Written by: Forbes

Translated by: AididiaoJP, Foresight News

The five largest altcoins by market capitalization—Ethereum, BNB, XRP, Solana, and TRON—currently have an average price about 60% lower than their historical peak. Over 740 million people worldwide hold cryptocurrencies, many of whom continue to accumulate. However, no one knows if another significant rise in altcoins will occur.

The continued dominance of Bitcoin reflects an increasingly cautious approach from investors, with a marked increase in market selectivity. Hyperliquid's HYPE token stands out due to its perpetual contract income, buyback, and destruction mechanisms—the protocol's aid fund has spent over $1.3 billion in the open market to buy back HYPE.

Solana leads in meme coins, real-world assets (RWA), stablecoins, and consumer applications, while Ethereum remains central to the smart contract platform. Industry executives generally believe that rather than anticipating another broad "altcoin season," funds are more likely to concentrate on projects that generate real income, attract real users, and solve real problems.

Chandler Fang, founder and CEO of t54, is committed to building trust infrastructure for AI agents. He believes the next catalyst could come from outside the crypto industry. He predicts a stock market correction will occur in the second half of 2026, redirecting liquidity back to digital assets, most of which will flow into mainstream coins.

"While altcoins may benefit, they will not take center stage," Fang stated in a written response. He sees the most promising opportunity as the combination of crypto and AI—autonomous agents that can independently hold wallets and trade are inherently suitable for blockchain infrastructure.

Jason Rindahl, CEO of Nebula DeFi tokenization company, also expects the recovery in 2026 to be uneven, depending on the sequence of capital rotation. "I expect capital to rotate selectively, first moving into Bitcoin, then large-cap assets like Ethereum and Solana, and only gradually spreading to higher-risk areas," he said.

When momentum returns, the first to rise are often the most speculative assets, such as tokens like Fartcoin or Unicorn Fart Dust. They have good liquidity and high volatility, quickly attracting retail investors. Observing these market corners is an effective way to gauge whether risk appetite has surpassed Bitcoin.

Founders who persist in building during a bear market have different focal points. Vitalik Buterin of Ethereum proposed a more streamlined Ethereum foundation, reducing ETH sales, while prioritizing censorship resistance, openness, privacy, and security, positioning the network as a hedge against centralized control. Solana's Anatoly Yakovenko focuses on execution, pushing forward the Alpenglow upgrade, which is expected to reduce transaction finality time to about 150 milliseconds in the third quarter.

Jeff Yan of Hyperliquid has built a rare profit-generating machine for 2026, utilizing perpetual contract income for aggressive buybacks and destruction. Charles Hoskinson of Cardano is more cautious, warning that with ADA prices hovering near multi-year lows, a wave of ecosystem project collapses may occur in the second half of 2026.

Stock-like Market: Three-tiered Differentiation Pattern

Gracy Chen, CEO of Bitget exchange, is skeptical that this cycle will see a traditional altcoin season. "This could be an era of increasing differentiation between winners and losers," she stated. She expects Bitcoin's dominance to remain in the short term, while the reshuffling of inefficient projects continues. Her boldest prediction points to 2030: by then, nearly 10% of global financial assets (including government bonds, money market funds, stocks, and private credit) will exist in tokenized form.

Eric Wade, editor of Stansberry Research's "Crypto Capital" newsletter, believes the biggest mistake investors make is viewing altcoins as a single asset class. He divides the market into three tiers. The first tier is infrastructure closely related to institutional demand—RWA tokenization, settlement, and on-chain private credit. This area has never stopped growing. The market cap of tokenized real-world assets has grown from around $5 billion in early 2025 to over $30 billion by mid-2026, while on-chain private credit yields continue to maintain between 8% and 12%, far exceeding government bond rates.

In June, the open lending network Morpho raised $175 million from venture capital firms like Paradigm and a16z, as well as traditional financial institutions like Apollo and VanEck, becoming the clearest signal. "This is key to changing the dialogue with government bonds and asset managers," Morpho's institutional growth head Dennis Bree stated, "They can finally deploy under familiar terms."

Wade points out that the second tier has essentially disappeared: those projects without revenue, users, or often even active teams, many of which have dropped over 70% since 2025.

The third tier includes community-driven projects that are overlooked by most investors but continue building regardless of the macro environment. Wade believes the next generation of winners is emerging from this area—Bitcoin and Ethereum originally also came from this category.

Selective Recovery

If a recovery in altcoins truly arrives, it is unlikely to resemble past bull markets. This market increasingly favors projects with income, adoption, and deep integration with traditional finance, while leaving purely speculative projects behind. The momentum of RWA, stablecoins, and AI infrastructure, along with potential regulatory benefits, may support the next phase of growth, but is unlikely to prop up every token.

Bart Smith, CEO of Avalanche Treasury Co., has a simple screening criterion: "What is its purpose? What problem does it solve?" Those coins and chains that cannot provide answers will continue to struggle regardless of the macro environment. Only projects that can provide answers are those he believes will recover and appreciate.

The next cycle of altcoins will be less of a "rising tide" situation and more like the stock market, requiring traders and investors to be more selective than ever before.