Altcoins on Life Support? 2025’s Brutal Truth Revealed in the Data

Blood in the crypto streets—but is this the end or just another cycle?

Market carnage leaves altcoins gasping

While Bitcoin flexes its store-of-value muscles, altcoins are taking body blows. Trading volumes cratered 68% from their 2021 peak. The 'altseason' playbook got shredded—along with portfolios.

Survivors emerge from the wreckage

A handful of projects with actual utility (not just dog memes) cling to relevance. Ethereum's Shanghai upgrade bought time. Solana's validator exodus slowed. But the 'ghost chain' graveyard keeps expanding.

Institutional money plays hard to get

Hedge funds that piled in during the mania now treat alts like radioactive waste. Compliance teams veto anything that smells of pre-mine shenanigans—which is most of them.

The cynical take? This is Wall Street's wet dream: weak hands shaken out, leaving only 'serious investors' (read: their own bags). But crypto's never followed Wall Street's script before.

Here, you can see two MarketVector indices tracking the crypto space. bitcoin is in purple, while a basket of small-cap coins is in blue.

Both posted healthy gains in November — when Donald TRUMP secured a second term in the White House — but have been on divergent paths ever since. While BTC’s surged by 73% over the past year, the small-caps are down by about 40%.

However, this chart is one element of a wider story. The purple line represents the Digital Assets 100 Small-Cap Index, which tracks the performance of 50 altcoins. Maker, Worldcoin, BONK, and Fartcoin are some of the better-known names.

Crucially, this means that the likes of Ether, XRP and solana aren’t included — all of which could soon become more widely available to institutional investors in the form of exchange-traded funds.

So… how are top-tier altcoins faring when compared with BTC?

Well, this chart above gives us an idea. Once again, Bitcoin’s in purple, with a 73% gain over the past 12 months. The blue line represents the MarketVector Digital Assets 10 Index, which is up by just 27%.

Bitcoin has a 31% weight in this index, followed by ETH on 30%, XRP on 13%, Binance Coin on 9.5% and Solana on 8%.

• The presence of altcoins watered down this index’s returns, meaning a Bitcoin-only portfolio would have performed more strongly
• Ether (which has fallen 26.5% since June 2024) was a particular drag
• XRP (up by a staggering 363% compared with 12 months ago) is largely responsible for most of this index’s gains, despite its modest weighting
• Solana has been struggling amid dissipating demand for meme coins

The Bloomberg report has a particularly punchy quote from Zodia Markets co-founder Nick Philpott, who says of altcoins:

“I think they’re just going to die, frankly. They’ll just wither away. Technically, a lot of this stuff will just sit there and gather dust in perpetuity.”

Unfortunately, there are elements of truth here. For one, Bitcoin’s dominance — referring to its market share of the overall crypto space — has been steadily climbing for the past 12 months, from 53% to 64%. Most of these gains have been at the expense of Ether, which has plummeted from 18% to 9% over the same period.

But if you look at the gray line representing altcoins, you’ll see their share has more or less held steady. It’s currently at about 26%.

Meanwhile, data from CoinGecko shows that the number of “dead” cryptocurrencies is rising substantially. More than 50% of the altcoins listed on its platform since 2021 — that’s 3.7 million — have failed. A report said:

“Alarmingly, the first quarter of 2025 alone saw the collapse of 1.8 million tokens, making up 49.7% of all recorded project failures.”

You’ll be unsurprised to hear that pump.fun is largely responsible for these eye-popping numbers. The platform, which allows anyone to create their own cryptocurrency, led to countless meme coins flooding the space, with only a few managing to achieve enduring success.

Analysts are divided over whether we’re going to see an “altseason” in this current bull cycle, much to the glee of Bitcoiners. Blockstream’s Adam Back is among those calling for investors to dump smaller cryptocurrencies in favor of gaining exposure to BTC, and treasury companies like Strategy and Metaplanet.

Meanwhile, the likes of HashKey Capital’s Xu Han has told Cryptonews that we may only see a small number of projects deliver healthy gains in the months to come — meaning the era of “broad-based altcoin rallies that were driven by speculation and FOMO” could be over.

For some altcoins, securing ETF approval may be the only way to maintain relevance in a fast-evolving crypto landscape. It’s also possible that we may see some projects join forces through mergers, leading to an era of consolidation in the altcoin market.

As CoinMarketCap says, we’re in “Bitcoin season” right now. That looks unlikely to change anytime soon.