Expert Analysis by Valentin Preobrazhenskiy
Most of the altcoins outside of the top 30 are close to All all-time low
Altcoins have significantly underperformed Bitcoin (BTC), with nearly a 100% gap since December 2023, according to TradingView's Altcoin Index. The picture worsens when excluding the top 30 altcoins, with many tokens trading at all-time lows, even below levels seen during the FTX collapse when BTC dipped below $20k.
This underperformance is largely driven by liquidity dynamics linked to high-interest rates and geopolitics. Investors seeking refuge from currency debasement primarily allocate capital to Bitcoin, absorbing liquidity that would typically cascade through Ethereum into smaller altcoins.
User activity is strong, with almost two hundred active addresses
Investor sentiment toward altcoins remains cautious, driven by uncertainties around fundamental valuations. While Layer-1 and Layer-2 blockchains have intrinsic value, the current oversupply of blockspace raises concerns. The crucial question for analysts now is the genuine utility of decentralized applications (dApps) and the authenticity of reported user activity.
Token Terminal data shows approximately 206 million monthly active addresses as of March 2025, consistent with Andreessen Horowitz’s Report State of Crypto 2024 figures (220 million active addresses in September 2024). While user activity appears robust, particularly driven by meme-token surges like those seen on Solana, doubts persist around the sustainability and authenticity of this growth.
Some Altcoins are cheaper 20-100x by capitalisation to active address or fees compared to peers
Analyzing on-chain fees provides another dimension of clarity. Current daily fees reported by Token Terminal amount to about $44 million, translating to roughly $15 billion annually, with stablecoins contributing about one-third.
Comparatively, capitalization-to-monthly active users (or wallets) highlights stark contrasts:
- Raydium: approximately $30 per active user
- Uniswap: around $700 per active user
- Ethereum network: approximately $50,000 per active user
- U.S. banks: between $10,000 and $20,000 per active customer
Moreover, capitalization-to-fees ratios—analogous to EV/Sales or P/E metrics used traditionally—show substantial discrepancies. High multiples for Uniswap and Aave (70-100) contrast sharply with moderate multiples for PancakeSwap, Venus, and Convex (15-30), and significantly lower multiples for Thena and GMX (5-10). Such discrepancies may indicate either inflated activity metrics, data inconsistencies, or significant relative-value opportunities, particularly amid ongoing token unlock pressures.
Institutional Participation: Still Missing?
One of the most defining gaps in the current altcoin market is the absence of sustained institutional capital. Despite improved sentiment around crypto regulation in the U.S., televised promotions on mainstream networks, and high-profile statements from financial institutions and political leaders, actual capital inflows from institutional players remain muted.
Part of the stagnation stems from persistent selling pressure. Liquidity providers and hedge funds have been pulling capital out of crypto markets. Instead of allocating new funds, many are selling assets acquired during OTC deals at deep discounts—some as high as 70%—to profit from the spot-OTC arbitrage. Others are offloading altcoins that were unlocked after multi-year vesting periods, capitalizing on early investment cycles that began during the previous bull run.
Meanwhile, mainstream asset managers are actively derisking. With elevated interest rates, U.S. Treasuries offer some of the most attractive yields in years, pulling institutional attention away from volatile crypto markets. The shift in rate dynamics has temporarily reprioritized conservative fixed-income strategies over risk-on plays like altcoins.
Adding to the pressure, post-election uncertainty and significant losses from meme coins backed by political influencers have triggered a social contagion effect. Across private networks and group chats, retail and institutional participants are quietly advising each other to sell, amplifying the negative momentum.
Yet not all signals point downward. Regulatory clarity continues to improve, and major players such as BlackRock are building crypto ETF pipelines and expanding access to retail audiences. Banking institutions are exploring digital asset accounts, and U.S. officials have floated the idea of including both Bitcoin and select altcoins in future strategic reserves.
At the same time, communities remain deeply engaged. Active DeFi ecosystems and strong user retention continue to provide organic demand, while project teams step up ecosystem marketing to stabilize token flows.
The tug-of-war between macro-driven selling and sentiment-driven buying defines the current market. While institutions remain cautious, the foundational interest is still intact—awaiting the right convergence of conditions to re-engage at scale.
Conclusion
Altcoins do not look "dead" at all, but rather caught in a cyclical downturn primarily driven by liquidity shortages and macroeconomic pressures. While the global macro uncertainty may last long, there could be plenty of relative value market-neutral opportunities.
Disclaimer: This article represents personal analysis and opinions and is not investment advice. The author holds positions in several of the tokens mentioned.
About the Author
Valentin Preobrazhenskiy is the founder and CEO of LATOKEN, a top-50 global cryptocurrency exchange. He is also a former director and mentor at Founder Institute and founder of Blockchain Economic Forum. Under his leadership, LATOKEN has facilitated the launch of over 2,000 digital assets and has been featured in Forbes, Bloomberg, TechCrunch, and NASDAQ.
