Crypto analyst Miles Deutscher attributes the delayed arrival of altcoin season to a shift in speculative capital from major altcoins to low-cap on-chain meme coins.
Through his X post Deutscher showed how Pump Fun served as a leading cause for capital to move away from major altcoins.
The launch of Pump Fun is directly correlated to the destruction of the altcoin market vs $BTC. 👇
The reason we’ve seen no major “alt season” across majors, is because the speculative capital that would’ve once poured into top 200 assets, instead decided to jump the gun and… pic.twitter.com/g04L2SCar2
— Miles Deutscher (@milesdeutscher) February 4, 2025
Bitcoin price growth usually activates a multi-step process where traders move their funds into mid-sized to high-market value altcoins while the crypto industry experiences “alt season.”
Meme Coins Disrupt Altcoins’ Rise
Altcoin season begins when at least 75% of top 100 crypto coins (or 75 out of 100) perform better than Bitcoin throughout three months of trading according to the CMC Altcoin Season Index. The value of altcoins measured by the index shows underperformance at its current 37 level.
According to Deutscher these new market attributes distinguish this cycle since investors prefer unpredictable low-cap to dominant altcoins. According to him speculative capital which would be directed to top 200 assets has instead moved toward on-chain low-cap assets.
Pump Fun operates as a platform dedicated to swiftly launching meme coins which creates an extremely risky environment resembling a casino. The initial adopters typically obtain substantial profits yet most retail investors end up losing their investment money because these tokens usually have poor market liquidity.
The current market plays out differently from last year by trapping investors in highly unstable on-chain tokens instead of affecting only centralized exchange-token losses. The impact from this current market situation represents an event that resulted in greater wealth loss than the bear market of early 2022, even though Bitcoin and major altcoins displayed long-term upward trends.
The shift in investor interests is caused by SEC regulations which Deutscher sees as impeding fair project launches through conventional means. According to his analysis the regulatory environment might change when the future Trump administration takes control.
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