Image source: Plain Blockchain
Bitcoin's breakout above $100,000 last week is undoubtedly a historic milestone. However, as this leading cryptocurrency celebrates its achievement, many altcoins have begun to outperform Bitcoin, signaling the arrival of the Altcoin Season.
Since the beginning of the year, 20 of the top 50 cryptocurrencies by market cap have surged past Bitcoin's remarkable 124% increase. The rise in altcoin market cap, increased media attention, and the climb of the Altcoin Season Index further corroborate this trend. Additionally, a recent report from CCData indicates that November's trading volume reached a new annual high, with open contracts also setting historical records. These signs suggest that the market's risk appetite is on the rise. Such changes tend to favor altcoins, as they offer higher potential returns.
On a deeper level, investing in altcoins is essentially investing in Web3 and other blockchain-related industries. This industry heavily relies on regulatory clarity, and following the U.S. election, the market has become increasingly optimistic about this. Furthermore, according to the latest data from CryptoQuant, the trading volume of altcoins is not driven by Bitcoin trading pairs. This means that the market is experiencing genuine growth, rather than just a rotation of assets from Bitcoin to altcoins. This could also mean that this Altcoin Season may not wait for Bitcoin prices to consolidate but could see both categories of crypto assets rising simultaneously.
The altcoin rebound since November seems to signal that 2025 will witness a larger-scale Altcoin Season. Emerging crypto trends and technologies may attract the attention of institutional investors and venture capitalists. 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. The Altcoin Season is not just about prices
The Altcoin Season is typically defined as a phase where altcoins consistently outperform Bitcoin. This phase often occurs in the final year of Bitcoin's four-year cycle, when market enthusiasm spreads from Bitcoin to other coins, leading large-cap altcoins to approach or exceed their historical peaks, while 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. This overheating often signals that the market is about to adjust and ultimately enter a bear market.
However, the Altcoin Season is not just related to prices; it represents a comprehensive evolution of market activity, application proliferation, and innovation. So far, every round of the Altcoin Season has reflected unique technological changes and market trends.
The first round of the Altcoin Season in 2017 was marked by the ICO craze and the rise of NFTs (remember CryptoKitties?). The second round in 2021 integrated the rise of DeFi and the explosive popularity of NFTs and gaming. To support these developments, cheaper and more scalable Layer 2 solutions emerged. All these innovations have withstood the test of the crypto winter and continue to evolve today.
Looking ahead, the third round of the 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 the Altcoin Season
Multiple indicators suggest that the Altcoin Season is approaching. Bitcoin's dominance is declining, altcoins are outperforming Bitcoin, and their market cap is reaching new highs. However, the Altcoin Season Index and other related indicators suggest that the peak for altcoins may not yet be here.
In absolute terms, the total market cap of altcoins, calculated by subtracting Bitcoin's market cap from the total market cap of the crypto market, has reached a historic high. According to Coingecko data, the current market cap stands at $1.89 trillion, surpassing the peak of $1.79 trillion set in November 2021. In relative terms, since November, Bitcoin's dominance has fallen from 60% to 51%.
However, both of these indicators include stablecoins and wrapped assets. While they are crucial for market liquidity, they may not accurately reflect the development of the altcoin market. Moreover, under bullish conditions, these types of assets tend to favor altcoins due to their higher risk-reward characteristics.
To more purely assess the market, the Altcoin Season Index from Blockchain Center excludes stablecoins and wrapped assets. This index defines the Altcoin Season as a period in which over 75% of the top 50 altcoins outperform Bitcoin over the past 90 days. Recently, this index surpassed the 75% threshold on December 2 and maintained that level for a week. In the previous round of the Altcoin Season, the index stayed above the threshold for nearly three months. This supports the view that the peak of the Altcoin Season may occur in 2025.
Image source: BlockChain
The OTHERS index, calculated by platforms like TradingView, is another important metric for assessing altcoin performance. This index tracks the total crypto market cap after excluding the top ten coins (including the two largest stablecoins). Although the index rose by 123% in the past 30 days (followed by a pullback), it has not yet reached its previous historical high. The last time it surged from a historical high in 2017, it increased by 525%, indicating there is still considerable room for growth.
Image source: TradingView
Finally, Google Trends also reflect people's interest in altcoins. With a peak in May 2021 (index at 100), the current search interest has risen to 87, the highest level since then.
3. Key Narratives for Altcoins in 2025
As of 2024, among the top 50 performing altcoins, three are meme coins: Dogwifhat ($WIF +2,027%), $PEPE (+1,764%), and Dogecoin ($DOGE +382%). Although meme coins often symbolize the Altcoin Season, they are less likely to define the mainstream narrative of the crypto market in 2025.
According to Blockchain Center data, the BRC-20 Token has performed the best among new technologies emerging in 2023-2024. While some do not regard it as a true altcoin, these tokens issued on the Bitcoin blockchain have seen increases exceeding 1,000% this year, thanks to technologies like Ordinals or Runes. Among more traditional altcoin categories, RWAs (tokenization of real-world assets) 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%).
Image source: BlockChain
By 2025, new narratives are likely to emerge, and the trends in venture capital may reveal the most promising directions. According to Pitchbook data, venture capital in the crypto industry was relatively modest in 2023 ($10 billion), with a cumulative of $7.1 billion in the third quarter of 2024. Next year, activity could rebound to levels seen in 2021 and 2022, reaching $25.3 billion and $29.4 billion respectively. This growth in funding will flow into specific projects and the broader industry, driving the next wave of growth.
Finally, please note that during the excitement of the Altcoin Season, it is essential to avoid being swept up by market speculation. Every bull market ultimately ends with a correction (turning bearish), and only tokens with strong fundamentals and real application scenarios will survive into the next cycle.
[Disclaimer] The market carries risks, and investments should be made cautiously. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions herein align with their specific circumstances. Invest at your own risk.
This article is republished with permission from: (Foresight News)
Original author: Marie Poteriaieva
'Just wait a little longer! The real Altcoin Season will come at this time, what are the key narratives?' This article was first published on 'Crypto City'
