With Bitcoin’s recent surge, and the prospect that Litecoin may be about to explode in price on Mt. Gox becoming more and more an accepted reality, there has been what can only be described as a “giant sucking sound” pulling currency out of the alt-coin markets. While Bitcoin has stabilized close to the $185 mark on most exchanges and most eyes (and pockets) are moving into the Litecoin market, alt-coins of all sizes have been languishing undervalued in comparison to their summer highs.
If and when the alt-coin markets do return, however, won’t be for a long time yet. Large holders are gearing up for what is looking increasingly like a major long-term rise in BTC prices, and in the meantime are waiting for Midas to hit MtGox so they can dump their LTC holdings at first signs of a bubble. That leaves little time to invest in the microbial alt-coin markets, where all summer coin after coin has been pumped just to be harvested and dumped into crypto- gold and silver.
One advantage that the alt-coin markets do have going into the future, though, is that the endless delays at Gox with Midas have allowed alternative exchanges to flourish and thus proliferate their currencies on a massive scale. This “first generation” of crypto-currencies beyond BTC and LTC will be afforded a massive advantage in adoption over most new currencies joining the circus following this most recent hysteria. And everyone crazed with BTC-lust right now will still have their wallets and obsolete mining rigs lying around once things die down. In all likelihood, any next crypto-currency to succeed on a scale as massive as Bitcoin will do so because of improvements beyond what the current alternatives offer, but that doesn’t negate the fact that the total alt-coin market has been amassing considerable value amidst all the Bitcoin hype.
In the meantime, the alt-currencies on Cryptsy likely have a lot more sinking to do while the madness surrounding Bitcoin—and soon Litecoin—unfolds. But as both of those coins cap out (and crash, in the latter’s case, as mega-holders finally make their Litecoin millions), prospectors will look to their old friends on the alt-coin exchanges and realize that prices are sitting at bargain-bin discounts with nowhere to go but up. Litecoin itself is such a young coin that it will undoubtedly be a long and rocky start to its appearance on MtGox before it finally smooths out, but whenever that is, the alt-coin exchanges will be waiting.
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