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Analysts warn oversupply of 36.4M tokens could end altcoin season

Analysts warn oversupply of 36.4M tokens could end altcoin season

GrafaGrafa2025/01/27 09:00
By:Mahathir Bayena

Cryptocurrency analysts are questioning the sustainability of altcoin seasons, periods when alternative cryptocurrencies outperform Bitcoin (CRYPTO:BTC), amid a significant oversupply of tokens.

Currently, over 36.4 million altcoins flood the market, a stark contrast to fewer than 3,000 during the 2017-2018 altcoin season.

“With such massive supply, the market has changed significantly,” stated Crypto analyst Ali Martinez highlighted this shift.

The oversupply has raised concerns about demand dynamics within the market.

Economist Alex Krüger echoed these sentiments, arguing that the abundance of tokens makes prolonged altcoin seasons unlikely.

“Supply of tokens is greater than demand,” he stated, suggesting that future rallies may be brief and sporadic.

Krüger predicted that upcoming altcoin seasons could last only “a few days to a few weeks at most,” complicating investment strategies for traders.

The influx of low-quality tokens and memecoins has further diluted the market, according to pseudonymous trader Ash Crypto.

He criticised exchanges for prioritising volume over quality by listing numerous memecoins, which often lead to substantial losses for retail investors.

In contrast, Ki Young Ju, CEO of CryptoQuant, emphasised that only a select few altcoins with strong use cases are likely to endure in this saturated market.

Despite these challenges, some analysts remain optimistic about specific utility-focused coins attracting institutional interest.

Michaël van de Poppe noted that Ethereum could lead a potential rally as institutional interest grows.

“I think that we’ll also see real utility coins take the spotlight as institutional interest continues to grow,” he remarked.

As Bitcoin's market cap has surged to $2.07 trillion since 2021, the total altcoin market capitalisation currently stands at $1.6 trillion, indicating a need for strategic adaptation in investment approaches.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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