Written by: Nancy, PANews.
As the secondary market gradually warms up, the structure of the crypto ecosystem is undergoing subtle changes, with market liquidity gradually withdrawing from on-chain activities. In the bullish market atmosphere, many projects are accelerating their pace to launch their own tokens, attempting to attract more capital and user attention. Meanwhile, the strong performance of multiple sectors' crypto projects has further stimulated investor sentiment, and the market's expectation for 'altcoin season' is growing stronger, with many starting to look for potential crypto assets.
DeFi and L1 are the main forces behind token issuance, and token distribution strategies are being optimized and adjusted.
Recently, the crypto market has witnessed several projects announcing token issuances. PANews has compiled a list of 21 crypto projects that recently officially announced their TGE, covering sectors such as DeFi, L1, NFT, L2, and DAO, among which DeFi and L1 projects are the main forces behind token issuance, with nearly half of the projects coming from these two tracks.
From publicly available information, these projects are generally favored by the capital market, with a cumulative financing amount exceeding $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 seen as an important symbol of a project's reliability and potential, adding more credibility and potential to these projects.
However, while capital is entering, the previously ongoing issue of continuous price declines due to high FDV and low circulation has gradually triggered strong dissatisfaction and controversy in the market. In the face of this predicament, market attention has begun to shift significantly, including moving toward relatively fair and decentralized crypto assets, such as MEME coins. For instance, 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, at this stage, investors are relatively more inclined toward community-driven and fairer investment opportunities.
From the perspective of token distribution, many projects have begun to adjust the previously low initial circulation issues to avoid the dilemma of limited sustainable upside potential caused by high FDV. For example, Movement's initial circulation is 22%, Side Protocol is 22.9%, and Zircuit reaches 21.95%. This change reflects the market's reflection on the low circulation and high FDV model, especially in these types of projects, where ordinary investors often become the 'victims' of liquidity exits.
Moreover, token distribution strategies are increasingly focused on ecosystem construction and community participation. For example, Bluefin allocates 52% of its total token supply for ecosystem growth, Movement allocates 40% of its total supply to the ecosystem and community, Magic Eden allocates 37.7% of its total supply to the community and ecosystem, and Usual allocates 90% of its tokens to the community. Such strategies help enhance the community cohesion and market competitiveness of projects and better support the long-term development of projects.
Especially regarding airdrop efforts, the average airdrop ratio of these 21 projects reaches 14.9%, with Suilend, Hyperliquid, Zircuit, Swan Chain, and WalletConnect reaching 40%, 31%, 21%, 20%, and 18.5%, respectively, significantly exceeding the average. Notably, Hyperliquid, with an average airdrop value of $28,500 per person, has become one of the largest crypto projects in airdrop scale 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 contribute to the return of altcoin season, but it cannot solely rely on the driving effect of Bitcoin.
The intensive announcements of token issuances by crypto projects are closely related to the warming market and the loose U.S. policy environment. Recently, as Bitcoin continues to rise, mainstream public chains, DeFi, metaverse, L2, gaming, and other sectors have seen a strong rebound. At the same time, the intensification of PVP competition in the MEME market has discouraged many players, and market attention is gradually shifting to the secondary market.
'Altcoin season may be about to begin,' 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 close to the $984 billion peak of May 2021, indicating that speculative funds are shifting from Bitcoin to altcoins. Historically, such a rotation of funds usually heralds the arrival of 'altcoin season', where the gains of altcoins relative to Bitcoin are more pronounced. Crypto analyst Mikybull Crypto stated that Bitcoin's dominance in the crypto market has fallen below its two-year support line, suggesting that the market has 'officially entered altcoin season'. This decline in Bitcoin's dominance means investors are taking profits from their BTC positions and reallocating some funds into altcoins.
QCP also pointed out that the recent decline in Bitcoin's market capitalization reflects a trend where funds may gradually be shifting from BTC to ETH and other altcoins. According to data disclosed by IntoTheBlock, November saw the highest net outflow of stablecoins from CEX since April, amounting to about $4.5 billion. Coupled with strong price performance, this indicates that traders are locking in profits, and these funds may be redeployed into altcoins or kept as reserves to respond to future downturns.
Additionally, as the crypto market gradually moves toward the mainstream, the U.S.'s lenient crypto policy environment has also sparked optimistic sentiments about the overall industry development, including altcoins. According to previous reports by PANews, the recent unveiling of Trump's new government member list has gradually come to light, with many openly expressing a friendly attitude toward cryptocurrencies, which may bring more positive policy expectations for the industry. Notably, the upcoming departure of Gary Gensler, the chairman of the U.S. SEC, is seen as potentially providing more space for the further development of the crypto industry. It is particularly worth mentioning that with ETF applications for currencies such as Solana, XRP, and LTC, market expectations are rising.
However, CryptoQuant CEO Ki Young Ju also noted that compared to the last bull market, the current rise in Bitcoin is primarily driven by institutional investors and spot ETF demand, which are different from users of cryptocurrency exchanges and are not inclined to shift assets from Bitcoin to altcoins. At the same time, since institutional investors mainly operate outside exchanges, asset rotation becomes less likely. While institutions may allocate mainstream altcoins through investment tools like ETFs, small-cap altcoins still rely on retail users on exchanges. For altcoins to reach new highs in total market capitalization, a significant influx of new funds into exchanges is needed, but the current levels are below historical highs, indicating reduced 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.
