The alts market is cooling down, how should investors respond?

At the beginning of 2025, the overall performance of the cryptocurrency market is sluggish. Not only have the prices of altcoins on exchanges continued to decline, but even the on-chain tokens that performed well in the fourth quarter of last year have not been spared.

Taking AI-related tokens as an example, within just under three months, several leading projects have seen astonishing declines:

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

Although it cannot be definitively concluded that the AI track has failed, it is an undeniable fact that investor interest has clearly weakened, and it is difficult to recover in the short term.

Meanwhile, the celebrity coin craze led by Trump has quickly cooled down. Since its peak, the major celebrity coins have dropped as follows:

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

Compared to AI tokens, celebrity coins have suffered even greater declines. In the absence of emerging hotspots, why are these two major tracks facing such a predicament? Is there still a breakthrough in the market?

Reasons for the Current Hotspots Falling into Dilemma

In terms of AI-related projects, most are still in the stage of concept demonstration and future planning, lacking practical and easily promotable products. Even though there are some available services, there are issues such as complex operations and poor user experience, making it difficult to attract ordinary users for long-term use. Worse still, some project teams overly exaggerate their promotions to cater to investors' expectations, while actual implementation keeps being postponed, leading to a loss of patience with funding and a rapid decline in project popularity.

In terms of celebrity coins, although Trump ignited a wave of enthusiasm, he subsequently encountered the issue of "celebrity effect decay." Following that, whether it was politicians or celebrities, it became difficult to replicate the initial funding enthusiasm and market attention. The follow-up effect gradually weakened, leading to the fleeting nature of the celebrity coin sector and a rapid loss of investor confidence.

The fundamental reason these hot spots are in trouble is that most projects only stay at the level of hype concepts, lacking real and sustainable profit models. Whether it's AI or celebrity coins, the core attraction relies on the rapid influx of short-term funds and popularity, but there is no motivation for users to participate long-term. Once the hype fades, it becomes difficult to maintain prices and attract new funds to enter.

Finding real yield projects becomes key

In the current market, where there is a lack of strong narratives, the key to standing out lies in finding projects that offer "real returns" and are willing to share them with users. "Real returns" refer not only to the speculative bubbles that arise when coins are listed on exchanges, but also to those that can continuously generate returns through actual business models and trading behaviors, and feedback these returns to token holders or ecosystem participants.

Taking a certain decentralized perpetual contract trading platform as an example, its business model is similar to that of centralized exchanges, with the main income coming from contract trading fees. However, this platform uses all the fees for repurchasing platform tokens, closely linking the coin price with product usage. According to data platform statistics, this platform accounts for about 45% of the 24-hour trading volume among all perpetual contract DEXs, with an average daily trading amount of 3.78 billion USD and daily income of about 1 million USD. Even during the current market downturn, this platform still maintains a high level of activity, and its token price also shows relative strength.

No matter how hot a concept is, it will eventually lose its luster. What can survive in the crypto market for the long term are those projects that find product-market fit ( PMF ), have high user stickiness, and generate real profits. When investors choose projects, they should pay more attention to the actual implementation and sustainable profitability of the projects, rather than just chasing short-term trends.