With bitcoin closing in slowly on $100,000 this week, the crypto market saw a big rotation into other cryptocurrencies, or "altcoins" on Thursday following the resignation announcement of Gary Gensler , the current chair of the Securities and Exchange Commission whose regulation-by-enforcement approach to crypto has made him a villain to the industry. There are thousands of altcoins on the crypto market that are smaller, cheaper, younger and less sophisticated than the blue-chip bitcoin. They've benefited from the flagship coin's rallies to new records this year and are poised to keep going, while bitcoin is in overbought territory near $100,000, according to Wolfe Research's Rob Ginsberg. "While we by no means are looking to persuade you to empty your 401k into the likes of dogecoin, it's still quite amazing to watch the sixth largest coin by market cap move 270% in the span of three months," he wrote in a note Wednesday. "It has not been alone … crypto coins across the board have exploded higher in recent weeks. On a relative basis it sure looks like crypto is poised to continue outperforming equities as we head into '25." DOGE.CM= 1M mountain Dogecoin has been one of the biggest winners of Trump 2.0 Meanwhile, bitcoin could soon be facing a pullback. Galaxy Digital CEO Mike Novogratz warned Thursday on CNBC's "Squawk Box" that "there's a ton of leverage in the system right now. ... The crypto community is levered to the gills, and so there will be a correction." Wolfe's Ginsberg said bitcoin's breakout higher "has brought price into deep overbought territory." Although, he added more optimistically that in previous moves of this magnitude bitcoin "has historically either gone into a consolidation period, or ignored the overbought condition as investors pile in." Bitcoin is in a class of its own these days, but altcoins span a variety of use cases and projects: Ethereum and Solana represent the smart contracts sector of crypto. Tokens tied to Uniswap and Cardano are a way to express interest in decentralized finance. And there's an entire cultural sector that includes applications for gaming, art and music – think nonfungible tokens, or NFTs. Any of these sectors could stand to benefit more than bitcoin if President-elect Donald Trump's incoming administration makes good on its pro-crypto stance. The flagship cryptocurrency has long been derisked from a regulatory perspective, while these others haven't. The riskiest business At the furthest end of the risk spectrum are meme coins like dogecoin , whose trading ballooned after the election . Meme coins are three to four times more actively traded than bitcoin and ether, adjusting for market cap, which makes them lucrative offerings for newcomers to the market who feel they missed the boat on bitcoin. Historically, they've been a gauge of retail interest and risk appetite in crypto, though most people warn against them. "I'd urge long-term investors to not place too much emphasis on meme coin activity — easy come, easy go," said Ryan Rasmussen, an analyst at Bitwise Asset Management. "In the long term, there will be very few winners in the meme coin market, and with thousands of coins launching daily, picking a specific meme coin is akin to buying a lotto ticket." Although they're purely speculative and may lack any intrinsic value they're a part of internet culture and reflect the origins, culture and permissionless nature of the crypto industry, said Zach Pandl, head of research at Grasycale Investments. "One of the greatest things about crypto is that anyone can contribute – there aren't institutions or gatekeepers standing in the way of people participating in this market – so we get things that are serious, brilliant ideas and we also get some that are relatively silly, like meme coins," he said. "That being said, I don't think dogecoin is going anywhere. Investors should be very cautious when approaching meme coins and know that the potential risks are significantly greater than with other crypto assets, but we should expect dogecoin to be a part of the crypto industry and in the financial markets for a long time to come." Robinhood's bread and butter? The popularity of meme coins in a crypto bull run could be a boon to Robinhood . After the election, the top five meme coins by market cap set a new daily high of $70 billion in trading volume, which was more than twice the prior peak in March 2024, according to Needham analyst John Todaro, who did not name the tokens. The largest of them, which is listed on Robinhood, did $45 billion. HOOD 1M mountain Robinhood shares over the past month "We expect a coming retail-oriented crypto bull market to play to HOOD's favor as the company has a track record of successful launches within meme stocks," he said. "While meme stocks such as Gamestop and AMC are a small part of the equity market, meme coins are a larger part of the crypto market and represent an outsized share of volume." Robinhood currently offers three of the top five most actively traded meme coins and he expects the company to add the other two, and possibly more, in the future, he said. Robinhood supports 19 cryptocurrencies, while Coinbase supports more than 200. Both stocks have surged since Trump's election, with Robinhood gaining nearly 44% and Coinbase up almost 55%. "We expect HOOD to be early to list meme coins and successful in listing assets that retail traders find appealing – a strategy that we believe is HOOD's 'bread and butter,'" he added. —CNBC's Michael Bloom contributed reporting.
