Altcoin season, coming soon in 2025? Assessing the odds

• Altcoin market cap peaked at $1.6 trillion in late 2021 before plunging to $0.4 trillion in 2022.
• Despite the recent 75% decline in altcoin trading volume, the possibility of an altseason in 2025 remains.

Recently, Bitcoin’s [BTC] dominance fluctuating alongside the altcoin sector’s performance. From early 2022 to March 2025, Bitcoin’s price peaked at approximately $70,000 in late 2024.

At the same time, the number of active cryptocurrencies on CoinMarketCap surged to 11,000 before declining to 10,600.

This 400-altcoin drop aligns with broader market trends, mirroring a significant reduction in Web3 investments.

Between 2021 and 2023, Web3 funding plummeted from $33 billion to under $7 billion—a 74% decline, far outpacing the 38% contraction in the overall venture capital market.

The downturn stemmed from key events, including the FTX collapse, which eroded investor confidence, and regulatory uncertainties in major jurisdictions.

Additionally, AI investments soared to $50 billion in 2023, drawing capital away from crypto projects.

Historically, Bitcoin price dips have coincided with shrinking altcoin numbers, as seen during the 2022 “crypto winter” and the post-FTX fallout.

The latest decline in Bitcoin’s price from its peak suggests reduced investor enthusiasm for altcoins, further contributing to the decrease in active projects.

Altcoin market capitalization

Alphractal data on altcoin market capitalization and trading volume from 2016 to March 2025 further reinforces the market’s shifting landscape.

Altcoin market cap peaked at $1.6 trillion in late 2021 before plunging to $0.4 trillion in 2022. By late 2024, it had recovered to $0.8 trillion but has since begun declining again.

Trading volume followed a similar trajectory, surging to $400 billion in December 2024 before falling 75% to $100 billion.

Also, points worth noting in the price movements include the 2017-2018 surge to $0.8 trillion, the 2021 bull run, and the 2022 crash.

Since the latest decline in trading volume aligns with the 400-altcoin drop observed on CoinMarketCap, reflecting broader challenges such as regulatory uncertainty and shifting investor focus toward AI.

These factors have contributed to reduced public interest in altcoins, mirroring previous downturns.

Is an altseason possible in 2025?

Despite the recent 75% decline in altcoin trading volume, the possibility of an altseason in 2025 remains.

Past patterns suggest that altcoin market cap can grow even when trading volume lags, as demonstrated during the 2021 cycle.

Additionally, the convergence of AI, crypto, and gaming could attract institutional capital, particularly in a year where traditional investments are expected to underperform.

With speculative interest likely to resurface, undervalued altcoins could benefit from emerging technologies.

While market conditions remain challenging, the potential for an altseason persists, driven by innovation, institutional engagement, and strategic capital allocation.

Investors may find opportunities in projects that adapt to evolving market trends, positioning themselves for a potential rebound in the altcoin sector.