The CEO of CryptoQuant, an on-chain market analytics firm, predicts that altcoins might not be the game-changer in 2025. However, analysts at Citi share a positive sentiment. How will 2025 turn out to be for altcoins, then?
CryptoQuant CEO Ki Young Ju tweeted on Jan. 10 that the altcoin market is in a “zero-sum PvP game”, where the gains are largely internal, with no new capital inflow in the market. This means that in the current altcoin market, for one person to win, another has to lose the exact amount. It’s reminiscent of a competitive game in which the overall money pool is not really increasing.
Ju says that Bitcoin’s (BTC) market value has doubled while the total market capitalization of altcoins is still under past all-time highs, with “only 3-5 altcoins” that have a real use case and robust narratives being the ones that can survive.
However, altcoins’ fate is predicted to have a different outlook. Citi analysts argue that the sector could be in for a much brighter future. Ethereum (ETH), the only cryptocurrency besides BTC given the go-ahead for spot ETFs, is considered an increasingly likely target of rotation within the market, reported Jinshi on Jan. 8, 2025.
Citi analysts believe that BTC’s 2024 breakout was something to behold, soaring 116% on the year, with major catalysts including the approval of spot BTC ETFs, the halving event that took place mid-April, and Donald Trump winning the U.S. election. However, ‘altcoin season’ in 2025 after a “strong year for Bitcoin” is more probable, says analysts, as ETH has been up 59% in a month’s time. Analysts also foresee growth for Ripple (XRP), Solana (SOL), and Tron (TRX).
How will altcoins perform in 2025?
In 2025, new narratives are likely to emerge and VC activity could rebound significantly. According to Pitchbook, crypto fundraising in Q1 2024 surged to $2.4 billion across 518 deals, reflecting a 40.3% increase in invested capital and a 44.7% uptick in deal volume compared to the previous quarter.
AI, for example, landed the largest funding in Q3 with $106 million at a $1.1 billion pre-money valuation. These numbers indicate an increasing appetite from investors for early-stage projects. Early-stage deals experienced a 148.3% year-on-year increase in median pre-money valuation. If these trends continue, investments in particular projects and categories that are well-positioned to succeed in the long run would see a surge, reinforcing both Ju’s focus on robust narratives and Citi analyst’s prediction of a wider “altcoin season”.
