Bitcoin broke $100,000 last week, marking a symbolic historical moment. However, just as Bitcoin was celebrating this achievement, many altcoins began to outperform it, seemingly heralding the arrival of the altcoin season.
From the beginning of this year to now, 20 of the top 50 cryptocurrencies by market capitalization have increased more than Bitcoin's 124% rise. The market capitalization and media attention on altcoins are on the rise, and the altcoin season index is also climbing. According to the latest report from CCData, trading volume in November reached an annual high, and the number of open contracts also set a historical record. These signs indicate that the market's risk appetite is increasing, a change that typically favors altcoins due to their greater potential for returns.
From a deeper perspective, investing in altcoins is essentially investing in Web3 and other blockchain-related industries. The future of this industry, particularly regarding regulatory clarity, has a more positive outlook influenced by market sentiment after the U.S. elections.
According to CryptoQuant data, altcoin trading volume is not driven by Bitcoin trading pairs. This means that the market's growth is real and not just a flow of funds from Bitcoin to altcoins. This could also mean that this round of altcoin season will not wait for Bitcoin's price to consolidate, but rather that both altcoins and Bitcoin may rise simultaneously.
The altcoin rebound since November seems to suggest that a larger-scale altcoin season may arrive in 2025. New cryptocurrency technologies and trends may attract more attention from institutional investors and venture capitalists. Next, we will explore the potential and key topics for the next altcoin season based on on-chain data and other trends.
1. The altcoin season is not just about price
The altcoin season typically refers to the phase where altcoins consistently outperform Bitcoin, which usually occurs in the last year of Bitcoin's four-year cycle. As market enthusiasm expands from Bitcoin to other cryptocurrencies, large-cap altcoins will approach or surpass their historical highs, while new technologies and narratives will drive mid- and small-cap coins to break historical records. The climax of this phase is often accompanied by FOMO (fear of missing out), pushing the market into an overheated state. This typically signals an adjustment in the market, leading into a bear market cycle.
However, the altcoin season is not just about rising prices; it also represents overall progress in market activity, application adoption, and innovation. Each altcoin season is accompanied by specific technological changes and market trends.
The altcoin season of 2017 marked the ICO boom and the rise of NFTs (remember CryptoKitties?).
The altcoin season of 2021 combined the rise of DeFi, the explosive growth of NFTs and games, and the popularity of Layer 2 solutions, which supported these innovations.
Looking ahead to 2025, the altcoin season may bring new technological narratives, some of which are already in development, while others may not have fully emerged yet.
2. Key indicators of altcoin season
Multiple indicators suggest that the altcoin season may be approaching. Bitcoin's market dominance is declining, and altcoins have outperformed Bitcoin, reaching new highs in market capitalization. The Altcoin Season index and other related metrics indicate that the peak for altcoins may not have arrived yet.
From a market capitalization perspective, the total market capitalization of altcoins after excluding Bitcoin's market cap has reached a new high. According to Coingecko data, the current market cap is $1.89 trillion, surpassing the peak of $1.79 trillion set in November 2021. In terms of relative market share, since November, Bitcoin's market share has decreased from 60% to 51%.
However, these two indicators also include stablecoins and wrapped assets, which are crucial for market liquidity but may not accurately reflect the true state of the altcoin market.
To measure the altcoin market more purely, Blockchain Center's Altcoin Season index excludes stablecoins and wrapped assets. This index defines the altcoin season as a period in which over 75% of the top 50 altcoins have outperformed Bitcoin in the last 90 days. Recently, this index surpassed the 75% threshold and maintained that level for a week, while the last altcoin season kept this level for nearly three months. This further supports the view that the peak of the altcoin season may occur in 2025.
The OTHERS index is another important metric for measuring altcoin performance; it tracks the total market capitalization of the cryptocurrency market after excluding the top ten coins (including the largest stablecoins). Although this index has risen by 123% in the past 30 days and has seen a pullback, it has not yet reached its previous historical highs, indicating there is still significant room for growth.
Data from Google Trends also reflects growing interest in altcoins, with the current search popularity at 87, close to the peak of 100 in May 2021, indicating a resurgence in attention towards altcoins.
3. Key narratives for altcoins in 2025
By 2024, three of the top 50 performing altcoins will be Memecoins: Dogwifhat (WIF +2,027%), PEPE (+1,764%), and Dogecoin (DOGE +382%). Although Memecoins are often a symbol of the altcoin season, they are unlikely to dominate the mainstream narrative of the crypto market in 2025.
According to Blockchain Center, among the new technologies emerging in 2023-2024, BRC-20 Tokens have stood out the most. Although some do not consider them true altcoins, these Bitcoin blockchain-based tokens have surged over 1000% in value this year thanks to technologies like Ordinals and Runes. In traditional altcoins, RWAs (Real World Assets Tokenization) lead with a 717% annual growth rate, followed by AI-related tokens (+513%) and DePIN (Decentralized Physical Infrastructure, +303%).
By 2025, new narratives may emerge, and venture capital dynamics may reveal the most promising directions. According to Pitchbook data, venture capital in the crypto space was relatively moderate in 2023 ($10 billion) and $7.1 billion in Q3 2024. Venture capital activity is expected to rebound to the levels of 2021 and 2022, at $25.3 billion and $29.4 billion respectively, which will drive the next wave of growth.
In summary, during the altcoin season's frenzy, investors need to avoid being swept up by market hype. Every bull market ultimately goes through adjustments, and only those tokens with solid fundamentals and real use cases will survive in the next cycle.