The days of 100x returns are gone. Will the altcoin season return?

Author: Ciaran Lyons, CoinTelegraph; Translator: Deng Tong, Golden Finance

Cryptocurrency analysts say the high-risk, high-reward thesis of altcoins may favor the former, as the weak narrative driving the cryptocurrency market is unlikely to see big gains now.

Markus Thielen, head of research at 10xResearch, noted: “While tactical opportunities exist, the era of 100x returns may be over.”

He warned that the market expects an altcoin bull run this year, “retail participation remains sluggish, and few new projects have emerged that can attract non-crypto native traders.”

Thielen said that past altcoin bull runs had “unique characteristics” that attracted more funds, but this round of cycle has seen “tighter capital, as evidenced by lower total value locked and a lack of venture capital investment.”

“In the last cycle, the narrative that cryptocurrencies could replace the traditional financial system was widely accepted, but this cycle’s view is that many cryptocurrencies are short-lived and lack substantive support,” Thielen added.

Earlier this week, Solana-based memecoin GameStop (GME), which has no affiliation with the video game sales company, rose 2.727% as GameStop shares surged in nearly three years after trader Keith Gill first posted the meme from his “Roaring Kitty” X account.

GameStop briefly surged 2.727% as its share price rose. Source: CoinMarketCap

Michael van de Poppe, founder of MN Trading Advisory, claimed in a post on May 16 that a portfolio that mainly holds altcoins would carry a "relatively large" risk.

“What are the downsides to this bet? Relatively speaking, they are big. At the time of posting, my overall investment is already down about 20% in 1-2 weeks.”

Despite the risks, van de Poppe explained that he recently sold all his Bitcoin and switched to altcoins, claiming that he “could lose 50-80%.”

However, cryptocurrency investor Fabio Andreatta is skeptical that an “altcoin season” will occur.

“All you do is increase your risk,” Andreatta said in response to van de Poppe’s X post. “It is unlikely that altcoins will overtake Bitcoin. Most altcoins will never reach their ATH again.”

Bitcoin’s dominance (market share relative to the rest of the cryptocurrency market) suggests that the broader market has shifted capital away from altcoins.

According to data from TradingView, Bitcoin’s dominance is close to a new year-to-date all-time high, currently at 56.05%, up 2.12% over the past seven days.