Author: 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 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 various crypto projects in recent sectors has further stimulated investor sentiment, and the market's expectation for 'altcoin season' is growing stronger, with many starting to seek potential crypto assets.
DeFi and L1 are the main forces in issuing tokens, and token distribution strategies are undergoing optimization and adjustment.
Recently, multiple projects in the crypto market have announced token issuances one after another. PANews has counted 21 crypto projects that recently officially announced TGE, covering tracks such as DeFi, L1, NFT, L2, and DAO, among which DeFi and L1 projects are the main force in issuing tokens, 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 cumulative financing 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 project reliability and potential, adding more reliability and potential to these projects.
However, as capital intervenes, the previous issue of continuous price decline due to high FDV and low circulation has also gradually sparked strong dissatisfaction and controversy in the market. Faced with this predicament, market attention has begun to shift significantly, including turning towards relatively fair and decentralized crypto 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, at this stage, investors are relatively more inclined to favor community-driven and fairer investment opportunities.
From the perspective of token distribution, many projects have begun to adjust the previous issues of low initial circulation to avoid the dilemma of limited sustainable growth space due to high FDV. For example, Movement has an initial circulation of 22%, Side Protocol is at 22.9%, and Zircuit is at 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 'victims' of liquidity exits.
Moreover, token distribution strategies are also paying more attention to ecosystem building and community participation. For instance, Bluefin allocates 52% of the total token supply for ecosystem growth, Movement allocates 40% of the total token supply to the ecosystem and community, Magic Eden allocates 37.7% of the total token supply to the community and ecosystem, and Usual allocates 90% of tokens to the community. Such strategies help enhance the project's community cohesion and market competitiveness, and better promote the long-term development of projects.
In particular, regarding airdrop efforts, the average token airdrop ratio among these 21 projects reached 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 has an average airdrop value of $28,500 per person, making it one of the largest airdrop projects this year. Airdrops, as an effective means to attract and incentivize community members, continue to play an important role in project promotion, providing generous returns to early supporters and effectively enhancing the project's influence and visibility.
Multiple factors or the return of altcoin season may be driven by Bitcoin's momentum, but it cannot rely solely on Bitcoin's influence.
The intensive announcement of token issuances among crypto projects is closely related to the market recovery and the relaxed policy environment in the United States. Recently, as Bitcoin continues to rise, mainstream public chains, DeFi, metaverse, L2, and gaming sectors have experienced a strong rebound. At the same time, the PVP competition in the MEME market has intensified, discouraging many players, and market attention is gradually shifting towards the secondary market.
"Altcoin season may be about to begin," top trader Eugene recently stated.
According to a recent report published by Bitfinex, the overall crypto market has reached a new cycle high, with the market capitalization of altcoins now close to the $984 billion peak in May 2021, indicating that speculative funds are shifting from Bitcoin to altcoins. Historically, this kind of fund rotation often signals the arrival of 'altcoin season', where altcoins see more significant gains compared to Bitcoin. Crypto analyst Mikybull Crypto stated that Bitcoin's dominance in the crypto 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 funds into altcoins.
QCP also pointed out that the recent decline in Bitcoin's market cap share reflects a trend where funds may gradually shift 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, around $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 used as reserves to respond to future declines.
Furthermore, as the crypto market gradually moves towards the mainstream, the relaxed crypto policy environment in the U.S. has also sparked optimistic sentiment towards the overall industry development, including altcoins. According to previous reports by PANews, Trump’s new government member list has been gradually revealed, with many openly expressing a friendly attitude towards cryptocurrencies, which may bring more positive policy expectations for the industry. Notably, with the ETF applications of currencies such as Solana, XRP, and LTC, market expectations are rising.
However, CryptoQuant CEO Ki Young Ju pointed out that, compared to the previous bull market, the current rise in Bitcoin is primarily driven by institutional investors and spot ETF demand, which is different from the funds of cryptocurrency exchange users and does not intend to shift assets from Bitcoin to altcoins. Meanwhile, since institutional investors mainly operate outside exchanges, asset rotation has become less likely. Although institutions may allocate mainstream altcoins through investment tools like ETFs, small-cap altcoins still rely on retail users from exchanges. For altcoins to reach new highs in total market capitalization, significant new capital inflows into exchanges are required, but current levels below historical highs indicate a reduction in liquidity brought by new users. Therefore, altcoin projects should focus on developing independent strategies to attract new capital rather than relying on the momentum brought by Bitcoin.
