Funds Steadily Await Bitcoin, Are Altcoin Rotations Coming to an End?
In the past, the crypto market followed the script of 'Bitcoin leading the charge, altcoins rotating': in 2017 and 2021, after attracting funds, altcoins surged, and the market thrived. However, in 2025, this model seems to have failed.
ETF Lockup and Liquidity Drain
Institutional funds in Bitcoin ETFs are primarily held, not speculative, leading to a decrease in liquidity. The market capitalization of altcoins accounted for 38.7% in 2021, dropping to 14.2% in 2025. MicroStrategy holds over 300,000 Bitcoins, allowing institutions to profit indirectly through its stock without risking investment in altcoins.
Proliferation and Dilution of Altcoins
The number of altcoins has surged from thousands in 2021 to 12 million in 2025, with MEME coins and junk tokens flooding the market. On the SOL chain, 870,000 MEME tokens were issued in 2024, with only 3.7% surviving beyond 30 days, resulting in heavy losses for retail investors and difficulty in capital recovery.
New Rules for the PVP Model
The market has entered a 'player versus player' phase, where early entrants profit, and later entrants become 'exit liquidity'. The strategy of 'buy-hold-wait for rotation' has failed; Binance's CZ claims that 99% of traders holding Bitcoin have higher returns. A few quality projects may welcome a 'selective market'.
Strengthening of Bitcoin's Dominance
The inflow of ETFs and institutional funds has made Bitcoin resemble 'digital gold', reducing volatility and increasing its dominance. In the market transformation of 2025, most altcoins will be eliminated, while quality projects need real use cases and community support to survive. Investors must adapt to new rules to avoid becoming 'exit liquidity'.
