Bitcoin, as the leading cryptocurrency, holds significant historical importance. However, as Bitcoin celebrates its achievements, many altcoins have begun to outperform Bitcoin, signaling the arrival of altcoin season.
Since the beginning of the year, 20 out of the top 50 cryptocurrencies by market capitalization have outperformed Bitcoin’s gain of up to 124%. The increase in altcoin market capitalization, growing media attention, and the rise of the altcoin season index further confirm this trend. Moreover, CCData's report indicates that trading volumes in November reached an annual high, and open interest hit record levels, suggesting an increase in market risk appetite, which is more favorable for altcoins with a higher potential for returns.
On a deeper level, investing in altcoins is essentially investing in Web3 and other blockchain-related industries. This sector relies on regulatory clarity, and the market has become more optimistic after the U.S. elections. Additionally, according to CryptoQuant data, altcoin trading volumes are not driven by BTC trading pairs, indicating that the market is genuinely growing, not just a transfer of assets from Bitcoin to altcoins, and both types of crypto assets may rise simultaneously.
The altcoin rebound since November seems to indicate a larger scale of altcoin season in 2025. Emerging crypto trends and technologies may attract attention from institutional investors and venture capital. Below, based on on-chain data and more, we speculate on the potential and key narratives for the next round of altcoin season.
Altcoin season is not just about price increases
Altcoin season typically refers to the phase where altcoins consistently outperform Bitcoin, generally occurring in the final year of Bitcoin's four-year cycle. At this time, market enthusiasm spreads from Bitcoin to other cryptocurrencies, with large-cap altcoins nearing or exceeding historical peaks, and new narratives driving mid- and small-cap coins to breakthrough new highs, ultimately reaching a climax due to FOMO sentiment, causing the entire crypto market to overheat, followed by a market correction and entry into a bear market cycle.
However, altcoin season is not just about price; it also represents comprehensive development in market activity, application proliferation, and innovation. The first wave of altcoin season in 2017 was marked by the ICO boom and the rise of NFTs, such as CryptoKitties. The second wave in 2021 integrated the rise of DeFi, the NFT and gaming craze, while Layer 2 solutions emerged, with these innovations surviving the crypto winter. Looking ahead to the third round of altcoin season in 2025, it is expected to bring new narratives and technologies.
The Indicator of Altcoin Season
Multiple indicators suggest that altcoin season is approaching. Bitcoin's dominance is declining, and altcoins are outperforming Bitcoin and reaching new highs, but indicators like the Altcoin Season Index suggest that the peak for altcoins may not have arrived yet.
In absolute terms, the total market capitalization of altcoins, excluding Bitcoin's market cap, has reached a historical high of $1.89 trillion, according to Coingecko data, surpassing the peak of $1.79 trillion in November 2021. In relative terms, since November, Bitcoin's dominance has decreased from 60% to 51%. However, these two metrics include stablecoins and wrapped assets, which, while important for market liquidity, do not accurately reflect the development of the altcoin market. The Altcoin Season Index from Blockchain Center excludes these assets, and this index showed that on December 2, it broke through the 75% threshold and maintained that level for a week, having previously sustained for nearly three months, supporting the view that the peak of altcoin season may occur in 2025.
The OTHERS index calculated by platforms like TradingView is also an important indicator of altcoin performance, tracking the total market capitalization of the crypto market excluding the top ten coins. This index rose 123% over the past 30 days before a pullback, not reaching historical highs, but still has room for growth; the last time it rose from the historical high in 2017 was 525%.
Moreover, Google Trends shows that interest in altcoins has risen to 87 after peaking in May 2021, reaching its highest level.
Key Narratives for Altcoins in 2025
Among the top 50 altcoins performing best in 2024, Memecoins like Dogwifhat, $PEPE and Dogecoin have seen significant gains, but they are unlikely to dominate the narrative of the crypto market in 2025.
According to Blockchain Center data, among new technologies in 2023-2024, BRC-20 Tokens have performed the best, though some do not consider them true altcoins. With related technologies, their gains have exceeded 1000% within the year. Among traditional altcoins, RWAs lead with a 717% annual growth rate, followed by tokens related to artificial intelligence and DePIN.
By 2025, new narratives may emerge, and venture capital trends could reveal promising directions. Pitchbook data shows that venture capital in the crypto space reached $10 billion in 2023, with a cumulative $7.1 billion in the third quarter of 2024. It may rebound to the levels of 2021 and 2022 next year, and the growth in funding will drive the next wave of growth.
It is important to note that during the altcoin season frenzy, do not be swayed by market hype. Each bull market will see corrections; only tokens with strong fundamentals and real application scenarios can survive in the next cycle. #山寨季何时到来？
