2025 appears to be a big year for cryptocurrency, with Bitcoin setting a new record, a US president who is promoting the business and whose family is actively involved in it, and important laws that are anticipated to be approved by Congress.
Looking behind the upbeat headlines and the Bitcoin bounce, however, reveals a quite different picture. With more than $300 billion in market value lost so far this year, the majority of the so-called altcoins that were previously hailed as rivals to the original cryptoasset are on the fall.
A broader malaise is shown by the sea of red, which is making some sectors of the industry face existential issues. Early cryptocurrency advocates pictured a world with a wide range of use cases and a multitude of currencies vying for investor capital. The dominance of Bitcoin, however, is giving birth to forecasts that vast portions of the industry will turn into a digital wasteland.
Nick Philpott, co-founder of trading site Zodia Markets, believes altcoins will eventually expire. They’ll simply wither away. Many of these items will sit there indefinitely, gathering dust.
According to CoinMarketCap, Bitcoin’s proportion of the overall market value of cryptoassets has increased by nine percentage points this year to 64%, the highest level since January 2021. Nonfungible tokens were just beginning to gain traction, crypto lending was booming with little protections, and the cryptocurrency market was essentially uncontrolled at the time.
The term altcoins, which refers to all digital assets other than Bitcoin and stablecoins, is in fast decline. In 2025, a MarketVector index that tracks the bottom half of the top 100 digital assets has lost all of its gains and is down around 50%. The index nearly doubled following Donald Trump’s presidential victory on November 5.
The market is becoming more and more isolated as Bitcoin absorbs the majority of money flows from exchange-traded fund participants. Following a little recovery driven by inflows to spot ETFs investing in the token, even Ether, the second-largest cryptocurrency, is still almost 50% below its peak.
According to Wintermute OTC trader Jake Ostrovskis, Bitcoin has historically moved and then that has trickled down into altcoins. “So far this cycle, we haven’t really seen that.”
Mass extinctions are nothing new to the cryptocurrency world. Hundreds of projects failed during the 2022 market meltdown, which was dotted by the collapse of algorithmic stablecoin TerraUSD and Sam Bankman-Fried’s FTX exchange. According to cryptocurrency jargon, thousands of currencies remain on their blockchains with little to no activity, condemned to the position of “ghost chains.”
This time, however, things are different since the cryptocurrency market is becoming more institutionally driven and controlled, and stablecoins seem to be the only tokens that have a genuine chance of becoming a form of payment because they remove volatility.
Stablecoins have had a $47 billion increase in market value in the last year alone, and some of the biggest institutions in the world are getting involved. This month, Amazon.com Inc. was rumored to be researching a possible stablecoin according to the Wall Street Journal.
Altcoin initiatives are under pressure to improve their standing and attract more investors as a result.
He has spoken with a couple of projects that have been considering merging foundations and putting it up for governance, saying, ‘Hey, we can now be governed under this other authority’ — that authority being another altcoin community, according to Kanyi Maqubela, managing partner at venture capital firm Kindred Ventures.
Corporate conduct also reflects the changing tides. A new type of Bitcoin accumulator has surfaced, based on Michael Saylor’s Strategy. Twenty One Capital Inc. was founded in April by a special-purpose acquisition firm connected to Cantor Fitzgerald LP, Tether Holdings SA, and SoftBank. The business was seeded with about $4 billion in Bitcoin. Through Trump Media & Technology Group Corp., the Trump family has gathered $2.3 billion to establish a Bitcoin treasury and is also becoming involved in Bitcoin mining.
Though they are substantially smaller, comparable vehicles have lately been established to amass smaller tokens like Ether, Solana, and BNB.
Glimmers of Hope
Not all altcoins are struggling. This year has seen significant growth for tokens associated with successful decentralized financial systems, such as Maker and Hyperliquid.
According to Jeff Dorman, chief investment officer of digital asset investment company Arca, “there is undoubtedly a subset of the market doing incredibly well — generally companies with real businesses, real revenues, and those revenues are being used to buy back tokens.”
The possibility of more advantageous rules also exists. ETFs backed by currencies like Solana may be approved by the US Securities and Exchange Commission, which is raising expectations for broader usage. Crypto’s market structure bill, also known as the Digital Asset Market Clarity (CLARITY) Act, is another potential driver. A complete regulatory structure, including a division of duties between the SEC and the Commodity Futures Trading Commission, is what the CLARITY Act seeks to establish.
Ira Auerbach, a senior executive at Offchain Labs, stated that the Clarity Act has the potential to do for altcoins what ETFs did for Bitcoin and Ethereum: provide the regulatory legitimacy that unlocks real institutional capital. However, Maqubela asserts that the issue ultimately comes down to utility, comparing Bitcoin to gold and Ether to copper, noting that the former has a capped final supply and the latter’s blockchain enables much of the functionality of cryptocurrency. He claims that most altcoins are in a sort of twilight zone, supported primarily by lofty promises.
He believes that many of them would eventually fall to zero because they were motivated by speculation and lacked the mimetic value of Bitcoin. They also attempted to be utilitarian but failed to achieve any true scale, he added.
