😬 The $800 Billion Altcoin Wipeout Nobody Saw Coming

Welcome back, friends —

The tide has turned again. Bitcoin’s holding the throne while altcoins are bleeding out. Retail traders in Korea, once the wild heart of every bull run, are now piling into crypto stocks and ETFs instead of small-cap tokens. The result? An $800 billion hole in the altcoin market and a warning for what comes next.

The altcoin market has just lost $800 billion as crypto traders around the world, notably retail investors in South Korea, have turned their focus to Bitcoin and crypto-related stocks, instead.

For years, Bitcoin and its altcoin brethren enjoyed an uncoupled relationship. When Bitcoin pumped, altcoins followed. And, when it crashed, they fell apart even more. But not this time.

This time, Bitcoin was the one to break away and the rest of the market got left behind.

The reason? It’s all a matter of who is buying what. Institutions are stacking up Bitcoin and stashing shares in publicly traded crypto companies. Retail investors: the lifeblood of altcoin rallies are looking elsewhere.

According to them the altcoin market would be $800 billion larger if Korean retail traders hadn’t gravitated towards crypto stocks and equities.

🇰🇷 Korean retail stops buying Altcoins

South Korea has long been the epicenter of the altcoin craze. Local exchanges, in the past, processed more than 80% of volume on smaller tokens rather than just 50%, as seen globally where Bitcoin and Ether are king.

Korean trading ops averaged for crypto between Nov 5 and November 28, 2024 was $9.4B daily outflanking the overall $7B daily traded on stock exchange Kospi. Then all went quiet.

Thielen’s team believes the Korean trading collapse is one of the main reasons altcoins are in a free-fall. “It’s a structural shift,” he said, not just a temporary pullback. Retail traders are swapping out of high-risk coins into crypto infrastructure stocks that actually have Bitcoin.

💣 Altcoins suffer most during market rout

The latest selloff simply widened the wound. Crypto dropped $380B in value as US–China trade war took heat. Altcoins made up the other $131B of that: the highest one-month drawdown in a year.

Altcoins were trading less volume than Bitcoin or ETH, but had swollen into a massively market share. But traders have stopped holding out for rebounds. They’re exiting.

“The issue with altcoins is that they can go up more, but they can also go -50% in a day,” said Morten Christensen, a trader with AirdropAlert. com. “Late cycle, I’m not playing that game.”

📈 Bitcoin holds the line

Bitcoin’s dominance remains at 58.5%, down from July’s 65% but still firmly in control, which could be a sign of where capital is flowing.

Wall Street’s options desks are getting taken over by meme trading once again. Roughly 40 percent of all options volume this week originated from a small group of names with no actual business growth, only internet hype and sky-high short interest.

The ringleaders: Beyond Meat (BYND) and Krispy Kreme (DNUT) both sub-$5 stocks, both losing money. But Reddit traders are loading up with reckless conviction. BYND 3.3 M contracts, or nearly 10 times its average. DNUT? 38× its norm.

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