Original author: Nancy, PANews
With the gradual warming of the secondary market, the structure of the cryptocurrency ecosystem is undergoing subtle changes, and market liquidity is gradually withdrawing from on-chain activities. In the bull market atmosphere, many projects are accelerating their pace to launch their tokens in an attempt to attract more capital and user attention. At the same time, the strong performance of multiple sectors' cryptocurrency projects has further stimulated investment sentiment, and the market's expectation for 'altcoin season' is becoming increasingly strong as everyone begins to seek out potential cryptocurrency assets.
DeFi and L1 are the main forces in token issuance, and token allocation strategies are undergoing optimization adjustments.
Recently, multiple projects in the cryptocurrency market have announced token issuances one after another. PANews has counted 21 cryptocurrency projects that have recently officially announced TGE, covering sectors such as DeFi, L1, NFT, L2, and DAO, with DeFi and L1 projects being the mainstay of token issuance, accounting for nearly half of the projects from these two sectors.
From publicly available information, these projects are generally favored by the capital market, with total financing amounting to over $620 million, involving well-known investors such as Polychain, Binance Labs, Coinbase Ventures, Dragonfly, Wintermute, Alliance DAO, GSR, and DeFiance Capital. VC endorsement is often regarded as an important symbol of a project's reliability and potential, adding more credibility and promise to these projects.
However, alongside capital involvement, the previous issue of continuous price decline due to high FDV and low circulation has gradually triggered strong dissatisfaction and controversy in the market. In the face of this dilemma, market attention has begun to shift significantly, including a turn towards relatively fair and decentralized cryptocurrency assets, such as MEME coins. For example, 10x Research recently released a report stating that the Google search trend for 'Meme Coins' has reached an all-time high, surpassing the previous peak in March 2024. This data also indirectly confirms that investors at this stage are relatively more inclined toward community-driven and fairer investment opportunities.
In terms of token distribution, many projects have begun to adjust previous issues of low initial circulation to avoid the dilemma of limited sustainable upward space caused by high FDV. For example, Movement has an initial circulation of 22%, Side Protocol is at 22.9%, and Zircuit reaches 21.95%. This change reflects the market's reflection on the low circulation and high FDV model, especially in such projects where ordinary investors often become the 'sacrificial victims' of liquidity exits.
Moreover, token allocation strategies are increasingly focused on ecosystem building and community participation. For example, Bluefin will allocate 52% of the total token supply for ecosystem growth, Movement will allocate 40% to the ecosystem and community, Magic Eden will allocate 37.7% to the community and ecosystem, and Usual will allocate 90% of its tokens to the community. Such strategies help enhance the project's community cohesion and market competitiveness, as well as better launch the project's long-term development.
Particularly in terms of airdrop intensity, the average token airdrop ratio for these 21 projects reached 14.9%, with Suilend, Hyperliquid, Zircuit, Swan Chain, and WalletConnect reaching 40%, 31%, 21%, 20%, and 18.5%, significantly exceeding the average. Especially Hyperliquid, with an average airdrop value of $28,500 per person, has become one of the largest airdrop projects in cryptocurrency this year. Airdrops, as an effective means to attract and incentivize community members, continue to play an important role in project promotion, providing substantial returns for early supporters and effectively enhancing the project's influence and visibility.
Multiple factors may help the return of altcoin season, but it cannot rely solely on the effect of Bitcoin.
The frequent announcements of token issuances by cryptocurrency projects are closely related to the market's recovery and the loose policy environment in the United States. Recently, as Bitcoin continues to rise, mainstream public chains, DeFi, metaverses, L2, and gaming sectors have all experienced a strong rebound. At the same time, the PVP competition in the MEME market has intensified, deterring many players, and market attention is gradually shifting towards the secondary market.
'Altcoin season may be starting,' top trader Eugene stated recently.
According to the latest report released by Bitfinex, the overall cryptocurrency market has reached a new cycle high, with the market capitalization of altcoins now approaching the $984 billion peak from May 2021, indicating that speculative funds are shifting from Bitcoin to altcoins. Historically, this kind of fund rotation usually heralds the arrival of 'altcoin season,' where the gains of altcoins outshine those of Bitcoin. Cryptocurrency analyst Mikybull Crypto stated that Bitcoin's dominance in the cryptocurrency market has fallen below its two-year support line, which may indicate that the market has 'officially entered altcoin season.' The decline in Bitcoin's dominance means that investors are taking profits from their BTC positions and reallocating some of their funds to altcoins.
QCP also pointed out that the recent decline in Bitcoin's market capitalization reflects a trend where funds may gradually shift from BTC to ETH and other altcoins. Additionally, data disclosed by IntoTheBlock shows that in November, there was a record net outflow of stablecoins from CEX since April, amounting to approximately $4.5 billion. Coupled with strong price performance, it indicates that traders are locking in profits, and these funds may be redeployed into altcoins or held as reserves against potential future declines.
Furthermore, as the cryptocurrency market gradually moves towards the mainstream, the United States' loose cryptocurrency policy environment has also sparked optimistic sentiment in the market regarding the overall development of the industry, including altcoins. According to previous reports from PANews, the recent unveiling of Trump's new government members has shown that many of them publicly express a friendly attitude towards cryptocurrencies, which may bring about more positive policy expectations for the industry. In particular, the upcoming departure of Gary Gensler, chairman of the SEC, is seen as a change that may provide more space for the further development of the cryptocurrency industry. Notably, with the ETF applications for currencies such as Solana, XRP, and LTC, market expectations are increasingly high.
However, CryptoQuant CEO Ki Young Ju also pointed out that compared to the previous bull market, the current rise in Bitcoin is mainly driven by institutional investors and spot ETF demand. These funds are different from cryptocurrency exchange users and have no intention of reallocating assets from Bitcoin to altcoins. At the same time, since institutional investors primarily operate outside of exchanges, asset rotation becomes less likely. While institutions may allocate mainstream altcoins through investment tools such as ETFs, small-cap altcoins still rely on retail users from exchanges. For altcoin projects to reach new highs in total market capitalization, a large influx of new funds into exchanges is required, but the current levels are below historical peaks, indicating a decrease in liquidity brought by new users. Therefore, altcoin projects should focus on developing independent strategies to attract new funds rather than relying on the momentum brought by Bitcoin.
