Why investors are turning to altcoins and what it means for the market

According to analytics platform CoinGecko, 57 out of the top 100 tokens by market capitalization have outperformed Bitcoin (BTC) in recent weeks. This raises a key question for many investors and traders: has a new altcoin season begun?

Why are altcoins rising? A breakdown of the factors

Surge in interest toward innovative blockchains and Ethereum alternatives

Next-generation platforms like Solana, Avalanche, Sui, Aptos, Near Protocol, and Sei Network are emerging as technologically advanced alternatives to Ethereum. Their architecture is designed to prioritize:

• High throughput (e.g., Solana handles up to 65,000 transactions per second);
• Instant confirmations (within 1 second);
• Low transaction fees (under $0.01);
• Native support for scalability and parallel execution (especially in Sui and Aptos).

These qualities make them ideal for new dApp products, including decentralized exchanges, NFT marketplaces, AI-powered applications, and blockchain gaming.

Declining interest in Bitcoin as the sole "safe" cryptocurrency

Following the April 2024 halving, Bitcoin failed to meet bullish expectations. Contrary to forecasts, BTC remained within a narrow range of $82,000–$99,000, showing a muted response to reduced issuance. Investor attention has shifted toward second-tier assets with greater X-return potential:

• Institutional investors have become more active in DeFi and staking, where altcoins dominate.
• Gen Z investors prefer projects with real-world utility and a tech-driven focus, rather than digital gold.

Boom in NFT, GameFi, and artificial intelligence (AI) sectors

The crypto market has evolved into a financial, cultural, and technological ecosystem. In 2025, projects that integrate blockchain with:

• AI and neural networks (e.g., Fetch.ai, Ocean Protocol, Akash, Gensyn);
• 3D rendering (Render Token);
• Gamification and metaverses (Immutable X, The Sandbox, Xai);
• Meme culture (Pepe, Dogwifhat, Book of Meme)

They are seeing rapid growth. These initiatives go beyond pure trading, attracting artists, gamers, developers, and startup founders, driving a new wave of demand and long-term user engagement.

Technical indicators and market structure shifts

Charts reveal key signals pointing to the start of an altcoin season:

• Bitcoin dominance has dropped to ~48%, a historical precursor to altcoin rallies (similar to 2021 and 2017).
• Altcoin trading volumes have increased by 25–30% month-over-month.
• Liquidity is rising in DeFi protocols, especially in Layer 2 and Layer 3 blockchains (Arbitrum, zkSync, Starknet).

Many traders interpret this as a "capitulation of BTC dominance" and the beginning of capital rotation into younger, more ambitious projects.

Which tokens are leading?

Several altcoins have shown standout performance over the past 30 days. Fetch.ai (FET) surged 112%, leading the AI-related token space.

Render Token (RNDR) gained 76%, fueled by interest in 3D rendering and metaverse tech. Its integration with Apple and Unity platforms has strengthened market confidence.

Solana (SOL) rose 68%, continuing its growth as one of the fastest Layer 1 chains, supported by scalable DeFi and NFT applications, and improved network reliability.

Injective Protocol (INJ) climbed 43%, gaining traction in the DeFi sector with cross-chain integration and high throughput.

Sui (SUI) rounded out the top five with 51% growth, offering high-speed transaction processing and a strong focus on scalable dApps.

Altseason or temporary spike?

Some analysts caution that altcoin growth could be short-lived if BTC doesn't resume its bullish trend. A similar situation occurred in 2021, when overheated altcoins sharply declined following Bitcoin's downturn.

However, the current scenario is notably different. Today's altcoins aren't just "BTC clones" — full-fledged infrastructure ecosystems offering real products, from decentralized exchanges to business solutions and metaverse platforms.

May 2025 may well be remembered as the start of a new alt season. The market is shifting away from Bitcoin's dominance toward a diverse range of crypto projects with real-world utility. Still, as always in the crypto space, staying rational and avoiding hype-driven decisions is essential.