The following is a guest post from Shane Neagle, editor -in -chief of the Tokenist.
Since the introduction of Altcoins, after Bitcoin had cleared the way for them, we have seen many projects in relatively short periods of 10x profits. It is also accepted that the crypto space oscillates between Altcoin and Bitcoin seasons, which suggests that more investment options are along the line.
A flood of memecoins has also flooded the market and served as a more robust gambling system (compared to online casinos). Because Crypto space lost a market capitalization of $ 530 billion in the last 30 days, it is wise to re -examine his basic principles.
Is such a concept like ‘Altcoin Season’ meaningful ahead? Is there more cryptos than cyclical speculation? To answer those questions, we must first remember stories in the past.
Merging in advance
During the evolution of the crypto room, Bitcoin de-Facto became the only proof-of-work digital assets that are worth considering, following Ethereum’s Merger In September 2022. As a transition from proof-of-work (POW) to proof-of-stake (POS), the merger represents a split into blockchain philosophies.
Although Bitcoin’s proof-of-work (POW) requires computational sources, Ethereum’s POS eliminates such barriers to increase transaction speed and efficiency. In other words, Bitcoin further distinguished itself as a store of value, while Ethereum focused more on cost-effective blockchain utility.
At first glance, this may seem completely complementary, but there are several underlying problems that eventually raised their heads.
- POW is more susceptible to decentralization in contrast with POS, which depends on the cumulative wealth of validators in the “Rich Get Richer” feedback loop.
- POS is separated from hard assets, such as energy and machines, while Bitcoin is based in it.
- And because the Pow of Bitcoin is partly physically, partly digital, it is less reproducible than POS as a commitment mechanism. This in turn contributes to the network effect of Bitcoin and in the long term against devaluation.
All in all, the POW-POS Bifurcation translates into POS fragmentation. If POS-based assets and POS-based platforms are competitive for Ethereum, more reproducible, they can be launched with minimal prior costs. With this basis there is not a single altcoin gain to hold on. Ultimately, this led to the fragmentation of the crypto market with a low accession threshold +34,000 digital assets.
From the perspective of Bitcoin Ethereum, as the two largest digital assets per market capitalization, POS-conducting fragmentation manifests itself as a corrosive effect at the price level of Ethereum.
To say it differently, the most important characteristics of Bitcoin, Pow and Scarcity, reinforce Bitcoin principles. Ethereum, on the other hand, suffers from erosion of network effect by competing POS chains, which offer a similar functionality and stimulation structure.
In addition, the increased complexity outside of Bitcoin creates a barrier for access to new capital inflow. Who can spend time filtering thousands of assets and bet that they have permanent force after a year? Even use advanced investors Popular futures trade algorithms Struggles often to effectively navigate through the fragmented market.
In fact, this is precisely the reason why Memecoin got mania grip. The complexity and fragmentation of the cryptomarkt lends itself to thinking of digital assets outside their basic principles. Instead, the focus is on the approval of celebrities, humor, viral marketing, which often turns into pump and dump schemes.
It is inevitable that this creates a negative feedback loop:
- Busy and confused Altcoin Market Births Memecoins.
- Rollercoasting memecoins eroding inevitably trust in the Altcoin market itself.
- Legitimate innovative projects will then have less chance of getting a grip because capital is incorrectly assigned.
But there is an even bigger problem than that. Let’s assume that this negative feedback loop made by Memecoins does not exist. One must consider whether there is even a market for blockchain -based solutions, as was previously thought.
Erosion of underlying basic principles
Due to anti-money laundering practices (AML) and Know-Your-Customer (KYC), Requirements have made great efforts around the world to subject the crypto ecosystem. Let us quickly remind ourselves of important promises before regulating sweeps took place:
Decentralization As elimination of intermediaries – almost everything is now on average through Fiat rails, including Transfers of self -intersection feuds.
Financial inclusion If access for non -banking/bottom run -it is still more convenient to use legacy banking than blockchain technology, which is inherently complex and requires digital literacy. According to the latter Emarketer reportCryptocurrency Payment Penetration affects a wall.
Although the number of crypto payment users is expected to rise by 82.1% from 2024 to 2026, this comes from a small total population base of only 2.6%. It may well be the case that a digital dollar, one stablecoin such as USDTWill experience this effort completely instead of a direct CBDC.
Censorship As a guarantee that transactions cannot be reversed or intercepted by governments and organizations. Governments regularly strive in innovative mechanisms to cancel such efforts, from debt To the prosecution of smart contract developers.
Although Treasury -Sanctions against Tornado -Contant Money Were destroyed in January, there are few indications that financial privacy will soon become a human right. In fact, indicators point in the other direction.
Breaking: The ECB digital euro will be launched in October. Main worries are:
-Real-time transaction tracking
– Potential for blocking payments
– Automatic tax deduction
– Restrictions on cash recordings
– Programmable money with expiry datesThey couldn’t … pic.twitter.com/uvqh750GBL
– Dr. Simon Goddek (@goddeketal) March 9, 2025
All in all, this friction between leads solutions and governments to an enclosed market. And if a blockchain -based solution has to be used, it is under conditions of the governments.
Finally the whole concept of web3 Is dubious as a decentralized, blockchain-based iteration of the internet. The Doge-Onthullingen of Elon Musk In the case of USAID financing, clearly indicate great efforts to push stories, control stories, suppress different opinions and de-legitimize.
A semantic, censorship-resistant web3 is fundamentally at odds with the needs of governments to maintain authority and legitimacy while pushing different agendas. To think that established information proliferation nodes such as Google, Microsoft and Facebook would be mad for web3 would be foolish.
Every government needs centralized nodes to maintain power. This was more than demonstrated in the case of the tap ban. Although this video reels -app is enormously superior to YouTube -Shorts, a leverage was drawn to remediate it and make it less relevant.
Again, this is another factor that contains the blockchain room into a micro-niche instead of continuing it in regular expansion. With this in mind, blockchain space is still worth being involved.
Crypto projects with income-generating endurance
Bitcoin will probably remain the most important focus of crypto investments, because of the unique, POW-based network effect. Although the recent crypto top of the White House was less bullish than expected, it was still positive in the long term. The decision to use seized bitcoins removed this sales pressure effectively from the table.
Likewise, President Trump seems to be serious The termination of the “War on Crypto”. But looking at the crypto space from a purely innovative solution perspective, which projects should retail investors consider during steep discounts?
- Sonic (s) -Terder FTM, this is the best performing layer 1 blockchain network with Subsecond transactive sinality. Only this opens new use cases such as high-frequency trade (HFT), Micropayments, in-game Economy, Dexs and IoT seat supplies.
- Near Protocol (near) -A Layer 1 -launch platform for Dapps that has received a grip for use in AI initiatives.
- The graph (grt) -Also adjacent to the AI story, this protocol -indexes data for AI use comparable to how Chainlink (link) is used by Dexe’s to strengthen decentralized financial services.
- Hey Anon (Anon) -This early project could be the key in resolving Defi complexity (access barrier) by using conversation -ai to managing Defi strategies between chains.
- Render (Render) -For example, with AI generation of assets, it is likely that this solution will be asked by making money from GPU-based distributed display.
These five tokens must be considered as long -term exposure during the deflation of crypto market. After all, it is unlikely that AI story will disappear soon.
In terms of top 10 income generation chains during the market efforts, crypto activity is clearly on the side of Low-Fiction Payment chains (Tron) and general purposes, well-performing chains (Solana, Avalanche). Ethereum still maintains a high ranking due to the large market share within the Defi Ecosystem.
Finally, what should crypto investors keep in mind?
Due to the inherent friction with governments, it is unlikely that digital assets will ever penetrate mainstream to a large extent. But within the retained ecosystem, investors must concentrate on long -term stories – AI, infrastructure and chain performance.
A real decentralized web3 should be interpreted as a nicheplay that will be prevented by deep bags of alphabet (Googl), Microsoft (MSFT) and Meta (Meta), AS Centralized node extensions of the USG. Likewise, retail investors would do well to expose their stock options as safer bets.
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