In this bull market, I believe many people feel that making money in this circle is becoming increasingly difficult, and if they can't keep up with the pace, they will be eliminated.
Quantity crisis: too many tokens, too little value
Although the official number of altcoins is reported to be 13.24 million, the actual number may exceed 36 million. Theoretically, if these tokens can deliver real value, such explosive growth could signal a thriving ecosystem. However, most assets currently in circulation stem from a continuous meme coin frenzy.
As industry trends evolve, attention is shifting from core development to building new products. Today, various protocols offer solutions that allow users to issue tokens with just a few clicks, spawning a wave of new unvetted assets.
The cryptocurrency industry is still plagued by an old problem—over-saturation. Countless creators view token issuance as a quick scheme to get rich. Most tokens gain attention due to fleeting hype but lose it shortly after issuance.
The previous era of altcoins propelled technological breakthroughs, such as Ethereum and other altcoins, leading a new generation of composable Layer-1 solutions and introducing functional smart contracts. This enabled developers to build foundational applications, giving rise to decentralized finance and non-fungible tokens.
Historically, the tokens of innovative projects have been able to create value. But that is no longer the case, as too many speculative assets now overshadow the true builders in the industry.
The cryptocurrency ecosystem has multi-layered stakeholders that keep the industry functioning normally. During its formative period, venture capital firms played a crucial role by selectively investing in projects with good product-market fit.
In the early days of altcoin development, acknowledgment from venture capital was the gold standard for a project's credibility, and retail investors closely monitored these market movers.
Today, the cryptocurrency industry is undergoing a significant transformation—from pure technical development to marketing driven by influence and community-led growth. Projects often skip traditional venture capital and directly engage with communities through DAOs and popular Telegram or Discord groups.
Undeniably, this trend raises significant concerns for the industry, as altcoins occupy a unique position in Web3. This year, up to $70 billion of vested altcoins are expected to be unlocked, further diluting market valuations. In contrast, the inflow for Bitcoin ETFs is only $40 billion, which is a typical case of oversupply and weak demand.
Since most technological advancements are aimed at mainstream cryptocurrency users, altcoins with strong fundamentals find it hard to compete with meme coins that offer instant returns. One might argue that unless meme coins cease to consistently outperform utility-driven altcoins, the true market valuation will be dominated by those short-lived and unsustainable assets.
Influential figures and their loyal audiences eliminate noise more quickly than any code submission. People often perceive this as a distraction, viewing it as a sign that cryptocurrencies are losing their way. But what if that's not the case? What if the hype is not replacing development, but instead funding it through bringing liquidity, users, and attention?
Influential people will soon dominate the market
Indeed, any lasting innovation must be built on strong fundamentals, and cryptocurrency is no exception. Although the dominance of altcoins is evident, changes in the ETH/BTC ratio signal a noteworthy shift.
This ratio is at the lowest level in years, indicating lower confidence in altcoins compared to Bitcoin. This marks a general retreat of investors from risky assets back to fundamentals. As altcoins progressively lose influence, the entire ecosystem—including developers and investors—needs to adjust its strategies accordingly.
As a key driving force behind the development of cryptocurrencies, altcoins will ultimately shift the focus to projects with sustainable revenue models and community engagement.
Attention is becoming as important as the technology itself. Projects can no longer emerge out of nowhere—if they want to last, they need to find ways to connect with people and cultivate genuine followers, engaging them both practically and emotionally.
Those builders who effectively leverage this shift (transferring power from traditional venture capital and exchanges to institutions that shape narratives and mobilize supporters) will find themselves in a stronger ecosystem. They will decide which tokens thrive and which will disappear into the sea of forgotten assets.
