Author: Katherine Ross, Blockworks; Translated by: Bai Shui, Jinse Finance
We keep asking ourselves one question: When will altcoins take off?
To be fair, David is doing very well in preparing for the next altcoin season's takeoff. But to figure out how optimistic people should be, I turned to HashKey's Jupiter Cheng.
When asked when we can expect to see the next altcoin season, Zheng and David agreed that HashKey has compiled a report explaining why the team is currently optimistic about altcoins.
Part of the reason is that Bitcoin's dominance is likely to peak, and if you are a regular reader of (Empire), you will know this is one of the necessary factors for altcoins to take off.
Once Bitcoin's dominance exceeds 60% or even 65%, Zheng expects a "massive altcoin season" to begin. BTC's current dominance is 61.64%.
Zheng highlighted three successful areas he is focusing on: Ethereum, Solana, and certain tokens in DeFi, such as UNI and SKY (formerly known as MKR).
Let’s start with Ethereum, especially since it feels like more and more people are falling off the bull market train.
HashKey believes there are three factors that led to the collapse of Ethereum: intensified competition, value transfer, and reduced transaction fees.
A review of the past altcoin season provided by HashKey
The report states: "Currently, the Ethereum community is developing metrics to measure 'Ethereum consistency', and these efforts are expected to produce best practices that will further strengthen the Ethereum ecosystem and ensure long-term success."
As for Solana, it is a "major foundational game", unlike the "dilemma game" played by Ethereum.
"Solana has achieved a lot this year, and compared to Ethereum, Solana is somewhat centralized but very efficient. Therefore, Solana's operational capability is quite strong. Ethereum focuses more on technology... the technological layer, the decentralization layer, and the security layer, while Solana focuses more on how to achieve large-scale adoption," Zheng explained to me.
In addition, Zheng believes this will be the next token chosen by ETFs after ETH and BTC funds.
In summary, "Many DeFi projects from the last cycle have gradually become infrastructure and have formed a 'must-have' pattern across cycles," HashKey wrote.
But it’s not all bull markets and daydreams; Zheng is not so optimistic about some things.
For example, Layer 2. There are only so many that investors can focus on. Moreover, even apart from that, only the "top 5 or top 10 are valuable," he explained.
To address this issue, he proposed a suggestion: "If we try to select the best Layer 2 from [the provided] 100, it is quite difficult, so maybe just choose the top ones, just like we select the seven giants from the U.S. stocks."
