The altcoin market has once again entered a downturn, how should investors respond?

Since the beginning of 2025, the cryptocurrency market has shown a characteristic of sustained weakness. This trend is evident not only in small tokens on trading platforms but also affects on-chain tokens that performed well in the fourth quarter of 2024, which are now facing significant downward pressure.

Observing the performance of AI-related alts in 2025, we can see:

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

These data reveal a concerning fact: in less than three months, once highly regarded top projects have evaporated about 80% of their value. Although it cannot yet be asserted that this field has completely lost hope, the rapid loss of investor attention is an undeniable fact, and it will be difficult to reverse this situation in the short term.

At the same time, the celebrity token craze led by Trump has also faced a similar fate. Here are the declines of several major celebrity tokens since their peak:

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

There is a common perception in the cryptocurrency market: new concepts often attract funds more easily than old ones. However, compared to AI-related tokens, celebrity tokens have seen a more severe decline. In the face of the current difficulties in these two areas, is there still a possibility for breakthroughs in a market environment lacking emerging narratives?

The root cause of the current market predicament lies in an excessive reliance on conceptual hype. Most AI-related projects are still in the conceptual stage, lacking practical and easily promotable products. Even when some projects have launched usable services, they struggle to attract ordinary investors for long-term participation due to issues such as complex interfaces and poor user experience. Worse still, some project teams exaggerate their promotions to meet market expectations, leading to a failure to deliver on actual applications, ultimately resulting in investor disappointment and a gradual outflow of funds.

Regarding celebrity tokens, although Trump has sparked a wave of enthusiasm, the subsequent "celebrity effect decay" issue is evident: it is difficult to find public figures who can match Trump's influence. The follow-up effects from other politicians, internet celebrities, and stars gradually weakened, failing to maintain the initial market heat. This has led to the celebrity token market exhibiting a fleeting characteristic, with investor confidence rapidly eroding and coin prices consequently plummeting.

The fundamental reason for the severe volatility in these areas is that most projects only remain at the level of conceptual hype, lacking a sustainable profit model. Whether it's AI-related tokens or celebrity tokens, their core appeal overly relies on the quick influx of short-term funds and popularity, while lacking substantial content that can attract users for long-term participation. Once the hype fades, it becomes difficult to maintain prices, let alone attract new funds.

In the current market narrative fatigue, the key to standing out is to find projects that have "real yield" and are "willing to share with users". The so-called "real yield" refers not just to the temporary price increase at the time of listing on exchanges, but to the ability to continuously generate returns through actual business models and trading activities, and to feedback these returns to token holders or ecosystem participants.

Some decentralized trading platforms adopt models that are worth paying attention to. Their business models are similar to centralized exchanges, with the main source of revenue coming from contract trading fees. However, unlike traditional models, these platforms use the entire fee revenue to repurchase platform tokens, thereby closely linking the coin price with the platform's actual business performance.

Data shows that some leading decentralized perpetual contract trading platforms hold a significant market share, with daily trading volumes remaining at a high level and daily revenues being considerable. Even in the overall market downturn, these platforms have maintained a high level of activity, and their token prices remain relatively stable.

Overall, no matter how popular the market narrative may be, it will eventually pass. Projects that can exist in the cryptocurrency market for the long term must have product-market fit (PMF), possess high user stickiness, and generate real revenue. Investors should focus more on these long-term development factors when selecting projects, rather than short-term market speculation.