Author:MediumLibrarian7100

Translation: Shenchao TechFlow

My post yesterday seriously angered those who are perpetually bullish. They did not respond substantively to my views on changes in crypto liquidity, merely brushing me off with pathetic "AI-generated nonsense," without even a proper rebuttal. So I am back again, entirely on my own, to explain to you why there has been a fundamental change in the liquidity of the crypto market:

Your altcoins performed poorly in 2024 to 2025, and will continue to do so—there's a reason for this. The reason is not insufficient liquidity, but rather that the structure of liquidity has fundamentally changed.

You will never see "altcoin season" again. Let me explain this to you properly …

Past Liquidity Structure (Before 2022)

In the early days, retail funds flowed into exchanges in a very predictable manner: we bought spot, used leverage, and then risk sentiment would trickle down the entire market cap ranking table. In simple terms, we would buy and hold assets on-chain, with on-chain activity being very active, which made the market reflexive—the rise of one asset would drive others to rise.

Current Liquidity Structure (After 2022)

Nowadays, most funds enter the market through institutional channels. What are institutional channels?

• Bitcoin and Ethereum ETFs (BlackRock, Fidelity, etc.)
• Corporate treasury reserves
• Custodial institutions
• Regulated financial products

The operation of ETFs is completely different from past retail funds. Those purchasing crypto exposure through brokerage accounts do not roll profits into random tokens—they buy "paper receipts" issued by large companies. Their passive exposure is locked into these regulated products, and we do not see any order book activity that used to trigger market-wide momentum chasing.

• In the past, those "always online" traders would see flows and frantically position themselves across the entire market capitalization curve.
• But this phenomenon has disappeared now.
• Corporate treasury reserves do not go after small-cap coins.
• Pensions do not mine on-chain.

In short: the liquidity that once freely flowed in the market, creating the conditions for altcoin season, is now trapped in heavily regulated packaging around the largest assets.

This is why you see BTC's market cap share soaring while most altcoins continue to bleed out.

Why the Old "Everything Rises" Environment Will Not Come Back

Most people still psychologically expect the past reflexive "everything will eventually rise" environment. But those early altcoin seasons only existed in a market that had the following conditions:

• A very limited number of tokens (no super fragmentation)
• No institutional infrastructure (at that time, these institutions were still heavily banning crypto)
• Fewer bots and MEV than human participants
• Minimal competition for liquidity and attention

Please listen to me carefully, because this is what the bulls will not tell you:

Even if a large amount of new liquidity floods in tomorrow, do not expect the classic altcoin season. We will see selective strong performance in a very few narratives.

But that kind of rotation driven by retail across hundreds of cryptocurrencies, which defined past cycles? That metagame has structurally collapsed.

The game itself has indeed changed!

Explosive Growth in the Number of Tokens

• As of 2021, historically, only about 20,000 tokens were created.
• In just 5 years since then, over 40 million tokens have flooded the market.

Please stop and really think about this increase.

Worse yet, AI is accelerating this problem:

• You can now automate the creation of tokens at nearly zero cost.
• Most narratives are "generated."
• The flood of influencer garbage information is unprecedented.
• The number of trading bots has exceeded human participants.
• The entire meme coin ecosystem is being effortlessly crafted by algorithms.

So liquidity is not only being dispersed across an ever-expanding number of assets, it is also being harvested by machines.

Conclusion

It has been nearly 48 hours, and no one has provided any substantial rebuttal to the fact that "the liquidity architecture has fundamentally changed." If you have no substantial content to contribute, please save yourself the embarrassment.

Selected Comments Translation

Latter-Amount-9304: I entered the market in 2016 and made money long ago. You just exited the liquidity. I once believed in crypto and its principles, but after attending those meetings and meeting those people in crypto … they are all scammers, 99% of them. Their goal is to take your money and cash out.

Intelligent-Radio237 (top quality rebuttal): There is one point that is correct in this statement: the market structure has indeed changed. But the conclusion "altcoin season is forever dead" is too absolute. Crypto does not trade in normal cycles … future altcoin seasons will not disappear; what will vanish is the free money, zero interest, 2021-style casinos. This distinction is important.

Leading_Wafer9552: People also forget that this cycle largely happened during quantitative tightening, while the previous major bull market benefited from massive quantitative easing and stimulus liquidity … future cycles may concentrate liquidity on fewer, stronger projects rather than indiscriminately rising everything.

nugymmer: There will be no altcoin season. You will never get rich from them unless you are extremely lucky or use heavy leverage with steel-like stop losses.