In recent times, we have seen Alt coins hammered pretty hard. Since December Bullish phase, every single Alt coins keeps on falling. Majority of Alt coins have fallen by almost 60-70% of their price and some even by 90%. The worst fall in Alt coins happened when BTC started falling from $7400 to $5800.
If we talk about Whales or Institutional Investors, they usually invest their money into Bitcoin, Ethereum and Bitcoin Cash. The fact Alt coins are mostly trade just on speculation and do not posses any kind of value, Whales usually avoid them. Apart from Top 10 Coins in crypto space, there are almost 1500 Alt coins still exists. Out of these 1500 Alt coins, only a few of projects have a working product and majority of them are mere trading on speculation.
Out of $274 Billion total market capitalisation of crypto space, $114 Billion is occupied only by Bitcoin and $67 Billion is occupied by both Ethereum and Ripple. Only $80 Billion is spread across 1500 Alt coins projects.
Apart from liquidity and solid fundamentals, another reason for Alt coins hammering is SEC's regulations.
SEC have taken strong measures to warn investors about the potential dangers associated to invest in ICO's. Although, SEC has announced that Bitcoin and Ethereum doesn't come under securities but majority of ICO's tokens do and that's why new ICO's has to make KYC mandatory for all their investors. Being a security has come with a lot of formalities which wasn't even present 1 year back when Alt coins market were booming.
The SEC points out that some digital currency market participants and promoters of initial coin offerings (ICOs) are not following federal and state laws that govern other parts of financial markets, such as stocks and bonds.
Now, if you're about to invest in Alt coins, then please do your thorough research before making an investment in these projects as majority of them are gonna fail any way. Make sure the project you're investing in is legit and should have a working product.
Thanks for reading...!!