February 8, 2023
Chicago 12, Melborne City, USA

Crypto Investors Dump Small Caps For Blue Chips Like Bitcoin


The current trend in the crypto market has seen investors re-evaluate their position in digital assets like Bitcoin. As the market has grown and the infamous altcoin season has swelled, many investors have turned to small cap altcoins for some big profits. However, with these digital assets now dwindling, investors have had to find ‘safe’ options that have brought them back into the arms of large caps like Bitcoin.

Small caps take a beating

As with any declining market, small caps have borne the brunt of losses. They have outperformed other indicators by a large margin. As such, it is important for investors to get out of these small cap coins and move on to other indicators that provide safe haven for now.

Related Reading | The Bitcoin index has not seen a historic low since 2015

The small caps were the best performers during the bull rally, with all the big markets recovering. They are often the first point of contact for investors who want to make big profits in a short period of time. However, their very rapid growth trend also makes them vulnerable to large price declines, which the market is now seeing.

Small cap altcoin suffers losses

Small Caps Index record the most losses | Source: Arcane Research

The performance of the small caps index was nothing like writing at home as it returned -46% in losses for investors. Nearly half of where they were doing business at the beginning of the year, it continued to perform poorly throughout the first quarter of 2022.

Bitcoin The Rescue

Since small caps are no longer able to return huge profits that attract investors to them, the alternatives now remain large cap coins held in the market. The most notable of these is the pioneer cryptocurrency Bitcoin which is one of the best performers in all indices.

Related Reading | Altcoin reluctance: Why the dominance of Bitcoin and Stablecoin is increasing

Bitcoin, though repaying losses, holds up quite well. With only a 20% decline since the beginning of the year, this is one of the best performance indicators. Just by following the exchange token, the pack moves forward with a loss of only 14% from where the transaction took place at the beginning of the year.

Bitcoin price chart from TradingView.com

BTC maintains support level | Source: BTCUSD on TradingView.com

For comparison, defy tokens are working almost as badly as small cap indicators, 45% less than at the beginning of the year. This is followed by the Mid Cap Index with a 33% loss since the beginning of 2022.

Related Reading | Bitcoin looks set to drop to $ 32K – but not this month – as analysts see it hitting 48K

The Large Cap Index is also closely following the Mid Cap with a 32% loss towards the end of the first quarter. Privacy tokens have worked even better in this case because they themselves have been reduced by 31%.

These losses on all other indices have started to return investors to Bitcoin. In this way, they are able to reduce their losses while waiting for the market to recover.

Featured image from Forbes, charts from Arcane Research and TradingView.com


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