Alts market faces new challenges, how should investors respond?

Since the beginning of this year, the cryptocurrency market has generally been weak, with poor sustained growth. This trend is reflected not only in the alts on exchanges but even in the on-chain coins that performed well in the fourth quarter of last year, which have also experienced significant declines.

Taking AI-related tokens as an example, the decline of major coins in the past three months has been quite remarkable:

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

In less than three months, these once popular leading projects have already lost 80% of their value. Although it cannot yet be determined that this sector has failed, the loss of investor attention has become an undeniable fact, and it is likely difficult to reverse this situation in the short term.

Another highly watched track is celebrity coins. This trend was initiated by Trump, followed by other celebrities and even some countries imitating it. However, the decline of celebrity coins is more severe than that of AI-related tokens:

• Trump dropped by 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 saying in the cryptocurrency market: "Invest in new coins, not old ones," which means that capital always tends to choose newer concepts for speculation. However, compared to AI-related tokens, the decline in the celebrity coin sector is clearly more severe. So, what are the main issues facing these two sectors currently? In the current market environment, which lacks emerging concepts, is there still a possibility for breakthroughs?

Current Market Dilemma: Concept Speculation Prevails, Substantive Applications Are Scarce

In terms of AI-related projects, most are still at the "concept demonstration" and "future blueprint" stages, lacking practical and scalable products. Even if some operational services have indeed been launched on the market, they often suffer from complex interfaces and poor user experiences, making it difficult to attract ordinary investors for long-term participation. Worse still, some project teams, in order to cater to investors' expectations for "AI + blockchain", often first inflate prices through exaggerated narratives, while substantial landing applications are repeatedly postponed. Over time, funds lose patience, attention begins to shift, leading to a significant decline in the prices of related tokens.

In terms of celebrity coins, although Trump's involvement has brought significant attention to this track, the market subsequently faced the issue of "celebrity effect decay": it has become difficult to find a public figure who can surpass Trump in terms of topicality and influence. Although various political figures, internet celebrities, and stars from different countries have attempted to follow suit, none have been able to replicate the initial influx of funds and market sentiment. The market's following gradually weakened, leading to the characteristic of "ephemeral" in the celebrity coin track, with investors' confidence rapidly eroding and prices subsequently plummeting.

The reason these tracks are experiencing significant volatility lies deeper in the fact that many projects only stay at the "hype concept" level, lacking real and sustainable profit models. Whether it is AI-related projects or celebrity coins, their core narratives overly rely on the rapid influx of capital and popularity, but lack the motivation to keep users engaged in the long term. Once the hype fades, it becomes difficult to maintain prices, let alone attract new funds to enter again.

Looking for projects with real returns

To stand out in the current market environment, the key is to find products with "real yields" that are also "willing to share with users." The so-called "real yields" refer not only to the short-term price increases that occur when a coin is listed on an exchange, but also to the ability to continuously generate returns through actual business models and trading activities, and to provide feedback to token holders or ecosystem participants.

An example that fits this model is a certain decentralized exchange platform. The business model of this platform is similar to that of centralized exchanges, with the main source of revenue coming from contract trading fees. However, the platform chooses to use all the fees for repurchasing platform tokens, which means that the platform's revenue is directly linked to the value of the tokens. The amount of trading fees depends on the trading volume, so this platform has successfully closely tied the coin price to the product usage.

According to data statistics, the platform accounts for approximately 45% of the total trading volume in the perpetual contract DEX field within 24 hours, with an average daily trading amount of 3.78 billion USD and daily revenue of about 1 million USD. Even in the current market downturn, the platform still maintains a very high level of activity. This also explains why, despite the recent general decline in alts, the token price of the platform remains relatively strong.

No matter how popular a concept is, it will eventually become outdated. What can exist in the crypto market for the long term are those projects that find product-market fit (PMF), have high user engagement, and can generate real revenue.