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CryptoIntelligence 2025-01-10 23:32:00

Altcoin Market Struggles Below All-Time Highs Amid Stagnant Inflows

The total altcoin market capitalization remains below its November 2021 peak, with circulating capital shifting between projects and new inflows largely stagnant. Ki Young Ju, market analyst and CEO of CryptoQuant, compared altcoin market performance to Bitcoin (BTC), which has doubled in value since 2021. “Only a few altcoin projects with strong use cases and narratives will survive,” Ju noted. According to Total3 — a metric representing the total market capitalization of cryptocurrencies excluding Bitcoin and Ether (ETH) — altcoins currently hold a market cap of approximately $943 billion. The altcoin market briefly touched an all-time high of $1.1 trillion during a rally from November to December 2024, but quickly retraced to current levels. Changing Dynamics of Altcoin Seasons Ju has warned that this market cycle deviates from previous ones, where altseason was traditionally triggered by capital rotations from Bitcoin to altcoins. Instead, he suggested this altseason may rely on stablecoin liquidity and the expansion of stablecoin trading pairs. “A rise in stablecoin trading pairs suggests fresh capital entering the altcoin market and reflects true demand increases, rather than just capital rotations,” Ju added. Capital flows into Bitcoin and Ether exchange-traded funds (ETFs) also signify a major shift from prior cycles. These flows are siloed within the ETF ecosystem, limiting the ability to shift funds from Bitcoin and Ether investments into smaller-cap altcoins, Ju explained. Market Outlook Felix Hartmann, founder of Hartmann Capital, predicted in December 2024 that most altcoins would face a “slow bleed” until late January 2025. Hartmann argued there was little opportunity in altcoin investments during the current consolidation phase, suggesting the market may only pick up following its conclusion. Altseason now faces a more complex and constrained environment, reshaping how capital moves in the crypto market.

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