Declining US Household Savings May Impact Altcoin Season, Says Analyst

According to U.Today, financial analyst Murad Mahmudov has expressed his belief that a significant altcoin season may not be imminent due to the decreasing cumulative excess savings of US households. Recent data from the Federal Reserve Bank of San Francisco indicates that Americans have depleted their savings. This follows a substantial increase in savings from March 2020 to August 2021, driven by a significant decrease in consumer spending. According to economists at the San Francisco Fed, excess savings peaked in August 2021, exceeding an impressive $2.1 trillion. Despite the fact that these savings have largely been exhausted, the report suggests that a robust labor market could sustain spending. However, recent earnings reports from major companies such as Amazon indicate that consumers are becoming more budget-conscious. Mahmudov suggests that given the increased caution in spending compared to 2021, Americans are unlikely to invest heavily in risky alternative cryptocurrencies. He stated, 'The most you can hope for is an occasional well-timed spike by a particular flavor-of-the-month outperformer from the crypto-native PvP hot ball of money.' Mahmudov also highlighted the oversupply of altcoins, stating, 'Altcoins are growing in both number and aggregate fully diluted market cap with each new token release.' Comparing the current market cycle to that of 2017, he noted that the market was much smaller then, meaning less capital was needed to achieve significant gains. Additionally, it was more challenging to create new tokens at that time.