Altcoin Market Faces Final Reckoning Before Potential 2025 Recovery

As Bitcoin’s dominance keeps rising, outperforming most altcoin pairs, investors are a lot more cautious about a near-term altcoin recovery. On the other hand, Wall Street is slowly beginning to recognize Ethereum’s transformative potential, which some analysts even compare to Amazon’s early days. Despite Ethereum’s evolving ecosystem and promising long-term outlook, institutional adoption is still very slow. Meanwhile, November will see huge token unlocks totaling $2.68 billion across projects like Memecoin (MEME), Aptos (APT), Arbitrum (ARB), Avalanche (AVAX), and Optimism (OP). This could add even more pressure to an already challenging altcoin market.

Painful Road Ahead for Altcoins?

Crypto markets have hit a rough patch lately, and according to the founder of ITC Crypto Benjamin Cowen, the worst may still be around the corner for altcoins. Cowen recently predicted on X that a final “altcoin reckoning” is in motion. This suggests that the next two months could see even more declines in altcoin prices. 

He projects that this period of pain for altcoins could last until December or potentially until the second week of January 2025. This is very similar to the market’s behavior during the 2019 bear cycle. During this period, there was a harsh downturn for altcoins before they eventually rebounded in 2020 and reached record highs in 2021. Cowen’s analysis suggests that a similar recovery pattern could unfold in 2025.

In addition to Cowen’s forecast, altcoin/Bitcoin pairs have been underperforming for the past three years as well. This trend also aligns with previous cycles where altcoin surges happened in the years after Bitcoin’s halving events, like in 2017 and 2021. 

Another trader who is known as “ardizor,” agrees with this view, and shared that the current altcoin cycle seems to be replaying the patterns from 2017 and 2021. However, not everyone agrees on the exact timing. Crypto investor “Sensei” told his 60,000 followers on X that he expects a major altseason to begin in less than ten days.

Meanwhile, Bitcoin’s dominance in the market is still rising, and reached its highest level since March of 2021 at 60.5%, according to TradingView. With Bitcoin’s market share solidifying, many analysts believe it will be challenging for altcoins to gain any traction until Bitcoin’s dominance drops back below 50%.

Bitcoin dominance (Source: TradingView)

On Nov. 4, the total crypto market cap dropped to $2.23 trillion, with altcoins taking the brunt of the losses. Ethereum (ETH) and Solana (SOL) dropped by around 2+% and 9+% over the past week in the market, according to data from CoinMarketCap. BNB’s price slipped by more than 5% over the same time period. This ongoing consolidation in the altcoin market has many people in the crypto space speculating whether a meaningful recovery is really possible in the coming months or if the final shakeout will have to run its course first.

Wall Street Overlooks Ethereum’s Amazon-Like Potential

Hope is not lost for all altcoins. Wall Street investors may not yet see the vast potential of Ethereum, which was the case with Amazon during its early days before it grew into a $2 trillion tech powerhouse. Leena ElDeeb, a research analyst at 21Shares, explained that large inflows into Ethereum-focused ETFs could happen only when Ethereum’s value becomes clearer to traditional investors. 

Ethereum was launched in 2015, and initially supported basic smart contracts. Now, it powers a decentralized finance ecosystem worth over $140 billion. Federico Brokate, 21Shares’ VP for the US business unit, sees some similarities between Ethereum and Amazon, and pointed out how Amazon began as a bookstore but evolved into a giant of e-commerce and cloud computing. 

Similarly, Ethereum could redefine industries with applications that people may not yet envision or fully understand. Although Ethereum’s current $320 billion market cap is just a fraction of Amazon’s valuation, Brokate believes Ethereum’s more than 200,000 developers compared to Amazon’s 7,600 employees at the end of the 1990s could give it an edge.

Despite competition from platforms like Solana, Ethereum is still dominant in decentralized exchanges, lending, and stablecoin markets. Major companies like BlackRock, PayPal, and Visa are also building on Ethereum’s infrastructure. 

However, investors are still very cautious when it comes to Ethereum, and many are choosing to wait and see before committing to spot Ether ETFs. Katalin Tischhauser from Sygnum Bank shared that spot Ether ETFs currently only receive around 9% of the inflows seen by spot Bitcoin ETFs over their first 90 days. Tischhauser is confident the landscape could change in a year as Ethereum’s potential becomes more widely recognized.

Ethereum ETF flows (Source: Farside Investors)

One factor that is contributing to Ethereum’s slow institutional adoption could be its layer-2 scaling solutions, which divert revenue away from Ethereum’s mainnet. CK Zheng of ZX Squared Capital mentioned that Ethereum’s declining revenue might deter some investors, who typically analyze cash flows for valuation. 

Despite this, Brokate is still unfazed as Amazon also faced losses in its early years but ultimately scaled by onboarding millions of customers. He believes that as Ethereum’s layer-2 solutions grow, they will eventually contribute substantial fees to the mainnet, restoring its revenue over time. 

In the meantime, the gradual adoption of spot Ether ETFs and Ethereum’s increasing role in major financial projects certainly proves that it has promising long-term growth, even if institutional investors are a bit behind in grasping its full potential.

November will See $2.68 Billion in Altcoin Token Unlocks

In other altcoin news, cryptos valued at close to $2.68 billion are set to enter the market as various blockchain projects conclude their vesting periods in November. According to data from Tokenomist, $900 million in tokens will unlock all at once, while around $1.7 billion will be released gradually. Major projects with some of the largest unlocks include Memecoin (MEME), Aptos (APT), Arbitrum (ARB), Avalanche (AVAX), and Optimism (OP).

November total value unlock (Source: Tokenomist)

Token vesting is used to prevent early investors and team members from selling large amounts of tokens too soon as this could negatively impact prices. Among the largest unlocks, Memecoin will release 3.45 billion tokens that are worth approximately $37.8 million, including daily linear unlocks of 10 million tokens valued at about $117,000. The MEME token’s current price is $0.01073, which is a 19+% drop over the past month.

Aptos, a layer-1 blockchain, will unlock 11.31 million tokens worth $93 million, with allocations for contributors, the community, the foundation, and investors. The APT token currently trades around $8.14. Avalanche will unlock 1.67 million AVAX tokens, worth about $39 million, and Optimism will release 31.4 million tokens worth $44 million, targeting investors and contributors.

Arbitrum, an Ethereum layer-2 solution, will unlock 92.65 million tokens worth $45 million, allocated to its investors, team, and advisors. The last major unlock for Arbitrum in March led to a price drop. The token now trades at approximately $0.48.