New York – On the face of it, 2025 looks like a banner year for crypto: Bitcoin hitting a record, an industry-boosting US President whose family is venturing headlong into the sector, and key legislation widely expected to be passed by the US Congress.
But look beyond the bullish headlines and the rally in Bitcoin, and a vastly different landscape comes into view. Most of the so-called altcoins – the catch-all term for all digital assets outside of Bitcoin and stablecoins – once touted as competitors to the original cryptoasset are nursing steep declines, with more than US$300 billion (S$382 billion) of market value wiped out so far in 2025.
The sea of red points to a wider malaise that is forcing parts of the industry to confront existential questions. Crypto was imagined by early enthusiasts as a universe where a host of coins competed for investor money, offering a diverse set of use cases. But as Bitcoin reigns supreme, that is giving way to predictions that large swathes of the sector will become a digital wasteland.
“I think they’re just going to die, frankly,” Mr Nick Philpott, co-founder of trading platform Zodia Markets, said of altcoins. “They’ll just wither away. Technically, a lot of this stuff will just sit there and gather dust in perpetuity.”
Bitcoin’s share of the total market value of cryptoassets has climbed by nine percentage points in 2025 to 64 per cent, the highest since January 2021, according to CoinMarketCap. Back then, cryptocurrencies were a largely unregulated space, crypto lending was roaring with few safeguards and nonfungible tokens were just starting to take off.
In sharp contrast, altcoins are faltering. A MarketVector index tracking the bottom half of the largest 100 digital assets, which more than doubled in the aftermath of Mr Donald Trump’s Nov 5 election victory, has since given up all those gains and is down around 50 per cent in 2025.
With Bitcoin soaking up the bulk of capital flows from investors in exchange-traded funds (ETFs), other parts of the market are increasingly left behind. Even Ether, the second-largest cryptocurrency, remains about 50 per cent below its all-time high after a modest rebound fuelled by inflows to spot ETFs investing in the token.
“Historically, Bitcoin’s moved and then that’s passed down into altcoins,” said Mr Jake Ostrovskis, an OTC trader at Wintermute. “We’ve not really seen that yet this cycle.”
Crypto is no stranger to mass extinction events. The 2022 market crash, punctuated by the implosions of algorithmic stablecoin TerraUSD and Sam Bankman-Fried’s FTX exchange, led to the demise of hundreds of projects. Thousands of coins still exist on their blockchains, with little or no activity – relegated to the status of “ghost chains” in crypto parlance.
What is different this time is that crypto is becoming a more regulated, institutionally driven marketplace, and that stablecoins appear to be the only tokens with a real shot at achieving means-of-payment status, due to the fact that they eliminate volatility.
In the past year alone, the market value of stablecoins has swelled by US$47 billion, and some of the world’s largest banks are entering the field. The Wall Street Journal reported in June that Amazon.com is studying a potential stablecoin.
That is putting pressure on altcoin projects to find ways to shore up their status and appeal to a wider base of investors.
“I’ve talked to a couple of projects that have been thinking about merging foundations, putting it up for governance, saying, ‘Hey, we can now be governed under this other authority’ – that authority being another altcoin community,” said Mr Kanyi Maqubela, managing partner at venture capital firm Kindred Ventures.
The shifting tides are also reflected in corporate behaviour. Modelled on Michael Saylor’s Strategy, a new breed of Bitcoin accumulators has emerged.
In April, a special-purpose acquisition company affiliated with Cantor Fitzgerald partnered with Tether Holdings and SoftBank to launch Twenty One Capital, seeded with nearly US$4 billion in Bitcoin. The Trump family, which is also getting involved in Bitcoin mining, has raised US$2.3 billion via Trump Media & Technology Group to create a Bitcoin treasury.
While similar vehicles have been set up recently to accumulate smaller tokens like Ether, Solana and BNB, they are much smaller.
Not all altcoins are floundering. Tokens like Maker and Hyperliquid that are linked to thriving decentralised-finance protocols have notched big gains in 2025.
“There’s certainly a subset of the market doing incredibly well – generally companies with real businesses, real revenues, and those revenues are being used to buy back tokens,” said Mr Jeff Dorman, chief investment officer of digital asset investment firm Arca.
There is also the prospect of more favourable regulations. The potential for US Securities and Exchange Commission (SEC) approval of ETFs backed by coins like Solana are stirring hopes of wider adoption. Another possible catalyst is the Digital Asset Market Clarity (Clarity) Act, informally referred to as crypto’s market structure Bill. The Clarity Act aims to provide a comprehensive regulatory framework, including delineating responsibilities between the Commodity Futures Trading Commission and the SEC.
“The Clarity Act has the potential to do for altcoins what ETFs did for Bitcoin and Ethereum: provide the regulatory legitimacy that unlocks real institutional capital,” said Mr Ira Auerbach, a senior executive at Offchain Labs.
Yet, according to Kindred Venture’s Mr Maqubela, the issue ultimately boils down to utility. He compares Bitcoin to gold and Ether to copper – the former has a capped final supply and the latter’s blockchain underpins much of crypto’s functionality – and says most altcoins are stuck in a sort of twilight zone, underpinned by big promises and not much else.
“I think a lot of them are going to whittle down to zero because they were driven by speculation without that mimetic value like Bitcoin, and they tried to be utilitarian without achieving any real scale,” he said. BLOOMBERG
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