In the past few rounds of the cryptocurrency market bull run, altcoins frequently exhibited a "rising tide lifts all boats" pattern—whenever the market started to rally, a large number of tokens would collectively surge, often increasing several times or even dozens of times. However, as the market structure matures, regulatory rules become clearer, and investor preferences gradually shift towards "institutionalization," the logic of widespread altcoin rallies is quietly disintegrating. Today's cryptocurrency market resembles a battlefield filled with "structural opportunities," where the strong continue to thrive and the weak sink, with only a few projects able to consistently attract funds and attention.

1. The End of an Era: Widespread Altcoin Rallies Are Hard to Replicate

During the bull market driven by DeFi and NFTs from 2020 to 2021, market sentiment was extremely exuberant, and risk appetite peaked. Whether it was "meme coins" without fundamental support or "shitcoins" from decentralized exchanges, they could easily achieve hundredfold increases, creating a phenomenon of widespread rallies across the industry. Behind this was, on one hand, an overflow of liquidity, and on the other, a "narrative-driven" market pricing.

However, since the second half of 2024, this situation has gradually changed. The market capitalization share of mainstream coins like Ethereum and Bitcoin continues to rise, while the performance of most altcoins remains relatively weak. Even when the overall market occasionally rebounds, only a very few projects with clear fundamental support, active teams, or those linked to hot narratives like AI and RWA can rise, while other projects remain like the "silent majority," with little to no movement.

This not only indicates that market risk appetite is decreasing but also that investors are transitioning from a "greater fool theory" mentality to a "selective strategy." The logic of widespread altcoin rallies—based on short-term speculation and liquidity—faces structural disintegration.

2. A New Era Begins: Structural Markets Become the Main Theme

The current cryptocurrency market increasingly resembles a "structural bull market" in traditional finance: it is not the overall index that rises, but rather funds rotate around a few leading assets or hot sectors. In this market, investors can no longer achieve returns by blindly "casting nets" but must enhance their coin selection abilities and closely follow the main narrative.

Looking at recent market hotspots, whether it’s protocols combining with real-world assets (RWA), AI-driven blockchain applications, or projects building new ecosystems in the Bitcoin Layer 2 space, the increases are often concentrated in one or two leading coins, while other "followers" have almost no effective market movement. This phenomenon clearly indicates that market funds are becoming more rational, concentration is significantly increasing, and only tokens supported by a combination of narrative, fundamentals, and strong consensus can continue to attract attention.

This structural market characteristic also means that altcoin investment has shifted from "gambling speculation" to "cognitive games": factors such as project fundamentals, team execution capabilities, real income of protocols, and governance structures are beginning to become important bases for valuation judgments.

3. Regulatory and Compliance Pressures Further Squeeze Speculative Space

Another variable that cannot be ignored is the changing global regulatory environment. The clear stance of the U.S. "GENIUS Act" on stablecoin regulation signifies the official start of the "regulatory year" for the cryptocurrency market. Countries are also gradually building compliance systems to pave the way for more institutional funds to enter mainstream assets, but at the same time, they are compressing the survival space for smaller coins.

Stricter regulations will directly affect the issuance thresholds for altcoins, exchange listing standards, and user participation enthusiasm. Projects without real application scenarios, questionable code quality, or those suspected of being securities will be washed out, and may even fail to enter mainstream exchanges. The era where merely "painting a picture" could harvest traffic is quietly fading away.

4. Conclusion: From "Retail Investor Paradise" to "Professional Investor Arena"

Overall, the cryptocurrency market is gradually moving away from the "frenzied bubble" phase towards a more mature and prudent pricing system. Altcoins are no longer a land of gold but a game for winners in an elite track. For investors, this is both a challenge and an opportunity—losing the path to blind wealth but gaining space for rational allocation.

In the future, there may still be stories of altcoins soaring, but those will resemble breakthroughs of individual star projects rather than a widespread rally across the entire industry. In this new cycle, understanding structure, selecting main narratives, and following value are the core capabilities that participants should cultivate.

Related: Circle's USDC Will Become Qualified Collateral for U.S. Futures Trading

Original: “Altcoins May Never See Broad Rallies, Market Enters 'Structural Market' Era”

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