Alts market enters a period of stagnation, how should investors respond?

The cryptocurrency market has been sluggish since the beginning of this year, a trend that has not only affected niche alts on exchanges but also significantly impacted on-chain coins that performed well in the fourth quarter of 2024.

Taking AI-related tokens as an example, the decline since 2025 is as follows:

• Virtual down 79.2%
• Ai16z dropped 85.5%
• AIXBT dropped by 68%
• Griffain dropped 80.3%
• Buzz fell by 72.4%
• Fartcoin dropped 67.5%
• ARC down 62%
• Swarms dropped 45%

In less than three months, this once highly regarded leading project in the field has seen a decline of up to 80%. Although it cannot be determined yet that this track has failed, it is clear that market attention towards it has significantly decreased, making recovery difficult in the short term.

Another striking trend is celebrity tokens. This wave was first initiated by Trump, followed by other celebrities and even some countries imitating it. However, the performance of these tokens is also underwhelming:

• Trump has dropped 77.1% from its peak
• Melania dropped 91%
• Vine dropped 92.7%
• jailstool down 93.5%
• Jellyjelly dropped 98%
• CAR down 98.5%
• Libra dropped 94.3%

There is a widespread perception in the cryptocurrency market: "new coins over old coins", which means that investors are more inclined to chase emerging concepts. However, compared to AI tokens, the decline in the celebrity token sector has been even more severe. So, what are the main issues currently facing these two fields? In the current market environment, which lacks emerging concepts, is there still a possibility for breakthroughs?

Current Narrative Dilemma: Overreliance on Concept Hype

Most projects in the AI agent field are still stuck in the stages of conceptual demonstration and future planning, lacking practical and scalable products. Even though some projects have launched usable services, they often suffer from complex operations and poor user experiences, making it difficult to attract ordinary investors for long-term participation. Worse still, some project teams, in order to cater to market expectations for "AI + blockchain," often inflate prices with exaggerated narratives, while actual applications have yet to materialize. Over time, investors lose patience and shift their attention, resulting in a significant decline in the prices of related tokens.

In terms of celebrity tokens, although Trump has attracted enormous attention, he subsequently encountered the issue of "celebrity effect decay": it is difficult to find another public figure who can match Trump in terms of topicality and influence. Following this, political figures, internet celebrities, and stars from various countries have tried to imitate, but none have been able to replicate the initial capital enthusiasm and market sentiment. The market's enthusiasm has gradually decreased, and the celebrity token track has shown characteristics of a fleeting phenomenon, with investor confidence rapidly eroding and prices consequently plummeting.

The reason why these tracks are experiencing severe fluctuations lies deeper in the fact that many projects only stay at the level of hype concepts and lack real and sustainable profit models. Whether it is AI agents or celebrity tokens, their core narrative relies on the rapid influx of funds and popularity, but lacks the motivation for users to participate long-term. Once the hype fades, it becomes difficult to maintain prices, and even harder to attract new funds.

Looking for Projects with Substantial Returns

To stand out in the current market lacking in narratives, the key is to find products that offer "substantive returns" and are "willing to share with users." The so-called "substantive returns" are not just the short-term gains when listed on exchanges, but rather the ability to continuously generate returns through actual business models and trading activities, and to provide feedback to token holders or ecosystem participants.

A certain decentralized exchange platform is an example that fits this model. It operates similarly to centralized exchanges, with primary revenue coming from contract trading fees. The platform uses all fees to buy back its platform tokens, and the trading fees are directly related to the trading volume, thereby closely linking the token value to the platform's actual business performance.

According to statistics from a certain data platform, this platform accounts for about 45% of the total 24-hour trading volume of all perpetual contract decentralized exchanges, with a daily trading volume of 3.78 billion USD and a daily income of about 1 million USD. Even in the current market downturn, this platform still maintains a very high level of activity, which is also the reason why its platform token has performed strongly recently amid the general decline of alts.

No matter how popular a concept is, it will eventually become outdated. The projects that can exist in the crypto market for the long term are those that have found the product-market fit, possess high user retention, and generate actual profits.