Altcoin sell-off has hit a five-year high, providing a massive buying opportunity but also raising a key concern about their future amid the tokenization boom.
In fact, when tracked against Bitcoin, the altcoin market cap has dropped to its lowest since 2022.
This, according to analyst Michael van de Poppe. According to the analyst’s latest observations,
Yes, that’s been a bear market of more than four years. It’s about to break to the upside, but almost everyone will be left behind thinking that we’re still four months away from bottoming out.
Still, tokenized assets have offered new opportunities to invest in alternatives, instead of altcoins that may crash to zero.
Which altcoins will survive?
For his part, CryptoQuant CEO Ki-Young Ju echoed de Poppe’s observation and said,
Altcoins are not dead. Narrative-only altcoins are. The era of making money just by issuing a token is over.
According to the exec, narratives still matter, but no longer enough to hold an altcoin as a long-term investment. He added,
Some altcoins are still worth holding long term, but only if they have real businesses, real revenue, and fit broader global financial trends.
For him, DeFi projects with real revenue, aligned with global internet companies with tokenized asset offerings, and those tracking broader financial trends have a better chance.
He also mentioned Binance’s BNB and Telegram’s GRAM as examples of altcoins with potential upside that fit the above criteria.
Young Ju added that every crypto bull run is defined by a key meta, whether DeFi, memecoins, etc. AI agents will be next, and most blockchains and platforms will benefit from the boom. He concluded by stating,
I know many of my followers were hurt by altcoins. Many are Bitcoin maxis, and I respect that. I agree that 99.9% of altcoins should be rejected. But “most are trash” is not the same as ‘all are trash.’ Be selective, not prejudiced.
For de Poppe, Chainlink [LINK], Ondo Finance [ONDO], Near [NEAR], Sui [SUI], and others are lucrative altcoin bets. He also cited tokenization and AI agents’ narratives as key catalysts for his list.
To grasp the level of altcoin exhaustion, it’s worth noting that the level of overall selling pressure for the segment has hit a 5-year extreme too. In fact, CryptoQuant found that,
This is not a dip. It’s 15 months of continuous net selling on Spot Exchanges. Cumulative buy/sell volume diff (alts excluded BTC/ETH): deepest negative reading since data began in 2020.
This simply reinforces de Poppe’s data. In other words, investors might be exiting altcoins. Still, there are still outliers like Hyperliquid [HYPE] that have been printing new highs recently.
Overall, the altcoin market will likely change but not die, amid ongoing adoption and new sub-sectors like tokenization.
Final Summary
- CryptoQuant CEO believes that altcoins tied to financial trends, tokenization, and the AI trend will survive.
- Altcoin market selling pressure has hit a five-year extreme, but others like HYPE continue to outperform the sector.