- According to new research from popular social trading platform eToro, investors who switch between Bitcoin (BTC) and altcoins were able to increase their earnings significantly in 2020. Of course, it is difficult to determine when the altcoin season will start.
In 2020, up to 7 times could be earned with correct transitions.
In its most recent quarterly report, eToro unveiled various cryptocurrency investment themes related to the 2020 bull market. Part of the cryptocurrency market cycle was devoted to the altcoin season, where altcoins rose against the dollar and likely outperformed Bitcoin, the report said.
The research revealed that the top 100 altcoins, taken equally, are a “more lucrative investment” than BTC for most of 2020. To be precise, that was until December 18th. However, knowing when to switch from BTC to altcoins and vice versa, investors were able to nearly double their earnings over the year.
The statement of eToro is as follows:
“If you started with Bitcoin, you could have earned 3 to 7 times in just two swaps all year. These crossovers are from bitcoin to altcoin in May and back to Bitcoin in September.
How to tell the beginning of the altcoin season?
Although EToro admits that it is very difficult to predict altcoin season and BTC season, the research looks at a variety of metrics that can help investors determine market cycles.
Relative trade volume, social media activity, new cryptocurrency listings, and the number of news articles published from crypto projects seem to have an impact on whether altcoins are on the rise.
Of course, trade volumes present a classic chicken or egg situation, as it is not always clear whether the trading activity is increasing organically or simply because the price goes up.
On social media activity, eToro uses data from The TIE, a crypto analytics firm, to compare altcoin tweet volume to Bitcoin.
According to the report, the data suggests that “the sub-season can be defined by the relative number of tweets related to altcoins.”
“This metric looks set to catch not only the May and October changes, but potentially the short altcoin season in late February.”
Dogecoin attracted attention
The joke-based cryptocurrency Dogecoin (DOGE) has caught the attention of social media in recent days. Last week, DOGE became the first altcoin to surpass Bitcoin in terms of daily trading volume, according to The TIE.
Regarding Exchange listings, eToro demonstrated a “net increase in listings” in late summer 2020, using data from TIE. This was the same period when altcoins surpassed BTC.
The spikes in the news published directly by cryptocurrency companies also seem to be related to the altcoin season. “This makes intuitive sense,” says eToro, as these articles are often about project updates and other big announcements. says.