The Year 2031 Forecasts for Altcoins From Hybrid Intelligence
This year’s bull run brought cryptocurrencies back into the spotlight. Although the media, institutional investors, and most retail investors focused on Bitcoin and ETH, altcoins generated even gains.
Yet long-term crypto watchers know that this is just the beginning. Cryptocurrencies and decentralization are a massive trend that is still in its early stages. In this post, we present a mid-term view from Cindicator’s Hybrid Intelligence. While it shouldn’t be taken as financial advice, it summarizes the views from a broad selection of crypto watchers.
How the forecasts are made
Hybrid Intelligence is based on collecting forecasts from 180,000 analysts registered on Cindicator’s platform and then assigning weights to their answers using Machine Learning models. The resulting indicators have demonstrated average accuracy of 61% since 2017.
For these forecasts, the Cindicator team created questions about the year ahead:
The overall value of the altcoins market is around 1 trillion USD on August 10. What will be the maximum of altcoins market capitalization (in trillions USD) until August 10, 2022?
And also asked about the next 3 years:
The overall value of the altcoins market is around 1 trillion USD on August 10. What will be the maximum of altcoins market capitalization (in trillions USD) until August 10, 2024?
And finally, 10 years from now:
The overall value of the altcoins market is around 1 trillion USD on August 10. What will be the maximum of altcoins market capitalization (in trillions USD) until August 10, 2031?
After all answers were collected and questions closed, Cindicator’s Machine Learning models assigned weights to each forecast. The models take into account each analyst’s previous track records on the platform as well as other factors.
10-year target: 5 trillion, +500%
The chart probably speaks for itself. Cindicator’s Hybrid Intelligence expects the total capitalization of altcoins to increase. This is in addition to Bitcoin’s market capitalization, which at its recent all-time high exceeded $1 trillion.
It is important to note that this is an approximation and in reality, the chart will not be as smooth. Based on its previous history, the altcoins market capitalization will likely rise in sharp peaks (maybe even generating triple digits annual returns) followed by deep, painful double-digit drawdowns.
Some of the altcoins that are now in the top-100 by market cap will likely disappear altogether. At the same time, new leaders will emerge. Some of these assets have probably not even launched. Nobody, not even the smartest people in the world, can be certain which assets will be the winners.
It is quite likely, however, that a large part of this growth will likely come from growing institutional adoption.
Currently, many hedge funds and other asset managers are limited by their mandates to the most established assets: Bitcoin and Ethereum. Most large investors are only beginning to build positions in reigning Defi leaders such as Uniswap ($17 billion market cap), AAVE ($5 billion market cap), and Compound ($2.6 billion market cap).
Even these largest protocols are still tiny for institutional investors that manage billions of dollars and must place orders worth millions of dollars.
However, smart money will try to claw back its share of the market. They will exploit market crashes, shaking out the weak hands and buying for the long term. Furthermore, in the current underdeveloped regulation, nothing stops them from using the wide range of manipulative tactics that were banned in the stock market decades ago.
Given these factors, the most appropriate way to gain exposure to this trend would be to build a diversified portfolio with a large number of assets. Regular rebalancing will be necessary to ensure that the losers are cut swiftly and emerging assets are included in the portfolio early.
Time to build your positions
Many investors lament missing the chance to buy Bitcoin in 2016 or ETH in early 2017. Yet the opportunities over the next decade are of even greater magnitude. Crypto has now proven its use case and it is impossible to stop innovation.
The great news is that for the first time in history, small retail investors are at an advantage compared to institutional investors.
Anyone can sign up on a crypto exchange and build a cryptocurrency portfolio. Yet it will take time, skills, and dedication to select the right assets, manage positions, and rebalance at the right time.
The hardest part of this is dealing with your own thoughts and feelings. The crypto market stirs strong emotions: greed, the fear of loss, the fear of missing out. It’s easy to give in to panic and sell and where everything is falling. It’s emotionally hard to bite the bullet and cut your losses when the trend is against you. And worst of all it’s nearly impossible not to fool yourself by rationalizing your own mistakes.
Luckily, Stoic is here to help you. It won’t generate profits every day or even every month. Yet it will build a hedge-fund grade portfolio based on quant research. And it will automate the regular rebalancing, freeing up your time for other things.