypto market itself, but rather at other data points and entities that significantly impact the crypto market.
The following is a summary and evaluation of these growth phenomena:
1. THE BUBBLE-LIKE GROWTH OF ALTCOIN NUMBERS IN 2024 AND ITS ASSOCIATED RISKS
Although market capitalization has not returned to its peak, the number of altcoins and new projects has long surpassed previous highs, increasing many times over compared to previous cycles. This has led to a situation of “too many people, too little land” in the market, with too many projects dividing an increasingly smaller market cap pie.
- Data from Coingecko Research shows that as of April 2024, the number of tokens in the market has exceeded 2.5 million, up from 1.98 million in 2023. This means that in less than half a year of 2024, over 500,000 new tokens have been created. Coingecko reports that an average of 5,300 new tokens are created daily.
- Meanwhile, market trading volume has gradually decreased, and market capitalization has not returned to its 2021 high. Recently, Binance took unprecedented measures by introducing an early warning feature to alert users about tokens that might be delisted. This is due to the market being oversaturated with tokens but lacking liquidity.
It is anticipated that in the near future, the number of tokens lacking liquidity and suffering from low trading volumes will increase. Many tokens/altcoins will be delisted, and investors will need to reassess their portfolios and reallocate funds to genuinely high-quality tokens.
2. SURGE IN USERS PARTICIPATING IN TAP-TO-EARN GAMES IN 2024
Since the beginning of 2024, various tap-to-earn (click the screen to earn points) game applications on Telegram have sparked a frenzy in the community.
Hamster Kombat announced that as of June, their user base had reached 200 million, becoming the tap-to-earn application with the most users currently.
Tapswap declared they have 55 million global players and 18 million daily active users.
Yescoin also announced that in just over a month, their user count reached 18 million, with over 6 million users connecting their wallets.
All these projects are expected to become the next “Notcoin.” However, the question remains: how to provide sufficient liquidity for hundreds of millions of users? Will user growth continue indefinitely? Concurrently, many experts believe that the crypto market in 2024 lacks capital inflow from retail investors, who were a strong growth driver in previous cycles.
It is expected that the heat of user numbers for these Telegram Mini-apps will cool down or saturate in the second half of 2024, given that the altcoin market cap has recently fallen below $100 billion.
3. NVIDIA (NVDA) STOCK’S RAPID GROWTH AND BUBBLE SIGNS IN 2024
Nvidia (NVDA) stock is a prime example of the so-called “AI stock” wave of 2024. Taking the recent Apple stock as an example, AAPL’s market cap increased by $600 billion as the company entered the AI market through collaboration with OpenAI. NVDA’s market cap has risen nearly 900% in the past two years, surpassing Google and Amazon to become the world’s 4th largest asset by market cap (only behind gold, Microsoft, and Apple).
The Financial Times of the UK considers this phenomenon a sign of bubble growth, which forms when investors overestimate the potential of something and place high expectations on it. It’s currently unclear what impact an AI bubble burst would have, but the positive correlation between US stocks and Bitcoin suggests it could severely affect the entire crypto market.
