The crypto market once had a classic playbook: Bitcoin rises first, followed by a rotation of altcoins.
This pattern was validated in the bull markets of 2017 and 2021. Bitcoin acted as a "bridgehead" for funds, attracting a large influx of capital, which then flowed into altcoins, driving the prosperity of the entire market.
However, this pattern seems to have failed in 2025.
ETF Lockup and Liquidity Drought
Institutional Effect: The funds in ETFs are not for speculation but for long-term holding. This has led to a significant drop in market liquidity, depriving altcoins of the opportunity to rotate.
Data Comparison: In 2021, altcoins accounted for 38.7% of the total crypto market value, while by 2025, this proportion has dropped to 14.2%.
The Flood and Dilution of Altcoins
The number of altcoins in the market has surged from thousands in 2021 to 12 million in 2025 (including long-tail tokens and meme coins). The flood of tokens has diluted the market, making it difficult for quality projects to stand out while inferior projects fill the space.
In 2021, Binance's platform had only 300 tokens, while now CoinMarketCap tracks over 12 million tokens. This massive growth has not brought innovation but is instead filled with "junk tokens."
Many retail investors have suffered heavy losses in Solana's meme tokens and opaque Telegram trades, with funds lost unlikely to return.
MicroStrategy, the Institutions' New "Altcoin"
In 2025, the behavior pattern of institutional investors in the crypto market has fundamentally changed. They no longer rely on altcoins to pursue high returns but choose to leverage Bitcoin through MicroStrategy (MSTR). MicroStrategy has become the "new altcoin" for institutional investors. By issuing bonds to purchase Bitcoin and then using Bitcoin as collateral for financing, MicroStrategy provides a low-risk, high-leverage investment method for institutions.
MicroStrategy currently holds over 300,000 bitcoins, with an average purchase cost of around $13,900, while the current price of Bitcoin is much higher than this level. In comparison, institutions can avoid the risk of investing in altcoins and indirectly hold Bitcoin and enjoy leveraged returns through MicroStrategy's stock.
Institutional preference for MicroStrategy has further compressed the survival space for altcoins.
The "liquidation" of the altcoin market is accelerating. With the withdrawal of institutional funds and the depletion of retail funds, many projects have become "neglected."
In Solana's ecosystem, a large number of meme tokens have become a "hot potato" game, with most retail investors ultimately becoming the "bag holders."
In 2024, only 3.7% of the 870,000 meme tokens issued on the Solana chain survived more than 30 days. Once funds are lost, these tokens have little chance of rebounding.
The New Survival Rules in PVP Mode
With the traditional "buy-hold-wait for rotation" investment logic失效，the crypto market has entered a new "player versus player" (PVP) stage. In this stage, only those who discover trends the earliest can profit, while most others become "exit liquidity."
The past cyclical investment strategy of "buying altcoins and waiting for the bull market rotation" has failed.
Now, the market has become more brutal: if you are not the first to enter a trend, you are likely to become "exit liquidity" for other players.
Binance founder CZ once said that 99% of traders would have much higher returns if they chose to hold Bitcoin instead of speculating on altcoins.
Although most altcoins have lost value, a few quality projects still have the potential to rise in the future.
When Bitcoin prices surge significantly, market funds may still flow into a few quality projects, but this is more like a "selective rally" rather than a full-blown "altcoin season."
The question is not "whether there will be opportunities," but "when there will be opportunities."
Despite the current unfavorable market environment for altcoins, this does not mean they have no future. A few truly valuable projects may survive the test of time and gain a foothold in the future market.
Characteristics of quality projects: having real-world application scenarios (such as DeFi protocols), strong community support, and long-term technological accumulation.
Bitcoin's dominant position will further strengthen. With the popularity of ETFs and the continuous inflow of institutional funds, Bitcoin may become an asset similar to "digital gold," with its volatility gradually decreasing.
The crypto market in 2025 is undergoing profound changes.
The old rotation logic has failed, and new rules are being established. In this process, most projects will be eliminated, while a few quality projects will welcome new opportunities. For investors, understanding the new rules of the market and avoiding becoming "exit liquidity" is the key to future success.Is Bitcoin the Safe Haven as Altcoin Rotation Ends?
DeepTide TechFlow | March 20, 2025, 7:00
BTC Rises, Altcoins Follow. Will 2025 Be Different?
Author: Kyle Chasse
Translator: DeepTide TechFlow
The crypto market once had a classic playbook: Bitcoin rises first, followed by a rotation of altcoins.
This pattern was validated in the bull markets of 2017 and 2021. Bitcoin acted as a "bridgehead" for funds, attracting a large influx of capital, which then flowed into altcoins, driving the prosperity of the entire market.
However, this pattern seems to have failed in 2025.
ETF Lockup and Liquidity Drought
Institutional Effect: The funds in ETFs are not for speculation but for long-term holding. This has led to a significant drop in market liquidity, depriving altcoins of the opportunity to rotate.
Data Comparison: In 2021, altcoins accounted for 38.7% of the total crypto market value, while by 2025, this proportion has dropped to 14.2%.
The Flood and Dilution of Altcoins
The number of altcoins in the market has surged from thousands in 2021 to 12 million in 2025 (including long-tail tokens and meme coins). The flood of tokens has diluted the market, making it difficult for quality projects to stand out while inferior projects fill the space.
In 2021, Binance's platform had only 300 tokens, while now CoinMarketCap tracks over 12 million tokens. This massive growth has not brought innovation but is instead filled with "junk tokens."
Many retail investors have suffered heavy losses in Solana's meme tokens and opaque Telegram trades, with funds lost unlikely to return.
MicroStrategy, the Institutions' New "Altcoin"
In 2025, the behavior pattern of institutional investors in the crypto market has fundamentally changed. They no longer rely on altcoins to pursue high returns but choose to leverage Bitcoin through MicroStrategy (MSTR). MicroStrategy has become the "new altcoin" for institutional investors. By issuing bonds to purchase Bitcoin and then using Bitcoin as collateral for financing, MicroStrategy provides a low-risk, high-leverage investment method for institutions.
MicroStrategy currently holds over 300,000 bitcoins, with an average purchase cost of around $13,900, while the current price of Bitcoin is much higher than this level. In comparison, institutions can avoid the risk of investing in altcoins and indirectly hold Bitcoin and enjoy leveraged returns through MicroStrategy's stock.
Institutional preference for MicroStrategy has further compressed the survival space for altcoins.
The "liquidation" of the altcoin market is accelerating. With the withdrawal of institutional funds and the depletion of retail funds, many projects have become "neglected."
In Solana's ecosystem, a large number of meme tokens have become a "hot potato" game, with most retail investors ultimately becoming the "bag holders."
In 2024, only 3.7% of the 870,000 meme tokens issued on the Solana chain survived more than 30 days. Once funds are lost, these tokens have little chance of rebounding.
The New Survival Rules in PVP Mode
With the traditional "buy-hold-wait for rotation" investment logic失效，the crypto market has entered a new "player versus player" (PVP) stage. In this stage, only those who discover trends the earliest can profit, while most others become "exit liquidity."
The past cyclical investment strategy of "buying altcoins and waiting for the bull market rotation" has failed.
Now, the market has become more brutal: if you are not the first to enter a trend, you are likely to become "exit liquidity" for other players.
Binance founder CZ once said that 99% of traders would have much higher returns if they chose to hold Bitcoin instead of speculating on altcoins.
Although most altcoins have lost value, a few quality projects still have the potential to rise in the future.
When Bitcoin prices surge significantly, market funds may still flow into a few quality projects, but this is more like a "selective rally" rather than a full-blown "altcoin season."
The question is not "whether there will be opportunities," but "when there will be opportunities."
Despite the current unfavorable market environment for altcoins, this does not mean they have no future. A few truly valuable projects may survive the test of time and gain a foothold in the future market.
Characteristics of quality projects: having real-world application scenarios (such as DeFi protocols), strong community support, and long-term technological accumulation.
Bitcoin's dominant position will further strengthen. With the popularity of ETFs and the continuous inflow of institutional funds, Bitcoin may become an asset similar to "digital gold," with its volatility gradually decreasing.
The crypto market in 2025 is undergoing profound changes.
The old rotation logic has failed, and new rules are being established. In this process, most projects will be eliminated, while a few quality projects will welcome new opportunities. For investors, understanding the new rules of the market and avoiding becoming "exit liquidity" is the key to future success.
