Friends, I understand that this analysis has turned out to be quite lengthy, but the topic is very important. If you still believe and are waiting for a new alt season, I highly recommend that you read to the very end!
If you agree, 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 seen in early 2020. The total capitalization of altcoins has decreased by approximately $200 billion from its peak.
This is not just another 'crypto dump'. It is a structural change: retail 'casino capital' that has been swinging memes and small tokens for years is beginning to move from this segment to other risk zones — from crazy options on stocks to prediction markets and crypto instruments linked 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 greater leverage
then all this falls, but we only remember X10 stories
In this cycle, the mechanics have broken. A significant portion of altcoins participated little in the growth, but received a full dose of decline when the market turned.
Key changes:
Retail no longer believes in 'eternal alt seasons'
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 just deflate.
Competition for excitement has exploded
The same user who once chased dog tokens now has a different choice:
zero-day options (0DTE) in the stock market
tech stocks and thematic ETFs
prediction markets (like Polymarket, where volumes are breaking records)
on-chain products that allow trading conditional 'Apple or Nvidia shares on the blockchain' 24/7
Bitcoin ETFs are sucking liquidity from 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 the traditional investor, this is a simpler story than studying hundreds of tokens with murky tokenomics.
Token inflation and inflated valuations
Many new projects entered the market after large closed rounds, where funds came in at a low price. When the token reached the retail investor:
FDV (fully diluted valuation) was already astronomical
unlocking tokens constantly put pressure on the price
real demand did not keep up with supply
As a result, as one market participant accurately formulated:
when retail finally gets access to a token, most of the upside has already been squeezed.
Why the market punishes 'empty' projects
In a news piece from Bloomberg that I am analyzing, a telling fact is presented: only about a dozen crypto projects generated over $1 million in revenue last month, according to Token Terminal.
Against the backdrop of thousands of tokens that continue to trade, this sounds like a verdict:
Most projects do not have 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 basis of altcasino for years, now works much worse. There are simply fewer 'fools' — they have found other playing fields.
Macro factor: what has changed in the big game
To understand the next cycle of alts, it is important to look above the daily charts:
Global liquidity
After a period of tough monetary policy, the role of central banks (the Fed, ECB, BOJ) has become 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.
A part of 'old' crypto risk is moving to more conservative forms.
Change in the role of altcoins
Previously, they were 'leveraged beta' to Bitcoin.
Now they are expected to have functions:
access to the protocol
real revenue, which partially returns to holders
deflationary mechanics or buyback policy (as in some exchange tokens, including those that are already demonstrating resilience amid market decline).
Altcoins that do not answer the question 'what are we actually paying for?' are now punished much more harshly by the market.
Where has the retail excitement gone
Retail has not disappeared anywhere — it is simply evolving:
In traditional finance: short options, leverage, thematic funds.
In crypto:
derivatives on small altcoins with leverage
products linked to shares of real companies
prediction markets, where you can bet not only on the price but also on events (elections, sports, macro statistics).
These instruments seem clearer than another meme token without a roadmap. There is a clear story: 'bet on the match result', 'bet on Nvidia's report', 'bet on the Fed's decision'. While 'bet on token X that promises to become something someday' no longer captures the mass imagination.
What does this mean for the investor and trader
For market participants, the consequences are as follows:
Altcoin is no longer a lottery ticket 'by default'
Each project will have to be analyzed like a mini-business:
are there users and on-chain activity
is there a revenue model
how the token is related to this cash flow
what does the unlocking and distribution of tokens look like
Risk profile has changed
Without the frenzied flows of retail and without endless cheap money, altcoins are becoming an asset with much stricter selection. Many projects will simply 'slowly crawl to zero' without loud dramas.
Old habits no longer work
Strategies such as:
buy everything on the top 100 list and wait for X10
just sitting in alts because alt season is coming soon
— now carry much more risk than potential reward.
Conclusion from Moon Man 567
Moon Man 567 concludes
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 starting to demand from tokens the same thing it demands from stocks:
clear business model
real revenue
transparent tokenomics
adequate valuation at entry
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 like quasi-shares of their protocols
slow death of hundreds and thousands of 'empty' projects that never found their users.
👉 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 scenarios, not casino-like ones.
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