The altcoin market is facing another winter, how should investors respond?

At the beginning of 2025, the cryptocurrency market shows a persistent weakness. This downturn is evident not only in various tokens on trading platforms but also in on-chain assets that performed excellently in the fourth quarter of 2024, which have not been spared from difficulties and are facing significant depreciation.

Let's take a look at the performance of AI-related tokens in 2025:

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

In less than three months, once-popular leading projects have shrunk by 80%. Although it cannot be definitively concluded that this sector has failed, the sharp decline in market attention is an undeniable fact, and it is unlikely to easily attract investors' attention again.

Let's take another look at the situation of celebrity-related tokens, the decline since the peak is also astonishing:

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

There is a saying in the cryptocurrency circle: "Invest in the new, not the old," which means that funds always favor the latest trends. However, compared to AI-related tokens, the decline of celebrity coins has been even more severe. So, what kind of problems are these two sectors currently facing? In the current lack of new concepts, is there still a possibility for breakthroughs?

Current Market Dilemma: Concept Speculation Prevails, Substantial Applications Lack

In terms of AI-related projects, most are still in the stage of concept demonstration and future planning, lacking truly usable and widely promotable products. Even for a few services that have been launched, there are often issues such as complex operations and poor user experience, making it difficult to attract ordinary investors for long-term participation. Worse still, some project teams, in order to cater to investors' expectations for "AI + blockchain," often hype up prices with exaggerated narratives, while actual applications keep being delayed. Over time, funds lose patience, attention begins to shift, leading to a significant drop in the prices of related tokens.

In terms of celebrity coins, although Trump sparked a wave of enthusiasm, the subsequent "celebrity effect" was difficult to sustain. Following this, political leaders, internet celebrities, and stars from various countries rushed to emulate it, but they could not replicate the initial funding fervor and market sentiment. As market enthusiasm gradually waned, the celebrity coin track displayed characteristics of a fleeting moment; investor confidence quickly dissipated, and prices naturally fell as a result.

The reason why these tracks are experiencing significant volatility lies deeper in the fact that many projects only remain at the "speculative concept" level, lacking real and sustainable profit models. Whether it is AI-related projects or celebrity coins, their core narrative relies on the rapid influx of capital and hype, but lacks the motivation to keep users engaged in the long term. When the hype fades, it becomes difficult to maintain prices, let alone attract new capital.

Looking for projects with substantial returns

To stand out in the current market environment, the key is to find products that offer "substantial returns" and are "willing to share with users." The so-called "substantial returns" refer not only to the short-term gains made at the time of listing but to the ability to continuously generate returns through actual business models and trading behaviors, and to feedback these returns to token holders or ecosystem participants.

Some decentralized trading platforms have adopted this model. Their revenue primarily comes from contract trading fees, similar to centralized exchanges. However, the difference is that these platforms use all the fees for the repurchase of platform tokens. Since trading fees are directly related to trading volume, this model closely ties the value of the tokens to the platform's business.

According to statistics, certain decentralized perpetual contract trading platforms processed approximately 45% of the total trading volume within 24 hours, with an average daily trading volume of $3.78 billion and daily revenue of about $1 million. Even in the current market downturn, these platforms maintain a very high level of activity, and their token prices have performed well in the recent environment where alts have generally declined.

No matter how popular a concept is, it will eventually cool down. Those projects that can exist in the cryptocurrency market for the long term are still those that have found the product-market fit, possess high user stickiness, and can generate substantial revenue.