Crypto Market Downturn Hits Small-Cap Tokens

The cryptocurrency market is grappling with a significant downturn, particularly affecting smaller, riskier digital tokens. An index of the fifty smallest digital assets recently hit a low point since November 2020, though it has since recovered slightly. This decline coincides with Bitcoin losing its earlier gains. Altcoins, often seen as a risk indicator, have performed worse than larger tokens since early 2024. Historically, smaller tokens grew faster during market growth, but this trend shifted after the US approved exchange-traded products for Bitcoin and Ether, attracting institutional money. Pratik Kala, a portfolio manager at Apollo Crypto, notes that retail traders are learning from past cycles, with only quality tokens benefiting from market growth. This weakness in altcoins could complicate plans for companies launching new exchange-traded funds tied to smaller tokens, as seen with Dogecoins ETF, which has not seen new investments since October 15th and has dropped 13% in the past month.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.