What makes this round of crypto bull market unique?
TechFlow Selected TechFlow Selected
What makes this round of crypto bull market unique?
Explore the fundamental differences of this cycle and their impact on the remaining bull market.
Navigating Web3 tides with focused insightsWritten by: Sovereign Crypto
Translated by: Baihua Blockchain
Harsh reality has shown once again that while crypto market cycles may share some similarities, they are never perfect repeats. Institutional adoption driven by ETFs, shifting political landscapes, and macroeconomic struggles have collectively transformed the underlying structure of the crypto market—forcing us to reevaluate many of our previous assumptions.
1. Capital Flow Dynamics
In prior cycles, capital flows followed a relatively predictable pattern:
1) New capital first entered Bitcoin (BTC).
2) Then moved into Ethereum (ETH) and blue-chip tokens in search of higher returns.
3) Finally flowed into small- and micro-cap tokens, drawing retail investors chasing "life-changing gains."
However, capital flow patterns in this cycle have significantly shifted. The current crypto market can now be effectively divided into two ecosystems: institutional tokens and retail tokens.
2. The Institutional Ecosystem
Primarily accessed via spot ETFs for BTC and ETH. To date, capital has overwhelmingly favored BTC, pushing its price nearly 40% above its previous all-time high (ATH). As the BTC market approaches saturation, institutional capital will likely seek higher yields—with ETH ETFs being almost the only viable option. This shift could drive massive inflows into ETH ETFs, potentially triggering rapid price reactions in the less liquid ETH market (similar to the initial approval of ETH spot ETFs, when prices surged 15% on day one).
3. The ETH Rotation Effect
A rise in ETH prices may further spill over into blue-chip altcoins, as crypto-native companies holding actual ETH begin positioning early for the upcoming altcoin season. Currently, the ETH rotation appears imminent—but timing remains uncertain.
This leads to the second ecosystem: retail tokens.
4. Retail Capital Skipping BTC and ETH Entirely
This is the first time in crypto history that retail investors are completely bypassing BTC and ETH before moving into higher-risk assets. They realize they’ve already missed the optimal entry points for BTC and ETH from a "life-changing return" perspective, so they dramatically increase their risk appetite.
In the real world, people are struggling: inflation pressures, high taxes, stagnant job markets, and soaring living costs leave most unable to invest or save for retirement. Indifferent to BTC and ETH, they skip these so-called "rich people’s coins" (BTC, ETH, and blue-chips), download Phantom wallets, and dive headfirst into the seemingly endless world of Memecoins—searching for a lottery ticket that could change their fate. Most will fail and ultimately exit crypto entirely.
1) Retail capital flows have been completely inverted:
Capital flows directly into Memecoins, entirely bypassing considerations of technology or utility. Gains are concentrated among a small number of experienced "veterans," who act like souvenir vendors at tourist attractions—waiting for new retail entrants to arrive, then draining their wallets by selling them dreams of overnight riches ("Look at this person who turned $50 into $1 million—you can do it too!").
Currently, the altcoin market isn’t generating new wealth—it's merely redistributing existing wealth from retail investors to professional scammers. Memecoins, which initially emerged as fair-launched, anti-establishment altcoins, have now become highly manipulated scams: fraudsters hoard large allocations at launch, then execute rug pulls or worse. This game has an expiration date; the pool of extractable capital is limited, and once depleted, funds will seek new outlets.
2) Expectations and Implications
I expect the current "Memecoin casino" to eventually self-destruct. Top-tier Memecoins may survive and perform well, while the rest fade into obscurity—alongside the wealth of retail investors. Even in the best-case scenario, this remains a massive game of musical chairs where over 95% of participants end up losing.
The impact on major altcoins (like SOL, AVAX, etc.) is clear: they’ll require substantial injections of venture capital, institutional funding, and retail capital to ignite a new altcoin season. This could happen after capital spills over from BTC and ETH, when both institutional and retail whales start seeking riskier assets to deploy newly realized gains. Recently, whale wallets have begun net selling BTC.
5. GameFi’s "Stubborn Virus"
During the early phase of this cycle’s GameFi hype, many projects launched vaporware—low-quality games with inflated FDVs (fully diluted valuations), useless tokenomics, and numerous other flaws. This chaos damaged GameFi’s credibility.
Today, high-quality projects that spent years building in earnest face an uphill battle to overcome this negative perception and gain market attention. Nevertheless, genuinely promising GameFi projects do exist. Should one major hit emerge, it could spark widespread speculative frenzy across the entire GameFi ecosystem.
6. The State of Launchpads
Launchpads have nearly disappeared—but survivors may be poised for a strong comeback.
Venture capitalists (VCs) previously exploited retail investors to maximize value extraction, breaking the model: long lock-up periods, sky-high FDVs, exploitative centralized exchange (CEX) listing strategies, and predatory market-making practices crippled launchpads.
A new model is emerging with clear advantages: projects featuring low FDVs, high unlock ratios, and no CEX listings are far superior to old VC-backed launches. Investing in top-tier launchpads will become critical, as such opportunities grow scarcer and more competitive to access.
It’s certain that just a few 50x or 100x projects launching successfully would trigger a retail rush to buy launchpad tokens and secure allocation rights.
7. 95% of Tokens Are Unnecessary and Useless
Frankly, the primary function of crypto tokens is speculation. Only 5% of tokens offer real utility—representing partial ownership in revolutionary technologies and platforms. The rest are pure speculative plays destined to go to zero. Yet, picking the right project can yield enormous returns.
8. Market Dilution Creates Noise and Obscures Direction
In 2020, the total number of crypto tokens peaked at around 10,000 during market highs. Today, that same number is created every single day. The vast majority of these projects hold no value, yet generate overwhelming noise that drowns out truly innovative and valuable ones. Revolutionary projects do exist—but they’re extremely hard for average investors to find, especially those with only surface-level knowledge of crypto.
This also explains why many newcomers gravitate toward Memecoins. They don’t need to understand complex tech—just see a cute dog wearing a hat, whose sole "function" is having no function at all—plus the thrill of a lottery win. That’s enough to attract them.
9. KOLs Extract More Value Than They Provide
Influencers in crypto have devolved, with only a tiny fraction still offering genuine insight. Most now rely on absurd clickbait, shameless promotions, or outright fraud.
The rise of Memecoins has diminished the relevance of influencers' real data analysis—they’ve instead doubled down on unethical shilling and pump-and-dump schemes. Exercise extreme caution and avoid blindly following these "false shepherds."
11. MicroStrategy Could Become This Cycle’s GBTC
MicroStrategy ($MSTR) is seeing its premium to net asset value (NAV) skyrocket—a sign of strong traditional market demand for Bitcoin. However, as the cycle nears its end, this premium is likely to reverse into a discount. Watch this indicator closely; it could signal a market top. While "super-cycle" narratives will inevitably peak at the bull market summit, what follows will surely be a massive bear market collapse.
For those who can identify these signals, this might present an excellent shorting opportunity—though not in the short term.
12. Altcoin Season Is "Dead," Ethereum Is "Dead"... Ultimate Contrarian Indicator
The market is flooded with pessimistic claims that altcoins and Ethereum have no future. Yet, this is precisely the perfect contrarian signal.
Despite Ethereum’s underperformance, I remain firmly positioned in it, along with long-term altcoin holdings (some performing well, others poorly). Altcoin and Ethereum seasons typically only begin when everyone else abandons them to chase BTC parabolic moves—and finally FOMO into BTC at local tops.
13. ETF Options Will Drive Massive Volatility—Up or Down
On IBIT’s first trading day alone, nearly $2 billion in notional options volume was traded—mostly in call options (betting on rising BTC prices). Sellers of these calls often hedge by buying the underlying ETF, thus driving prices higher. This dynamic could continue unfolding over the coming months.
14. Regulatory Clarity Is a Major Bullish Catalyst, Removing Entry Barriers
In past cycles, capital entering crypto faced numerous obstacles: difficult on/off ramps, regulatory uncertainty, pending lawsuits, and excessive caution from exchanges and crypto firms. Now, this has fundamentally changed. The approval of spot ETFs and clearer regulations haven't just opened the floodgates for capital into crypto—they've also made it easier for funds to invest in crypto startups.
Everything is in place... No one could have predicted so many bullish catalysts aligning so perfectly. This bull market holds unprecedented explosive potential—including for altcoins and Ethereum. Stay patient!
Already realized catalysts include:
-
Approval of Bitcoin and Ethereum spot ETFs
-
Dramatic pro-crypto shift in Trump’s stance, advocating favorable regulation
-
Trump winning the election decisively
-
SEC Chair Gary Gensler resigning
-
Sovereign nations buying Bitcoin
-
China lifting its crypto ban again
-
Favorable legal precedents set in Coinbase and XRP cases
-
Stablecoin minting hitting record highs
-
Exchange balances of Bitcoin and Ethereum reaching all-time lows
-
MicroStrategy planning to purchase $42 billion worth of Bitcoin over the next three years
-
Bitcoin ETFs becoming the largest ETF product in history—orders of magnitude bigger than gold ETFs
15. Infrastructure Improvements Amplify Bull Market Potential
Exchanges, wallets, DeFi protocols, and onboarding from traditional finance have all improved dramatically. User interfaces and experiences are simpler and more user-friendly, continuously optimized under increasingly favorable regulatory conditions. These improvements drastically reduce friction and will attract far more retail capital. Once the bull market fully kicks in, the scale of capital inflow will be immeasurable.
16. Summary
This crypto bull run is unfolding with unpredictable dynamics. Yet, one thing remains consistently predictable in every cycle: retail investors’ inevitable emotional reactions—“The latest overhyped project is amazing, buy!” “Old undervalued projects are boring, sell!” “Altcoins are dead, buy BTC!” “Ethereum is done, dump it!”
These emotional responses always resemble the "Cramer effect"—perfectly serving as contrarian indicators. In the end, 95% of retail investors lose money. Strive to be among the 5%. Thinking inversely is key. Good luck to all!
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@coinmonks
