A Bull Market, But at What Cost?!?
tl;dr: Stop buying memecoins.
This bull market sucks.
The last time I blogged about crypto investing, I was bullish on the industry, which I was sure would return to previous all-time highs (ATHs). The 4-year cycle was still very much in mind. Now here we are in 2025, the 4th year of the cycle, and certainly, we have a bull market. Right?
It is strange that BTC really jumped to a new ATH in the 3rd year of the cycle, but there is a great reason for that: a lot of new money came in, facilitated by the ETF approvals. That isn’t news. The rest of the crypto market had a nice rally too, and it seemed for a moment that perhaps the 4-year cycle was over. Is this a new paradigm that ushers in the hallowed supercycle? Maybe, but it isn’t wholly clear.
BTC may have exited the 4-year cycle, but it isn’t clear that the others have. Quite possibly, the rest of the crypto market (outside of, say, BTC, ETH, and SOL) doesn’t break free from the 4-year cycle yet. What stabilizes prices is the maturity of the market players and the liquidity they can provide. The institutions with the deepest pockets have the ability to provide liquidity in a way that smaller participants cannot. It ought to decrease volatility in the token prices where these institutions are involved.
A Seismic Shift in Crypto Policy: But Where Is The Adoption?
During the bear market, it was hard to imagine that the President of the United States would openly champion crypto. The sentiment lows of Operation Chokepoint 2.0, the numerous petty SEC court cases, and the large bust-outs of FTX and LUNA still linger in recent memory. It was difficult to imagine that we would break from the malaise, and yet, we all had the hope that somehow the ship would right itself. Every other cycle, the prices bottom out and then start rising again. The 4-year model still reigned. BTC should hit new highs and drag the rest of the market with it.
Now we have a US administration abundantly keen to support crypto. Now we can envisage a regulatory environment so clear and supportive that every major financial player — from Wall Street giants to Silicon Valley stalwarts — feels compelled to get involved. This is the bullish vision: an ecosystem where banks, Fortune 500 companies, and even government agencies are comfortable integrating blockchain technology into their everyday operations. In this scenario, crypto matures from a fringe interest to a mainstream asset class, earning a credibility it has long craved.
Such a shift should create a wave of innovation, as developers and entrepreneurs finally have the legal certainty needed to unleash ambitious projects. Public perception ought to also transform. Where many people currently see cryptocurrencies as high-risk or speculative, positive cues from top politicians and regulators could help normalize digital assets. This newfound legitimacy would then ripple across the globe, persuading other nations to update their policies. In short, a robust embrace by the U.S. might do more to propel crypto forward than any price rally or viral NFT drop ever could.
Muted Response
Where is all the new money? Trump took office and instilled the new policies, but the market didn’t move. Worse yet, the market has slid back a little. In part, there is the well-known effect of “buy the news, sell the rumor.” This is a short-term effect, so not something we need to worry about long-term. A bigger worry for me is that many adults have already purchased cryptocurrencies before and had their hands burnt. Diamond hands is a hilarious meme, but not everyone finds it so funny. People who are naïve to crypto and enter late in the cycle when the casino is in full swing simply lose money to the early participants. Every cycle, we have this gigantic boom and then the inevitable bust-out.
I ask myself, why would they return? Certainly, policy shifts will help, especially when we are talking about the largest economy in the world becoming pro-crypto. It seems boring to consider that crypto will be like stocks. The rises and falls are not as great as they once were, but at least the market keeps going up. This is something that may happen for BTC and perhaps for ETH or SOL. However, I don’t think this maturity will be seen across the board.
Even if the millennials don’t return directly with their own money, their pension schemes may end up buying into Bitcoin, so they will get exposure anyway. Most people cannot name the stocks in their pension portfolio, beyond perhaps knowing that they have exposure to (say) the NASDAQ or S&P 500. A younger generation may still be willing to gamble at the casino of crypto; they’ve seen fewer cycles and hold out hope. The generational split here is arbitrary and meant purely for illustration — focus on the idea rather than the exact categorization.
It Gets Worse: Too Many Tokens
Yet even in the face of potential regulatory breakthroughs, skeptics point to an inescapable fact: the crypto market has an overabundance of tokens, and countless more appear every month.
While new initiatives can signify healthy innovation, their sheer volume challenges the notion of a protracted “alt season” where nearly every coin enjoys extended periods of growth. Many altcoins may see brief rallies — a few days or weeks of hype — but sustaining widespread momentum becomes harder when the market is increasingly crowded.
This is economics 101: the laws of supply and demand. We have far too many new tokens and not enough new dollars.
Prices cannot rise on aggregate while new money is piling into memecoins.
The glut of tokens dilutes investor attention and capital, making it more difficult for newer projects to break through. Much like the stock market, where most equities fail to outperform benchmarks like the S&P 500 or the Nasdaq 100, a majority of crypto projects may also struggle to stand out. In the stock market, this places a greater premium on diligent research and strong fundamentals, but merely looking at blockchains with real-world utility is not enough. The crypto market is too inefficient. The “best” projects are often overlooked in favor of the projects with the most hype. Attention is everything, and it’s why memecoins thrived.
I fear that it could get worse still. What if it gets worse still with even more token launches? This would be bad for new projects trying to raise money. The freshest crypto teams are able to raise money from VCs and angels right now at reasonable valuations (I’m seeing a few on Echo — gud project), but what happens next? If the broad market is gambling on memecoins, there is no return on investment. “Oh no, not the VCs! Someone please think of the VCs.”
But — not so fast.
Where projects cannot “exit” to the market, they cannot raise investment in the first place. Veteran crypto investors will stop investing if it becomes impossible to make any sort of return. This seems like a harmful dynamic. Perhaps the investing will slow down, fewer teams will raise, and valuations will drop. However, I suspect that people will eventually stop buying memecoins when they realize they are a few thousand dollars down and the money is never coming back.
Wen Recovery?
I hope that memecoin trading significantly slows down such that the attention reverts back to the majors starting today. Although I wouldn’t be surprised if the market remains irrational until the end of the quarter, nor would I be surprised if the summer has something of a bust-out again (“away in May”). While memecoins won’t die, as NFTs didn’t, as alts didn’t, it could well be that memecoins which eventually offer some sort of utility or membership perks will see longer-term adoption. (yeah, I know Doge doesn’t and still thrives 🤷♂️).
My guess is that BTC, ETH, and SOL should do okay, even if the memecoin madness doesn’t end. Others like ADA and TRX have also been stronger than I expected. I’m not going to argue against them — it isn’t wise to argue with the market.
FYI, I had bet upon the ETH beta trade for this bull market, expecting it to outperform, but the experience has been humbling. This has taught me that even strong narratives can fail to align with market behavior, underscoring the importance of diversification and managing risk.
