Will the real copycat season arrive in 2025?

Bitcoin’s breakthrough of $100,000 last week was undoubtedly a historic milestone. However, even as the leading cryptocurrency celebrates its achievement, many altcoins have begun to outperform Bitcoin, heralding the arrival of the altcoin season.

Since the beginning of the year, 20 of the top 50 crypto assets by market capitalization have outperformed Bitcoin’s impressive 124% gain. The rise in altcoin market capitalization, increased media attention, and the rise of the Altcoin Season Index have further confirmed this trend. In addition, a recent report from CCData showed that trading volume in November reached a yearly high and open interest also hit a record high. These signs indicate that the market’s risk appetite is rising. And this change is generally more favorable to altcoins because they have higher potential for gains.

Looking deeper, investing in altcoins is actually investing in Web3 and other blockchain-related industries. The industry is highly dependent on regulatory clarity, and the market has become more optimistic about this after the US election. In addition, according to the latest data from CryptoQuant, altcoin trading volume is not driven by BTC trading pairs. This means that the market is experiencing real growth, not just a rotation of assets from Bitcoin to altcoins. This may also mean that this time the altcoin season is no longer waiting for Bitcoin price consolidation, but may see both types of crypto assets rise simultaneously.

The altcoin rally since November seems to indicate that a larger altcoin season will come in 2025. Emerging crypto trends and technologies may attract the attention of institutional investors and venture capital. The following is a speculation on the potential and key narratives of the next altcoin season based on on-chain data and other trends.

1. Altcoin season is not just about price

Altcoin season is generally defined as a stage in which altcoins continue to outperform Bitcoin. This phase tends to occur in the last year of Bitcoin's four-year cycle, when market enthusiasm spreads from Bitcoin to other currencies, large-cap altcoins will re-approach or exceed their historical highs, while new narratives push small and medium-cap currencies to break unknown highs. Ultimately, this phase will culminate with widespread FOMO (fear of missing out) sentiment, pushing the entire crypto market into an overheated state. This overheating usually indicates that the market is about to adjust and eventually enter a bear market cycle.

However, altcoin seasons are not just about prices. They represent a comprehensive evolution of market activity, application penetration, and innovation. To date, each altcoin season has reflected unique technological changes and market trends.

The first altcoin season in 2017 was marked by the ICO boom and the rise of NFTs (remember CryptoKitties?). The second altcoin season in 2021 combines the rise of DeFi and the full-blown NFT and gaming craze. To support these developments, cheaper and more scalable Layer2 solutions have emerged. All of these innovations have withstood the test of the crypto winter and continue to develop to this day.

Looking ahead, the third round of altcoin season in 2025 is expected to bring new narratives and technologies, some of which are already in development and others that have yet to emerge.

2. Indicators of altcoin season

Multiple indicators indicate that the altcoin season is coming. Bitcoin dominance has declined, altcoins have outperformed Bitcoin, and their market capitalization has also hit a new high. However, the Altcoin Season Index and other related indicators show that the peak of altcoins may not have arrived yet.

In absolute terms, the total market capitalization of altcoins, calculated by deducting the market capitalization of Bitcoin from the total market capitalization of the crypto market, has reached an all-time high. According to Coingecko data, the current market capitalization is $1.89 trillion, surpassing the peak of $1.79 trillion set in November 2021. In relative terms, Bitcoin dominance has fallen from 60% to 51% since November.

However, both indicators include stablecoins and wrapped assets. Although they are crucial to market liquidity, they may not truly reflect the development of the altcoin market. In addition, in bull market conditions, such assets tend to favor altcoins because they have higher risk-return characteristics.

For a purer measure of the market, Blockchain Center's Altcoin Season Index excludes stablecoins and wrapped assets. The index defines the altcoin season as a period in which more than 75% of the top 50 altcoins outperform Bitcoin in the past 90 days. Recently, the index broke through the 75% threshold on December 2 and maintained it for a week. In the last round of altcoin season, the index remained above the threshold for nearly three months. This supports the view that the peak of the altcoin season may occur in 2025. The OTHERS index calculated by platforms such as TradingView is another important indicator for measuring the performance of altcoins. The index tracks the total market value of the crypto market after excluding the top ten currencies (including the two largest stablecoins). Although the index has risen 123% in the past 30 days (and then a pullback), it has not yet reached its previous historical high. The last time it rose 525% from its all-time high in 2017, indicating that there is still considerable room for growth.

Finally, Google Trends also reflects people's interest in altcoins. Taking May 2021 as the peak (index is 100), the current search heat has risen to 87, which is the highest level since then.

3. The key narrative of altcoins in 2025

As of 2024, three of the top 50 performing altcoins are Memecoin: Dogwifhat (WIF +2,027%), PEPE (+1,764%), and Dogecoin (DOGE +382%). Although Memecoins are often the symbol of altcoin season, they are unlikely to define the mainstream narrative of the crypto market in 2025.

According to Blockchain Center, BRC-20Token performed best among the new technologies emerging in 2023-2024. Although some people do not regard them as true altcoins, these tokens issued on the Bitcoin blockchain have risen by more than 1,000% this year with the help of technologies such as Ordinals or Runes. In the more traditional altcoin category, RWAs (Tokenization of Real World Assets) led the way with an annual growth rate of 717%, including tokenized versions of real-world assets and their supporting protocols. It was followed by AI-related tokens (+513%) and DePIN (decentralized physical infrastructure, +303%).

By 2025, new narratives are likely to emerge, and venture capital movements may reveal the most promising directions. According to Pitchbook, VC investment in the crypto space was relatively modest in 2023 ($10 billion) and accumulated $7.1 billion in the third quarter of 2024. Next year, its activity may return to the levels of 2021 and 2022, reaching $25.3 billion and $29.4 billion, respectively. This funding growth will flow to specific projects and broader sectors, driving the next wave of growth.

Finally, in the heat of the altcoin season, it is important to avoid being swept up in the market hype. Every bull market will eventually end in an adjustment (turn into a bear market), and only those tokens with strong fundamentals and practical application scenarios can survive in the next cycle.