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When alt season becomes history: Unveiling the harsh truth of the 2025 crypto market
In the past, altcoins surged due to exchanges using Bitcoin as collateral to print money and pump prices. BN once used user BTC to issue 1.5 billion BUSD to inject into the BSC ecosystem, creating a collective frenzy. However, after the U.S. froze Circle's dollar reserves, BUSD plummeted from 20 billion to 300 million, breaking the wealth creation chain of exchanges.
Currently, incremental funds are trapped in the US stock market, Wall Street holds 129 billion BTC through ETFs but finds it difficult to enter altcoins, with an average monthly stablecoin inflow of only 3 billion, less than 1/10 of that in January 2021, and the market is becoming A-share-like. Opportunities exist only in specific areas such as AI concepts or new coin launches, requiring quick action without waiting for a general rise.
What are the opportunities for altcoins? Structural dilemmas under institutional diversion and meme frenzy.
The institutional funds attracted by spot ETFs have taken away the incremental value of altcoins, while on-chain platforms have directed speculative funds towards meme coins. After retail investors chase the rise, most end up being halved or going to zero, resulting in funds being trapped. The current altcoin market is characterized by sector rotation, with valuation differentiation across various tracks, and there will no longer be a comprehensive bull market with simultaneous rises and falls.