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Bitcoin's breakthrough of the $100,000 mark last week is undoubtedly a historic milestone. However, as this leading cryptocurrency celebrates its achievement, many altcoins have begun to outperform Bitcoin's performance, heralding the arrival of altcoin season.
Since the beginning of the year, 20 of the top 50 cryptocurrencies by market cap have outperformed Bitcoin's remarkable 124% increase. The rise in altcoin market cap, increased media attention, and the ascent of the altcoin season index further corroborate this trend. Additionally, a recent report from CCData shows that trading volume reached an annual high in November, with open interest also hitting a historical record. These signs indicate that market risk appetite is rising, which typically favors altcoins due to their higher potential for returns.
On a deeper level, investing in altcoins is essentially investing in Web3 and other blockchain-related industries. This industry is highly dependent on regulatory clarity, and post-U.S. elections, the market has become more optimistic about this. Additionally, according to the latest data from CryptoQuant, the trading volume of altcoins is not driven by BTC trading pairs. This indicates that the market is experiencing genuine growth, rather than merely a rotation of assets from Bitcoin to altcoins. It may also suggest that this altcoin season does not wait for Bitcoin price consolidation but may see both types of crypto assets rise simultaneously.
The altcoin rebound since November seems to herald a larger altcoin season in 2025. Emerging crypto trends and technologies may attract the attention of institutional investors and venture capital. Below are speculations on the potential and key narratives for the next round of the altcoin season based on on-chain data and other trends.
1. Altcoin season is not just about price
Altcoin season is typically defined as a phase where altcoins consistently outperform Bitcoin. This phase often occurs in the last year of Bitcoin's four-year cycle, when market enthusiasm spreads from Bitcoin to other coins, large-cap altcoins approach or exceed their historical peaks, and new narratives drive mid and small-cap coins to break through unknown highs. Ultimately, this phase culminates in widespread FOMO (fear of missing out), pushing the entire crypto market into an overheated state. Such overheating usually signals an impending market correction, ultimately leading to a bear market cycle.
However, the altcoin season is not just about price; it represents a comprehensive evolution of market activity, application proliferation, and innovation. So far, each round of altcoin season has reflected unique technological changes and market trends.
The first round of the altcoin season in 2017 was marked by the ICO boom and the rise of NFTs (remember CryptoKitties?). The second round of altcoin season in 2021 blended the rise of DeFi with the explosion of NFTs and gaming trends. To support these developments, cheaper and more scalable Layer 2 solutions also emerged. All these innovations have withstood the test of the crypto winter and continue to evolve.
Looking ahead, the third round of altcoin season in 2025 is expected to bring new narratives and technologies, some of which are already in development, while others have yet to emerge.
2. Indicators of Altcoin Season
Multiple indicators suggest that altcoin season is approaching. Bitcoin's dominance is declining, altcoins are outperforming Bitcoin, and their market cap has reached new highs. However, the Altcoin Season index and other related indicators show that the peak for altcoins may not have arrived yet.
In absolute terms, the total market cap of altcoins, calculated by deducting Bitcoin's market cap from the total market cap of the crypto market, has reached a historical high. According to Coingecko data, the current market cap is $1.89 trillion, surpassing the peak of $1.79 trillion set in November 2021. In relative terms, since November, Bitcoin's dominance has fallen from 60% to 51%.
However, both of these indicators include stablecoins and wrapped assets. While they are crucial for market liquidity, they may not accurately reflect the development of the altcoin market. Moreover, under bullish conditions, such assets tend to favor altcoins due to their higher risk-return characteristics.
To more purely gauge the market, Blockchain Center's Altcoin Season index excludes stablecoins and wrapped assets. This index defines altcoin season as a period in which over 75% of the top 50 altcoins have outperformed Bitcoin over the past 90 days. Recently, this index exceeded the 75% threshold on December 2 and maintained that level for a week. In the last round of altcoin season, this index stayed above the threshold for nearly three months. This supports the view that the peak of the altcoin season may occur in 2025.
The OTHERS index, calculated by platforms like TradingView, is another important measure of altcoin performance. This index tracks the total market cap of the crypto market after excluding the top ten coins (including the two largest stablecoins). Although this index has risen by 123% in the past 30 days (followed by a pullback), it has yet to reach its previous historical highs. The last time it surged from its historical peak in 2017, it increased by 525%, indicating substantial room for growth.
Finally, Google Trends also reflects interest in altcoins. With May 2021 as the peak (index 100), current search interest has risen to 87, the highest level since then.
3. Key Narratives for Altcoins in 2025
As of 2024, among the best-performing top 50 altcoins, three are Memecoins: Dogwifhat (WIF +2,027%), PEPE (+1,764%), and Dogecoin (DOGE +382%). Although Memecoins often symbolize the altcoin season, they are unlikely to define the mainstream narrative of the crypto market in 2025.
According to Blockchain Center data, among the new technologies emerging in 2023-2024, BRC-20 tokens have performed the best. While some do not consider them true altcoins, these tokens issued on the Bitcoin blockchain through technologies like Ordinals or Runes have seen an increase of over 1000% this year. In the more traditional altcoin category, RWAs (Real World Assets tokenization) lead with a 717% annual growth rate, including tokenized versions of real-world assets and their supporting protocols. Following closely are AI-related tokens (+513%) and DePIN (Decentralized Physical Infrastructure, +303%).
By 2025, new narratives are likely to emerge, and venture capital trends may reveal the most promising directions. According to Pitchbook data, venture capital in the crypto space performed relatively modestly in 2023 ($10 billion), with a total of $7.1 billion in Q3 2024. Next year, its activity may rebound to levels seen in 2021 and 2022, reaching $25.3 billion and $29.4 billion, respectively. This influx of capital will flow into specific projects and broader sectors, driving the next wave of growth.
Lastly, please note that in the excitement of the altcoin season, it is essential to avoid being swept up in market speculation. Every bull market ultimately ends with a correction (turning bearish), and only tokens with strong fundamentals and real-world applications can survive in the next cycle.