The altcoin market has fallen into a slump again. How should investors respond?

Since the beginning of 2025, the overall performance of the cryptocurrency market has been weak. Not only have small coins on exchanges seen significant declines, but even the on-chain projects that performed well in the fourth quarter of last year have not been spared. This situation is not only reflected in the alts on exchanges; even the on-chain coins that performed well in the fourth quarter of 2024 are facing the dilemma of substantial declines.

Taking AI-related tokens as an example, in less than three months, several leading projects have seen astonishing declines:

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

These data indicate that even the currently popular AI sector is difficult to thrive on its own. While it cannot be directly concluded that this sector has failed, it is an undeniable fact that investor attention has significantly declined, and this trend seems difficult to reverse in the short term.

Another highly watched track is celebrity coin. This trend began with a certain political figure and quickly spread to other celebrities, with even some countries joining in. However, the decline of celebrity coin has been even more severe:

• Trump dropped 77.1%
• Melania dropped 91%
• Vine dropped 92.7%
• jailstool dropped 93.5%
• Jellyjelly dropped 98%
• CAR dropped by 98.5%
• Libra dropped 94.3%

Compared to AI tokens, the decline in the celebrity coin sector is even more severe. What are the main issues currently facing these two sectors? In the current market environment, which lacks emerging narratives, is there still a possibility for breakthrough?

Current Narrative Dilemma: Concept Hype Prevails, Substance Application Lacks

The main issue in the AI token sector is that most projects remain at the stage of conceptual demonstration and future planning, lacking practical and scalable products. Even when some usable services are launched, they often struggle to attract ordinary investors for long-term participation due to complex operations and poor user experience. More seriously, some project teams, in order to cater to the market's expectations for "AI + blockchain," often inflate prices through exaggerated promotions, while the actual implementation of applications is repeatedly delayed. As time goes on, investors' patience wears thin and their attention shifts, leading to a significant drop in the prices of related tokens.

The celebrity coin sector is facing the issue of a diminishing "celebrity effect." Although the political figures that initially sparked the craze had a very high level of public attention, it has been difficult to find public figures who can match their influence subsequently. Other political figures, internet celebrities, or stars from other countries have tried to imitate this, but they cannot replicate the initial influx of funds and market sentiment. As the number of followers decreases, the celebrity coin sector exhibits characteristics of a fleeting phenomenon, with investors' confidence rapidly eroding and prices consequently falling.

The fundamental reason for the significant volatility in these sectors is that many projects remain at the level of speculative concepts and lack real and sustainable revenue models. Whether it is AI tokens or celebrity coins, their core narratives overly rely on short-term capital and hype, lacking the motivation to attract users for long-term participation. Once the hype fades, it becomes difficult to maintain prices, let alone attract new capital.

Looking for Projects with Real Returns

In the current market environment where narratives are lacking, the key to standing out lies in finding products that offer "real returns" and are "willing to share with users." "Real returns" refer not just to short-term price increases when the coin is listed, but to the ability to continuously generate returns through actual business models and trading activities, and to pass these returns back to coin holders or ecosystem participants.

An example that fits this model is a decentralized perpetual contract trading platform. The business model of this platform is similar to that of centralized exchanges, with the primary revenue coming from contract trading fees. However, unlike the traditional model, this platform uses 100% of the fees for repurchasing the platform's tokens. Since trading fees are directly linked to trading volume, this mechanism effectively ties the value of the tokens closely to the actual business performance of the platform.

According to a certain data platform, this platform accounts for about 45% of the total trading volume in the perpetual contract DEX market over a 24-hour period, with an average daily trading volume of 3.78 billion USD and daily revenue of about 1 million USD. Even in the current market downturn, the platform maintains a high level of activity. This also explains why the token price of this platform can remain relatively stable in the recent environment where alts have generally declined.

Conclusion

No matter how popular a narrative may be, it will eventually fade away. What can truly exist in the crypto market for the long term are those projects that find product-market fit (PMF), have high user stickiness, and generate real profits. When choosing investment targets, investors should pay more attention to the substantive content of the project and its long-term development potential, rather than short-term market speculation.