What Are Altcoins? The Crypto World Beyond Bitcoin

The term “alts” originates from the English “alternative coin,” specifically referring to all encryption currencies other than Bitcoin (BTC). Although the term “山寨” often carries a negative connotation in the Chinese context, in the encryption field, it has become synonymous with technological diversity and innovation. Currently, there are over 22,000 types of alts globally, accounting for more than 40% of the total market capitalization of the encryption market.

Core Classification and Application Scenarios

Alts are not simply imitating Bitcoin, but are designed for different needs, mainly divided into six major types:

• Stablecoins: such as USDT, USDC, value pegged to fiat currency to reduce trading volatility
• Platform coins: such as Ethereum (ETH), Solana (SOL), supporting smart contract and decentralized application development
• Governance tokens: such as UNI, AAVE, granting holders the right to participate in protocol decision-making votes
• Privacy coins: such as Monero (XMR), ZCash (ZEC), enhancing transaction anonymity
• DeFi tokens: driving decentralized lending, trading, and other financial protocols
• Meme coins: such as Dogecoin (DOGE), relying on community culture for dissemination, with extremely high volatility

The rise of Ethereum particularly highlights the technological breakthroughs of altcoins—its smart contract functionality has spawned billion-dollar ecosystems such as DeFi and NFTs, fundamentally expanding the application boundaries of blockchain.

What is altcoin season? The stormy moment of capital rotation

Altcoin Season refers to a periodic phenomenon where there is a collective shift of funds from Bitcoin to alts, resulting in a rapid increase in the prices of most alts by 50% or even several times within a short period. This market trend usually lasts for several weeks to months, accompanied by high volatility and a surge in trading volume.

Historical Typical Cycle Review

• 2017–2018: The ICO boom drove Bitcoin’s dominance from 86.3% to a sharp drop of 38.7%, with alts like EOS seeing monthly gains exceeding 300%
• 2020–2021: The explosion of DeFi and NFTs, meme coin DOGE surged by 28,000%, while the total market cap of alts jumped from 30% to 62%
• End of 2024: The Solana ecosystem and AI sector (e.g. RNDR) lead the charge, with some small-cap tokens seeing weekly gains surpassing 150,000%

These cases reveal a common pattern: altcoin seasons often erupt when the Bitcoin bull market stagnates. BTC price In a sideways market or during a pullback, investors turn to high-risk, high-potential alternative assets, creating a “capital overflow effect.”

Four Major Data Indicators: Capture Altcoin Season Signals in Advance

Altcoin Season Index

This index tracks the performance of the top 100 alts (excluding stablecoins) against Bitcoin over a 90-day period. When the index surpasses 75 (meaning 75% of alts outperform BTC), it marks the official start of the altcoin season. As of June 2025, the index has risen from a March low of 13.1 to 23, entering the “neutral transition zone,” but has not yet triggered the threshold.

Bitcoin Dominance (BTC.D)

This refers to the proportion of Bitcoin’s market cap relative to the total market cap of cryptocurrencies. Historical data shows that when BTC.D falls below 55%, funds begin to rotate massively into alts. Currently, BTC.D is at 62% (down from 65% in May), and it needs to be continuously monitored to see if it will decline further.

Ethereum and alts Trading Volume

• Ethereum Performance: ETH is often seen as a barometer for altcoins. If the ETH/BTC exchange rate continues to strengthen (for example, in May 2025, ETH rose by 47%, far exceeding BTC’s 9%), it indicates a shift in capital.
• Surge in Trading Volume: The total daily trading volume of alts surpassing 80 billion USD or accounting for over 35% of the market total signifies the formation of enthusiasm.

Stablecoin Liquidity Reserves

The total market value of stablecoins is a “reservoir” of potential purchasing power. Currently, the market value of stablecoins has reached $255 billion (an annual increase of 104%). Once sentiment shifts, this capital can quickly flow into the altcoin market, becoming the “fuel” for upward movement.

Current Market Status: Key Data for June 2025

• Bitcoin price After reaching a historical high of $111,970 on May 22, it has consolidated around $104,000.
• Technical indicators: BTC’s RSI and MACD show that upward momentum is weakening, entering a “fatigue period.”
• Sector movement: Layer 2 projects (such as Base chain TPS exceeding 500) and AI tokens (RNDR, AGIX) have begun to outperform the market.

Conclusion: The market is in the “altcoin pre-season” stage. If BTC.D falls below 60% and the altcoin season index breaks 50, it may trigger a full market rally.

Investor Strategy: Layout Opportunities and Risk Control Points

Key Layout Tracks

1. Layer 2 Scaling Solutions: Benefiting from the high Gas fee pain points of Ethereum (e.g., Polygon, Arbitrum)
2. AI + Blockchain Integration Projects: Such as the decentralized computing network Render (RNDR)
3. Compliance Stablecoin Related Ecosystems: Such as the settlement application of USDC in payment giant Visa

Risk Management Principles

• Position Control: The volatility of alts often exceeds that of BTC by 3 times, it is recommended to allocate no more than 20% of the investment portfolio.
• Project Due Diligence: Screening must meet three criteria: clear technical white paper, development team publicly identifiable, and on-chain active users > 100,000.
• Cold Storage Protection: Use hardware wallets (like Tangem) to store assets, avoiding hacker attacks during peak trading periods.

Encryption analyst Tracer’s warning: “The end of altcoin season often comes more suddenly than its start.” When BTC.D rebounds 5% in a week or meme coins plunge 40% in a day, it’s time to decisively reduce positions.

Conclusion: A Battleground of Innovation and Bubbles

Altcoins have transformed from “imitation products” into the core carriers driving smart contracts, cross-chain interoperability, and the DeFi revolution, and their technical value has been validated. Although altcoin seasons provide high return opportunities, over 70% of altcoins will go to zero in a bear market. Investors need to steer with indicators (such as the altcoin season index, BTC.D) and anchor with value to capture real dividends amidst the turbulence of the encryption market.