The cryptocurrency market underwent a dramatic shift from frenzy to freeze in 2025. The market liquidation event on October 10 wiped out over $19 billion, with the altcoin sector hit especially hard.
Many altcoins remain at depressed price levels today. For example, DEVVE is currently trading at $0.2076 on Gate, down 73.93% over the past year.
Metis (METIS) is trading at $5.56 on Gate, a far cry from its 52-week high of $148.87.
01 Market Performance
The altcoin market is showing signs of distress. Over the past year, prices for many altcoins have plunged, trading volumes have shrunk, and overall market sentiment remains pessimistic.
Bitcoin’s price surged to $124,000 this year, briefly surpassing Google in market capitalization and climbing to fifth place among global assets.
Yet, while Bitcoin soared, altcoins struggled. Arthur Hayes put it bluntly: "Shitcoins are sick."
Retail traders—once a major source of volatility and liquidity in the altcoin market—have largely disappeared this year. Saad Ahmed, Gemini’s Head of Asia Pacific, told DL News, "Those traders who used to make wild profits during these periods have vanished."
02 Underlying Causes
The troubles plaguing the altcoin market stem from multiple factors, including structural flaws and shifting market dynamics.
Hayes points out that many altcoins lack "product-market fit." Despite fully diluted valuations in the billions, when it comes to actual customers and revenue, they often have "nothing at all."
Many projects resemble venture capital tokens with high valuations and low circulating supply, making it difficult to attract new investors sustainably.
The October 10, 2025 market liquidation marked a pivotal moment for altcoins, with over $19 billion wiped out.
Hayes believes this triggered mass redemptions from hedge fund investors, leading to relentless selling pressure and trapping altcoins in a prolonged slump.
03 Signs of a Turnaround
Despite the bleak surface, Arthur Hayes sees signals of a potential turnaround.
With the Federal Reserve rolling out its new "Reserve Management Purchase" program—injecting $40 billion in liquidity each month—Hayes expects this to reshape the market landscape.
Even more crucial is regulatory clarity. 2025 is shaping up to be a watershed year for U.S. crypto regulation.
This year, Congress passed the first federal stablecoin bill, establishing a new regulatory framework for payment stablecoins. These measures are providing unprecedented certainty for the crypto market and clearing the way for large-scale institutional capital.
04 Shifting Trading Strategies
The new market environment demands a complete overhaul of trading strategies, and Arthur Hayes has laid out clear recommendations.
First, traders must abandon expectations of "history repeating itself." Hayes stresses, "This is a new phase, and new factors will drive new momentum."
The traditional pattern—Bitcoin rallies first, followed by altcoins—no longer applies. Traders need to rethink their strategies and focus on emerging market trends.
Second, rigorous project selection is essential. When choosing tokens, Hayes focuses on two core elements: project narrative and cash flow generation. He notes that today’s market places greater emphasis on whether a project can produce stable cash flows.
"If you buy at the right price, it’s not a problem," Hayes says. He emphasizes entering at reasonable valuations rather than chasing hype at inflated prices.
05 Specific Areas of Opportunity
Given the new market logic, certain altcoin sectors show stronger potential for recovery.
During recent volatility, Layer 2 scaling solutions have demonstrated relative resilience. For example, Metis traded at $5.56 on Gate as of December 22, up 8.39% from the previous day.
Decentralized finance protocols are another area to watch. Projects that consistently generate real revenue and deliver value to token holders—such as Pendle and Ethfi, highlighted by Hayes—are more likely to lead the next market rebound.
With regulatory clarity in the U.S., compliant stablecoins and regulation-friendly infrastructure projects may see new opportunities emerge.
Outlook
Just as the market was losing faith in altcoins, Arthur Hayes made a surprising move: "It’s time to dig through the trash."
The perpetual swaps pioneer is tracking price movements of tokens like DEVVE and METIS on platforms like Gate, gradually building positions.
The altcoin season never truly ends—the real question is whether traders are holding the tokens that will rise.
