Crypto’s Altcoin Season: Are the Golden Days of High Returns Over?

As the crypto market evolves, expectations for explosive altcoin seasons, where non-Bitcoin cryptocurrencies rally high, may not be as strong as expected. Crypto analyst Willy Woo suggests that while these “alt seasons” may continue, their returns will likely weaken over time. 

This shift shows a more mature and selective market, where the intense speculations of past alt booms (like the 2017 Initial Coin Offering (ICO) bubble) are likely not to return.

Through an X post, Willy Woo shared that while smaller-cap coins will likely continue to rally after Bitcoin gains, the intensity and long duration of the rallies are expected to decline. According to Woo, this is because altcoins are a “higher-up” risk investment, attracting funds from investors looking for higher returns when Bitcoin’s growth slows. 

I haven’t talked about altcoins in years, I quit my interest in them after the “shit rolls downhill chart” mapping the performance of 10,000 of them. But someone asked me specifically and this is how I see altcoin market cap…

This cycle has been markedly different from others.…

— Willy Woo (@woonomic) October 26, 2024

Bitcoin Dominance and Memecoins Shape the Current Cycle

Bitcoin dominance is one of the key indicators use in predicting the start of altcoins rally. Currently, Bitcoin accounts for 59.3% of the market’s value, and many analysts believe that altcoins will only see fresh inflows when Bitcoin’s dominance reaches or beyond 60% — a level that usually signals a shift to smaller-cap coins.

Woo points out that the current altcoin rally atmosphere is also different from the previous ones, due to the nature of coins driving it. Memecoins have taken the spotlight in recent Alt seasons, which Woo likens to a “bubble casino” rather than innovation with real-world application. Unlike the early days of altcoins, where projects aimed to innovate, Woo believes the current cycle heavily relies on speculative, high-risk digital assets that often lack solid utility value.

This view contrasts with other perspectives, such as that of Mati Greenspan, who recently stated that the next bull run might focus on Bitcoin and its Layer 2 solutions rather than altcoins. Greenspan sees Bitcoin as the primary driver of the upcoming cycle, with its Layer 2 scaling solutions capturing more attention than speculative altcoin investments. 

However, the broader data supports Woo’s tempered outlook. As of 2024, the altcoin market cap has not been able to sustain growth beyond temporary rallies, with prices merely bouncing back to previous levels rather than surging to new all-time highs. Although, a full-blown altcoin season usually outperforms Bitcoin for a minimum of three months. Recent trends have shown only brief periods where altcoins outperform, before falling short of the previous highs. 

Caution Urged for Long-Term Altcoin Holding

Furthermore, Woo advises caution with the long-term holding of altcoins, as their market caps often reflect only the current successful projects, without including numerous failed ones over time.

While some market watchers remain optimistic that altcoin seasons could still deliver strong returns, Woo’s view reflects a more cautious perspective. As the crypto market matures and investor preferences shift towards projects with solid fundamentals and real-world applications, the days of high-flying altcoin seasons may be gradually fading — replaced by a market that rewards coins with utility and longevity over those with just speculative appeal.

Most importantly, investors need to think about these perspectives carefully, while remaining vigilant in an environment where shifts in market sentiment can be fast and dramatic.