The altcoin market has encountered huge challenges in the current environment. Except for a few sectors such as meme and AI, and projects such as SOL that are expected to take over ETFs, most altcoins have experienced disastrous performance. This situation is mainly caused by the following three reasons:

First, the approval of ETFs has changed the capital flow path of the market. Traditionally, incremental funds usually enter the market through the path of "stablecoins - BTC, ETH - altcoins". However, nowadays, incremental funds from traditional markets prefer to invest in BTC directly through ETFs, resulting in funds no longer flowing into the altcoin market as in the past, leading to insufficient liquidity.

Second, the continuous unlocking of VC tokens has led to continuous selling pressure. This situation has caused the market supply of some altcoins to exceed market demand. Although the prices of some tokens have continued to fall, their circulating market value has continued to set new highs.

Third, new projects that opened at sky-high prices continue to absorb the remaining liquidity in the market. Projects such as ZKsync, LayerZero, Blast, etc. have been launched on a large scale, and their general valuations are at the billion-dollar level, further exacerbating the liquidity problem in the altcoin market.

Despite these challenges, some industry leaders remain optimistic about the future performance of altcoins. For example, Rich Rosenblum, co-CEO and co-founder of cryptocurrency market maker GSR, said that altcoins will make a comeback and are expected to return strongly.