The New Bitcoin Era and the Mini-Altcoin Season

During this cycle, we witness so many changes or new incredible things, such as:

1. MemeCoin Season seems to have replaced the previous Altcoin Season.

2. Although Bitcoin has reached the $100,000 milestone and broken its historical highs many times, the king of altcoins ETH has not even exceeded its historical high in this bull market, and the current price of ETH is the same as it was 4 years ago.

3. The number of projects (tokens) is growing exponentially.

For example, in March 2021, there are 350,000 tokens in the crypto market, by March 2022, there are 4 million tokens in the market, and in March 2025, the total number of tokens exceeds 40 million. At the current rate of development, it is expected that by 2026, the number of tokens in the market may exceed 100 million. As shown in the figure below.

4. In 2024, BTC ETF was finally officially approved, and ETH ETF was also approved. Currently, more ETFs such as DOGE, XRP, LTC, SOL, ADA, etc. are applying for review (however, the SEC has now postponed the approval of these altcoin ETFs. Combined with the current overall market performance, the probability of passing the relay in the second half of this year may be greater).

5. In 2025, the United States will add Bitcoin to the strategic reserve program (executive order).

6. Institutions are actively hoarding Bitcoin and some altcoins.

Although in the last cycle, large institutions such as Grayscale have entered the market, and we have also experienced the entry of institutions such as Tesla, and Musk has been constantly milking the market, but starting from this cycle, the participation methods of major institutions have been relatively reversed and more extensive, such as the large institutions such as MicroStrategy and BlackRock that we have seen.

Of course, in addition to Bitcoin, some other altcoins have also begun to be favored and deployed by some institutions. For example, WLFI (World Free Finance, a DeFi project supported by the Trump family) has been buying (it is not ruled out that some tokens are sponsored) ETH, ONDO, MOVE, ENA, LINK, AAVE and other tokens since this year. As shown in the figure below.

It seems that we are always following the laws of historical cycles, while constantly witnessing some new differences or new history.

From an investment perspective, some old investors who stick to investment thinking seem to have suffered losses in this cycle, especially those who insist on focusing all their investments on the value investment strategy of altcoins. A few days ago, I saw a more representative report saying that a whale built a position in PENDLE eight months ago, but it seems that he did not hold on until this month and may have sold it at a loss. As shown in the figure below.

Of course, this is what the old man above is doing. It is obvious that the old investors may still hold on to the altcoins that have fallen by more than 80%. They are currently in a dilemma. For example, they are unwilling to stop losses directly, but they feel that they cannot make money by switching to Bitcoin... In fact, it is difficult for anyone to give up when faced with such an outcome. As for what to do, we gave some of our own thoughts and suggestions from the long-term and short-term perspectives in the article on March 11. Interested friends can go back and read the corresponding article directly, and I will not repeat it here.

Let’s put aside the macro factors for now. As for the crypto market itself, judging from the current overall market environment, it seems that people’s (including institutions’) attention to Bitcoin (people who have been hurt or not hurt in this cycle seem to have basically re-planned to pay attention to Bitcoin in the long term) is unlikely to trigger a similar “upward” trend in Bitcoin, because sometimes excessive attention will form a certain amount of pressure, and this “pressure” lever may make it difficult for Bitcoin to regain its dominance (or even unable to continue to rise), prompting more people to turn to Bitcoin (now more and more people have believed that investing in Bitcoin is better than investing in other altcoins), and more and more people will take the initiative to take over when Bitcoin falls back…

Under the new changes and new patterns in the above-mentioned market, it seems that we can hardly see the traditional peak season of altcoins (that is, after Bitcoin reaches a certain historical high, its dominance begins to decline, and then altcoins fly together). Since this cycle, the so-called altcoin season seems to have been replaced by the rapid rise and fall of the periodic MemeCoin season, Trump season, AI season and other sector-specific altcoin seasons (or we can call them mini altcoin seasons).

Now, can we still see the traditional altcoin season of "10,000 tokens flying together"? I think this kind of comprehensive altcoin season is already difficult. You can't let 10 million tokens rise several times or dozens of times at the same time!

Coupled with the fundamental change in liquidity, that is, the crypto market has injected a large amount of liquidity (new money), which supports the logic that all altcoins can rise together again.

But the next mini altcoin season will still come, it's just a matter of time. If you are still interested in altcoins and don't want to spend too much time and energy on project research or participating in PvP games, then just focus on exploring projects with strong fundamentals, such as projects that can generate continuous income, projects with good token economics, projects that can continue to build and have development vision... The easiest way is to directly choose from the top 100 in market value.

It is foreseeable that in the future, liquidity will still be mainly concentrated on BTC and a few altcoins. The liquidity of most altcoins may face shortages or continue to decrease. The massive amount of altcoins (plus many VC projects continue to unlock tokens at the source) makes liquidity more dispersed. For this fundamental problem, we can only continue to patiently wait for internal refreshes (that is, innovations within the crypto market, but I can't see them for the time being) and changes in some macro factors (such as the expected interest rate cuts in June this year, and the new US policies for the crypto industry this year, etc.), in order to form a quantitative solution to the internal problems of the crypto market.

I remember people often say this: history doesn’t repeat itself, but it often rhymes.

We need to understand this sentence reasonably. The so-called rhyme does not mean that we can directly look for the sword on the ship. As the author of this article said, although the market cycle exists according to certain rules, the market is also constantly evolving. Some scenarios in the previous cycle may not be fully applicable at present. We need to keep pace with the times and constantly adapt to and study new scenarios in the current cycle.

At this stage, everyone's opinions are quite different. Some people think that the market has completely entered a bear market, some think it is just a technical adjustment (the biggest bull market is still to come), and some think that the bull market has just begun. As for my personal opinion, in fact, someone has shared it in a series of articles. I think there may be some new opportunities this year (but not large-scale opportunities), but I couldn't see too far ahead before. For now, let's look at the possible situation in May and June this year.