┈➤The Contradictions of the Altcoin Season and the Redundancy of VC Coins

╰✦In Fact, the Altcoin Season Came in 2025

Around May to August 2025, BTC was rising while its market share was declining. During this phase, the market share of altcoins was increasing.

BTC was rising, and the total market cap of altcoins was growing more; this is what the altcoin season is.

╰✦Redundancy of VC Coins

The contradiction of the altcoin season lies in the increase of total market capitalization, but the market had no awareness of the altcoin season.

This is because the total market capitalization of altcoins was increasing, but there were simply too many altcoin types, resulting in most individual altcoins not experiencing significant rises.

Thus, the key issue of the 2025 altcoin season is — the redundancy of VC coins.

So the question arises, why were there so many VC coins in 2025?

╰✦Dissonance of VC Coin Liquidity in Primary and Secondary Markets

The normal route should be that VCs first invest, then enter the secondary market after the token TGE, facing the much larger liquidity of the secondary market, leading to price increases.

However, this round of market conditions saw a liquidity dissonance between the primary and secondary markets.

◆The Reason for VC Coin Redundancy is Excess Liquidity

Between 2021 and 2022, there was a large amount of VC investment in the primary market, both in amount and number of projects.

Financing during other time periods generally concentrated within 1 to 2 months, but from 2021 to 2022, there was much financing, with a prolonged duration.

We can say that this is a redundancy of financing caused by excess macro liquidity, which is the fundamental reason for the redundancy of VC coins in this market cycle.

◆The Reason for Poor Price Performance of VC Coins is Lack of Liquidity in the Secondary Market

However, whether it is the previous M2 year-on-year growth rate or financing data, all indicate that after the TGE of these redundant VC coins in 2025, market liquidity is decreasing.

Thus, a time dissonance of liquidity between the primary and secondary markets was formed. A large number of VC coins have excessive liquidity during the financing stage in the primary market, while in the secondary market stage after the TGE, liquidity is scarce.

Of course, there are many reasons for the scarcity of liquidity in the secondary market, which will be discussed in the next article.

╰✦Summary

The key issue is that the liquidity dissonance between VC coins in primary and secondary markets has led to too many VC coins during the 2025 altcoin season, with selling pressure relatively high, while buying power is inadequate, resulting in poor price performance.

┈➤Altcoins/VC Coins Will Not Disappear

╰✦VC Coin Financing Continues with Caution

This is still the previous VC financing chart. It can be seen that in 2025, many projects still received financing. Both the total amount of financing and the number of projects are far lower than in 2021. On one hand, this may be due to relatively tighter macro liquidity, and on the other hand, it also reflects VCs' cautious attitude in investment activities.

However, one point to note is that in 2025, approximately 75 projects received financing on average each month. The amount and number of VC financing in 2025 are higher than in 2017-2018. This reflects one point: when we ignore the redundancy of VC coin financing in 2021, the financing of altcoins/VC coins is still making progress.

After this round of bear market is over, there will not be as many redundant new coins as in 2025 once VC coins once again undergo TGE. Unless macro liquidity remains inadequate, otherwise the next round of altcoin trends may fall into a state between the madness of 2021 and the coldness of 2025.

╰✦Web3 Finance Still Holds Nearly $100 Billion Scale

First, in the financial sector, a large number of TradFi institutions have joined Web3. This aspect does not even require examples.

Currently, the total locked value (TVL) across the network is still $92.831 billion, which is approximately equivalent to the level of March to April 2021.

╰✦Technology Companies and Web3 are Continually Merging

✦Examples of Tech Giants Participating in Web3

In the non-financial sector, technology giants are also participating in Web3. For example:

Google is deeply involved in the Hedera ecosystem, being a network node of Hedera and also a member of its governing council. Members of the Hedera governing council also include IBM, Boeing, and Nomura Securities. Google has also integrated Hedera's ledger data into BigQuery, allowing developers to query Hedera blockchain data using SQL. (Blockchains are not relational databases and do not directly support SQL; generally, SQL can only be used after indexing).

Google is also one of the nodes of Midnight (a privacy-focused Cardano side chain) and provides developers with tools to quickly deploy Midnight nodes using Google Cloud.

NVIDIA has recently facilitated cooperation between its AI development platform Brev.dev and the dePIN project Akash. Developers can choose to utilize Akash's computing power when developing AI on Brev.dev.

Microsoft has directly developed a Bitcoin layer two DID network — ION.

Telegram leads the TON ecosystem.

Sony has directly launched the Layer 2 entertainment infrastructure Soneium……

✦Web3 Serving Web2 and AI Examples

On the other hand, some Web3 projects are also serving the Web2 domain and AI. For example:

Bittensor Subnet provides incentives for AI development, promoting the growth of the AI ecosystem.

Aethir serves hundreds of enterprise clients, including cloud gaming and AI.

VeChain serves companies like Walmart and BMW, providing on-chain traceability services.

Polkadot also has some enterprise-level or institutional-level service recipients, such as the Polytechnic University of Milan…

╰✦Summary

VC is still continuing to invest in Web3, which means that VC projects still have some funding and motivation to innovate in technology and product development… and the number and amount of VC investments are higher than in 2017 and lower than in 2021, reflecting the cautious growth of VC investments.

The integration of finance and Web3 spans multiple areas, including DeFi, RWA, and stablecoin payments. Technological institutions and Web3 are also merging.

All of these indicate that altcoins/VC coins will not vanish.

┈➤The Trend of Altcoins/VC Coins toward U.S. Stocks

╰✦The "Nasdaq-ization" of Exchanges

On March 25, 2026, Binance released the "Risk Warning for Crypto Market Makers and Guidelines for Projects and Users."

Among them, five risky behaviors or phenomena of market makers were proposed: aggressive selling and unlocking conflicts, unilateral trading behaviors, mismatch of volume and price, insufficient liquidity or depth, and imbalance between trading volume and liquidity.

In response to these risks, Binance's measures include:

First, advising project parties. Project parties are advised to conduct scientific due diligence before and during cooperation with market makers, assess and monitor risks to ensure proper risk management.

Second, standardizing project parties. Project parties are required to strictly adhere to token release schedules, refrain from any disruptive market token actions, promptly disclose market maker information to the platform, avoid collusion with third parties to manipulate prices or liquidity, thoroughly screen partners, clearly define executable operations in contracts with market makers, and continuously monitor market maker behaviors after listing.

Third, the platform continuously monitors and manages market makers. Binance promises to "continuously monitor market-making activities and take swift and decisive actions against any violations, including blacklisting violating market makers."

From then on, Binance has further played a regulatory role in promoting market health on the basis of accepting regulation and compliance. This trends the platform toward "Nasdaq-ization".

In the stock market, exchanges like Nasdaq serve as both a platform for stock issuance and trading, and they also deeply engage in market regulation.

In contrast, crypto exchanges often can only assume the latter role, that is, as a trading platform for tokens. Meanwhile, token issuance is based on blockchain. This is one of the bottlenecks for crypto exchanges, making it difficult to regulate token issuance, on-chain circulation, and trading.

As the largest exchange globally, Binance's constraints and regulation of market maker behavior will bring very positive significance to the crypto market, benefiting retail investors' rights.

As a leader in the crypto industry, Binance's actions are likely to gain support from more platforms, project parties, and users, and more platforms will learn from Binance's management strategies for market makers. This means that the crypto market as a whole will trend toward "Nasdaq-ization".

This is a future that is more favorable to retail investors, healthier, and more promising.

╰✦The U.S. Stock Trend of the Altcoin Market

In terms of token issuance: With the addition of more traditional financial institutions and technology giants, as well as more cautious VC investment behaviors, it is very likely that only relatively higher quality VC coins will be issued. The phenomenon of mass issuance of VC coins of varying qualities, as seen in 2025, should be greatly improved.

In terms of token trading: Binance, as one of the leaders in the crypto market, is strengthening control over the risky behaviors of market makers. It is highly probable that other platforms will imitate or draw lessons from this, leading the token trading market to gradually reduce market manipulation and harvesting behaviors, thus shifting toward a relatively healthy trading ecosystem akin to U.S. stocks.

At the KOL level: As the number of VC coins decreases, the demand for token advertising will shrink. More and more bloggers will enter the KOL ranks, and during each bear market, some vacant business developers will start transitioning to become KOLs, thus increasing the supply side for token advertising. This implies intensified competition in the token advertising market. KOLs with more differentiation, better analytical abilities, and correct values may find it easier to succeed in the competition, which is also beneficial for the health of the industry.

At the market trend level: A simple four-year cycle trading strategy may not yield much return. The significance of the four-year cycle may gradually weaken. BTC might show some degree of synchronization with U.S. stocks. The concentration of VC coins for TGE may also weaken.

At the retail investor level: The probability and odds of trading may have some relationship with cognition.

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