Friends, I understand that this analysis has become too large for me, but the topic is very important. If you still believe and are waiting for a new alt season, I highly recommend you read to the very end!
If you agree, then let's get started!
The altcoin market is entering a new phase. According to Bloomberg, the MarketVector index, which tracks 50 mid- and micro-cap tokens, has fallen by almost 70% since the beginning of the year and has returned to levels of early 2020. The total market capitalization of altcoins has decreased by approximately $200 billion from its peak.
This is not just another 'crypto dump'. This is a structural change: retail 'casino capital', which has been swinging memes and small tokens for years, is starting to move from this segment to other risk zones — from crazy stock options to prediction markets and crypto instruments tied to real companies.
What is really happening with altcoins
In previous cycles, the picture was painfully familiar:
Bitcoin is flying up
altcoins are catching up with even more leverage
then all of this falls, but we only remember X10 stories
In this cycle, the mechanism has broken. A significant portion of alts has barely participated in the rise, yet received the full share of the fall when the market reversed.
Key changes:
Retail no longer believes in the 'eternal alt season'
The wave logic of 'buy anything — everything will grow' has stopped working. Investors are increasingly looking at:real users
protocol revenue
working product
Tokens without product-market fit simply deflate.
Competition for excitement has exploded
The same user who once chased dog tokens now has a different choice:zero-day options (0DTE) on the stock market
tech stocks and thematic ETFs
prediction markets (like Polymarket, where volumes are setting records)
on-chain products that allow trading conditional 'shares of Apple or Nvidia on the blockchain' 24/7
Bitcoin ETFs are sucking liquidity out of alts
A portion of capital that previously went into the 'basket of altcoins' is now finding a more transparent and understandable instrument — spot Bitcoin ETFs. For traditional investors, this is a simpler story than studying hundreds of tokens with murky tokenomics.Token inflation and overvaluations
Many new projects have come to market after large closed rounds, where funds entered at low prices. When the token reached retail investors:FDV (fully diluted valuation) was already astronomical
token unlockings constantly pressured the price
real demand couldn't keep up with supply
As a result, as one market participant accurately formulated:
'when retail finally gets access to the token, most of the upside has already been squeezed out'.
Why the market punishes 'empty' projects
In a news piece from Bloomberg that I analyze, a telling fact is cited: only about a dozen crypto projects in the last month generated over $1 million in revenue, according to Token Terminal.
Against the backdrop of thousands of tokens that continue to trade, this sounds like a verdict:
Most projects lack a sustainable business model
Often there is neither a product, nor revenue, nor real network value
There is only a token and hope for 'the next wave of retail'
The same greater-fool trade (the logic of 'find the next bigger fool who will buy at a higher price'), which has been the foundation of altcasino for years, is now working much worse. There are simply fewer 'fools' — they have other gaming platforms.
Macro factor: what has changed in the big game
To understand the next alt cycle, it is important to look beyond daily charts:
Global liquidity
After a period of tight monetary policy, the role of central banks (Fed, ECB, BOJ) became critical for all risk assets.
Crypto no longer lives in isolation — it is embedded in the overall risk-on / risk-off mode.
The emergence of institutional infrastructure
ETFs on Bitcoin, custodial solutions, regulated derivatives are changing the profile of market participants.
Part of the 'old' crypto risk is moving to more conservative forms.
The changing role of altcoins
Previously, they were 'leveraged beta' to Bitcoin.
Now they are expected to have functions:
access to the protocol
real revenue that partially returns to holders
deflationary mechanics or buyback policies (like some exchange tokens, including those that are already demonstrating resilience in the face of a market downturn).
Altcoins that have no answer to the question 'what are we actually paying for?' are now being punished much more harshly by the market.
Where has the excitement of retail gone
Retail hasn't gone anywhere — it is simply evolving:
In traditional finance: short options, leverage, thematic funds.
In crypto:
derivatives on small altcoins with leverage
products tied to the stocks of real companies
prediction markets, where you can bet not only on the price but also on events (elections, sports, macro statistics).
These tools seem clearer than another meme token without a roadmap. There is a clear story: 'bet on the match outcome', 'bet on Nvidia's report', 'bet on the Fed's decision'. While 'betting on token X, which promises to become something someday' no longer captures the mass imagination.
What this means for the investor and trader
For the market participant, the consequences are as follows:
An altcoin is no longer a 'default' lottery ticket
Each project will have to be analyzed as a mini-business:whether there are users and on-chain activity
whether there is a revenue model
how the token is tied to this cash flow
what the schedule of unlocks and token distribution looks like
The risk profile has changed
Without wild retail flows and without endless cheap money, altcoins become an asset with much stricter selection. Many projects will simply slowly 'crawl to zero', without loud dramas.'Old habits' no longer work
Strategies like:'buy everything on the top 100 list and wait for X10'
'just sit in alts, because alt season is coming soon'
— now carry much more risk than potential reward.
Conclusion from Moon Man 567
A $200 billion drop in the altcoin segment is not just another painful market reversal. It is a signal that the era of easy casino in crypto is coming to an end.
The market is beginning to demand from tokens the same as it demands from stocks:
a clear business model
real revenue
transparent tokenomics
adequate entry valuation
For the investor, this means fewer 'magical stories', but more work with analysis. For the trader — fewer mass crazy pumps, but more targeted opportunities where there is real demand and a clear narrative.
I expect the next big cycle in crypto to be much more selective:
units of strong altcoins with real products and cash flows
tokens that will work as quasi-shares of their protocols
the slow death of hundreds and thousands of 'empty' projects that have not found their user.
👉 If you want to navigate this new, more selective crypto reality — subscribe to Moon Man 567.
There will be even more macro transparency, analyses of real cases, and sober, rather than casino-like market scenarios.
