The first half of 2025 marked one of the worst performances ever for altcoins, which saw their prices plummet with losses of up to 90% from the annual highs. After a promising start to the year, the lack of significant innovation and the return of risk-off among investors severely penalized the sector, further strengthening the leadership of Bitcoin.
This analysis is based on the official data from the 2025 semi-annual report of CoinGlass, which documents the reasons for the altcoin crisis and the impacts on investor sentiment.
Altcoin market: an unprecedented correction
Some of the main altcoins, such as Solana, Avalanche, Polkadot, and Cardano, have suffered heavy losses. Solana, in particular, has plummeted from about $295 to $113 between January and April, with a drop of over 60%, while other altcoins have recorded declines of even 90% compared to the annual highs.
According to CoinGlass, most altcoins have reached lower price levels than those seen during the 2022 corrections, highlighting a growing risk aversion towards more volatile assets.
The causes of the altcoin crisis
1️⃣ Lack of technological innovation
The ecosystems of many altcoins did not show significant progress or new applications capable of attracting market attention in the first half of the year. The narrative of “Ethereum killer” has been progressively weakened.
2️⃣ Bitcoin Dominance
Bitcoin has catalyzed the majority of institutional flows thanks to spot ETFs and its perception as a safe haven asset, leaving altcoins in the background.
3️⃣ Macro and geopolitical sentiment
The intensification of geopolitical tensions and the uncertain monetary policy of the Federal Reserve have led investors to reduce exposure to the riskier assets.
4️⃣ Internal competition
Even within altcoins, the competition among layer-1 has become more fierce, with no project clearly emerging as the winner, fragmenting the demand.
Altcoins remain “crypto‑native”
The CoinGlass report highlights how the role of altcoins remains tied to “crypto-native” dynamics: they are still perceived as tools for retail and speculation, rather than institutional allocation assets like Bitcoin.
Altcoins are increasingly behaving like volatile tech stocks, vulnerable to cycles of hype and disillusionment. Without a new “killer use case” or significant technological advancements, their ability to attract capital remains limited.
Derivatives on altcoins: liquidity contraction
Not only have spot prices experienced significant declines, but the derivatives markets on altcoins have also shown a contraction in liquidity. According to CoinGlass, open interest on altcoins has decreased drastically compared to the peaks of 2024, indicating a cooling of interest even from the most aggressive traders.
Outlook for the second half of 2025
Without a clear ecosystemic innovation or a strong recovery in retail sentiment, the weakness of altcoins could continue into the second half of the year. However, potential technological developments or new business models — for example, related to DeFi or NFT — could act as a catalyst for a selective rebound.
Conclusion
The first half of 2025 highlighted the structural weaknesses of altcoins: high volatility, lack of a unified vision, and low appeal for institutional investors.
Investors who want to gain exposure to the sector should adopt an extremely selective approach, focusing only on projects with solid foundations and clear prospects. The risk remains high, but depressed prices could offer opportunities for those with a long-term horizon.
