The probability of another altcoin bull market is zero

As the impact of trade frictions gradually diminishes, the crypto market begins to rebound from its bottom. In the past week, market leverage demand surged: the OKX USDT lending rate once skyrocketed to 39% (a new high for the year), and the short-term investment yields across platforms generally increased by 2-3 percentage points. On the surface, the profit effect in the market is spreading from Bitcoin to altcoins. According to CoinMarketCap data, since April 8, the median increase for the top 100 cryptocurrencies by market cap has been 38%, surpassing Bitcoin's 28%, which means that the vast majority of altcoins have outperformed Bitcoin in this rebound. So, does this indicate that an altcoin bull market is imminent?

Although the corrective trend of altcoins has not yet ended, I believe the probability of a comprehensive altcoin bull market re-emerging is extremely low, for the following main reasons:

1. From past experience, when the barriers to entry gradually dissolve (anyone can issue coins) and the supply of underlying assets continues to expand, it creates dual pressure that inevitably leads to a headwind effect for capital—high-quality projects not only capture market liquidity but also create structural valuation premiums (trends towards US and Hong Kong stock markets). Taking the Nasdaq market as a reference, its top 7 leading companies not only consistently account for 50%-60% of market capitalization but also capture 30%-40% of trading volume, while enjoying a valuation premium of 20%-30% (measured by price-to-earnings ratio). Although there will be adjustments among leading companies, the characteristic of 'winner takes all' has not changed.

2. According to Coinglass data, the peak daily transaction volume of the crypto market in March 2024 and November 2024 is around $600 billion, which is comparable to the level when the bull market peaked in November 2021. This means that over the past four years, the market's maximum purchasing power has not grown. This predicament usually indicates that the phase of large-scale capital inflow has ended (the demographic dividend period is over).

Of course, even in mature markets, there are still speculative opportunities, just as the US stock market often sees speculative targets like GME and AMC while tech giants lead the way. Therefore, while BTC, ETH, SOL, and XRP enter a slow bull phase, the speculation around themes like MEME and AI will continue. But one thing is certain: structural market trends will be the long-term main theme.