Last year, many expected a full altseason, but it never materialized. While some large-cap tokens such as BNB, SOL, and HYPE reached new all-time highs, most altcoins are still down 40–50%. There are several key reasons behind this.
Reason 1: Capital Dilution
New narratives continuously replace old ones, and previous “runners” quickly become irrelevant. Every year, millions of new tokens enter the market, fragmenting attention and liquidity. About a year ago, crypto aggregators were tracking around 5.8 million tokens. Today, that number has grown to roughly 29.2 million.
In this environment, even newly launched tokens struggle to hold value. Research shows that in 2025, only about 15% of newly launched altcoins are trading above their TGE price.
Reason 2: Low Float, High FDV Launches
In 2025, low-float, high-FDV token launches continued. Although fewer in number, they still contributed to suppressing a broad altseason. In this structure, most upside goes to early and private investors, while secondary market buyers often become exit liquidity.
Low initial circulating supply inflates valuations on thin liquidity, and subsequent unlocks create continuous sell pressure.
Reason 3: Competition From Other Instruments
A few years ago, altcoins were one of the fastest ways to grow capital. Today, they are mostly viewed as mid- to long-term investments and must compete with other instruments and sectors for liquidity.
At the start of last year, a large portion of retail capital moved out of altcoins, especially VC-backed high-FDV tokens, into memecoins. After scams and failures, liquidity also exited memecoins, but it did not return to altcoins. During this time, sectors like perpetuals and prediction markets gained traction, offering faster returns and attracting retail interest.
Can Institutions Support Altcoins?
Yes, but only selectively. In 2025, institutional capital focused on a small number of strong assets. ETFs saw inflows into ETH, SOL, and XRP, and regulated exposure increased through DATs.
From summer through October, ETF inflows supported the market. Once outflows began, the trend reversed. In November, Bitcoin ETFs saw net outflows of about $3.5 billion, followed by another $1.1 billion in December. Without fresh large-scale capital inflows, recovery in altcoins and the broader market remains difficult.
Bottom Line
A classic, broad-based altseason looks unlikely this year. A selective “money season” is more probable, where only strong altcoins with real utility and institutional interest perform well. A wide altcoin rally would require liquidity to return, ETF inflows to strengthen again, and fairer token launch structures.
What is your view: will altseason arrive this year or $ETH $BTC
