According to Ben McMillan, chief investment officer at IDX Digital Assets, Bitcoin (BTC) and altcoin projects tend to perform like growth-focused stocks, and “the correlation between the two has never been so tight.” Here are McMillan’s thoughts on the crypto market…
McMillan still looking up for BTC
Cryptocurrencies are booming as high-risk stocks rise as they did for most of the past year. However, cryptos are crushed when risk assets are sold in droves, as in 2022, as we have reported on Cryptokoin.com. Less experienced crypto investors may be weighing their decision to dive into crypto assets again, but McMillan doesn’t think exiting the market just yet
“The bull case is still going strong,” McMillan said. . But in this context, he drew attention to volatility and said, “You have to be very careful about the risk you take.” McMillan did not share direct price targets for Bitcoin and Ethereum. However, he cautioned that the two tokens are likely to drop further above their late January lows.
Which are the 5 altcoins to watch out for?
While McMillan says cryptos are no longer the best way to diversify a portfolio given their extremely strong ties to growing stocks, he still believes some exposure to the emerging asset class and the blockchain technology that powers it is still wise. To that end, he shared five altcoins he believes should be followed. McMillan’s firm, IDX Digital Assets, offers a special index that aims to balance crypto and cash positions, giving investors exposure to these assets with less volatility and downside risk.
But BTC and ETH aren’t the only cryptos around. McMillan said that they can get away from the two biggest coins by bottom hunting in the five altcoins that investors are eyeing. The altcoins that the analyst drew attention to were Solana (SOL), Avalanche (AVAX), Chainlink (LINK), Terra (LUNA) and Cardano (ADA). He stated that they do not see these altcoins as Ethereum killers, but that these cryptos are “quite complementary to create a broader layer-1 base.”
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