Author: Route 2 FI Source: X, @Route2FI Translator: Shan Eoba, Jinse Finance
The new feature of this cycle is that we have experienced several small Altcoin seasons, and most tokens, including those from the previous cycle, have experienced an upward trend. Here are a few key time periods:
• January to March 2023
• October 2023 to March 2024
• September to December 2024
In addition, the market has experienced multiple narrative rotations, from the gambling coins and Telegram bots in the summer of 2023, to the AI agents and DeFAI that became popular in the fourth quarter of last year.
Many people still expect a large-scale Altcoin season like in 2021 (which had two). But this is no longer 2021, and the biggest difference is that we may now have close to 1,000 new Altcoins (relatively large-scale tokens with some roadmap) compared to the market four years ago.
Diversification and Decentralization Challenges
The strategy of investing in Altcoins has always been to hope for higher returns than Bitcoin, and then convert these gains into BTC or USD. But the problem now is: which Altcoins should you buy?
The market is now highly decentralized, and you can easily choose the "wrong Altcoins" - those that won't rise, while your friends are making crazy money.
Another feature of this cycle is the "trench" strategy. While there was on-chain activity in 2021, it is nothing compared to the Solana "trench" today. Earlier, you just needed to log into Binance and you could buy almost all tokens, with a simple play: see Hsaka mention a few "hot words" and you know you should long $SOL, and then immediately long $AVAX.
However, with the explosion of $PEPE in April 2023, the rules of the game have changed. Since then, memecoins have gained tremendous attention, followed by the emergence of $BITCOIN, $WIF, $POPCAT, $GOAT, and the list is incredibly long.
Narrative-Driven and Meta-Cycle Shifts
The environment has now shifted from the previous synchronous rise of most tokens to a narrative-driven meta-cycle (such as function tokens, animal tokens, AI tokens, etc.). The reason people complain about Altcoin seasons is that they are used to the hoarding strategy, which was the play used by OGs before 2017 and 2021. Does this strategy still work this time? Clearly not for all tokens.
I can even say that the people who dominated in 2017 and 2021, if they haven't transitioned from the perpetual contracts of centralized exchanges, they no longer have a real advantage when they enter the market in 2024, facing the memecoins and AI coin players in the Solana trench.
The decentralization of the market is real (too many new token issuances). The effective strategies of the last cycle no longer apply. The "buy and hold" strategy is only effective for certain assets (such as BTC and SOL), forcing people to do more rotation.
If you are a trader willing to operate in both the CEX and on-chain markets, this new environment should not be too worrying for you. As long as the market remains volatile, there will always be opportunities.
My advice is not to think that "going long" is your only choice. When you feel uncertain, you can also hedge, earn funding rate income, short, or even do hedging trades.
The Future of Altcoins
Have we reached the top? Probably not for Bitcoin. But I'm sure many Altcoins have already peaked and won't reach their all-time highs (ATHs) again. Of course, this doesn't mean there won't be a few Altcoin rallies in 2025. But in the long run, the number of buyers is not enough to offset the large unlocked token supply.
You see, reflexivity works both ways. Just like a ball thrown into the air, it will eventually fall back to the ground.
