Are cow tail altcoins rampant? 64% of respondents believe it is very similar to 2017

This article was published on Wu's Blockchain, author: Uncle Tan.

In the early stages of a bull market, newly issued coins are often packaged, but as the market matures, issuers tend to be lazy about packaging and issue coins just for the sake of issuing them. Investing in various absurd junk projects often yields greater returns.

This year, the cryptocurrency market has entered a major bull market, with Bitcoin's price doubling compared to the beginning of the year, and increasing nearly tenfold compared to the same period last year. Other cryptocurrencies have also performed excellently. In addition, recent emerging projects represented by various animal-themed and MEME coins have refreshed people's perceptions with their price surges, reminiscent of the 2017 cryptocurrency bull market. Interestingly, in 2017, there was also a project called "Dark Dogecoin," which claimed a price increase of 10,416 times in a year.

In a survey conducted by Wu's Blockchain on Weibo, 2,667 people participated, with 64% believing it is similar to 2017-2018, only 14% believing it is not, while the others entered the market after 2017 and did not experience 2017-2018. At the end of 2017 and the beginning of 2018, the bull market reached its peak and then began to decline. We believe that the current situation has already shown similarities to the end of the last bull market in several aspects:

Bitcoin's Miner Fees

According to [The Block's data](1), during the last bull market, the average miner fee on the Bitcoin network peaked at $47.75 per transaction on December 27, 2017, a record that was broken on April 23 of this year, when the average miner fee reached $53.17 (with some randomness due to a power outage from a Northwest security check).

Due to the limitations of Bitcoin's block size, the surge in miner fees indicates users' enthusiasm for on-chain transactions and reflects the madness of bull market users, as most have already made significant profits and thus do not mind the high transaction fees.

A similar situation occurred on the Ethereum network, during the last bull market, Ethereum's miner fees reached a historical high of $3 per transaction on January 14, 2018, while this bull market saw the average miner fee on the Ethereum network reach $24.7 on February 25, a growth rate far exceeding that of the Bitcoin network.

Altcoins Competing for Bitcoin's Halo

After the bull market began, users often choose to speculate on altcoins with larger price increases, during which previously struggling altcoins began to soar. Interestingly, in December 2017, a coin called "Dark Dogecoin" (XVG) saw its price [surge by 800%](2) within a week, while other early altcoins like DASH also performed well, and emerging projects like Cardano and IOTA shone brightly. In this bull market, in addition to early altcoins like Doge, etc., performing well, some emerging projects like Polkadot have entered the top ten by market capitalization, and BNB has even entered the top three.

The excellent performance of altcoins has resulted in BTC's market capitalization being gradually eroded. In the last bull market, Bitcoin's market capitalization share in the cryptocurrency market fell to a historical low of 37.64% on January 1, 2018, and subsequently entered a bear market. Currently, Bitcoin's market capitalization share is also gradually declining, now at 45.16%. It is foreseeable that after popular projects like Dfinity are launched, Bitcoin's market capitalization share will further decrease. (Data source [tradingview](3))

Junk Projects Leading to Bull-Bear Transitions

In the early stages of a bull market, newly issued coins are often packaged, but as the market matures, issuers tend to be lazy about packaging and issue coins just for the sake of issuing them. Investing in various absurd junk projects often yields greater returns, making research and analysis meaningless, and over time, increasingly ridiculous coin names emerge. For example, during the last bull market in 2017, there were successive appearances of zodiac coins and even MLGB coins. In this bull market, it started with Elon Musk promoting Dogecoin, followed by SHIB quickly entering the top 20 by market capitalization, and a series of domestic and foreign animal coins emerging, with their values skyrocketing hundreds of times in a short period.

Of course, the large-scale entry of institutions, DeFi, NFTs, etc., are all positive characteristics that were not present in the last bull market. Currently, it is still too early to say that the bull market has bottomed out. However, the various crazy phenomena occurring in the cryptocurrency world today inevitably remind people of the last bull market.

Notes:

[1]:https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin

[2]:https://www.forbes.com/sites/jessedamiani/2017/12/19/crypto-watch-verge-xvg-price-climbs-800-in-a-week-what-is-xvg-and-why-is-it-growing-so-fast/

[3]:https://www.tradingview.com/markets/cryptocurrencies/global-charts/