The flood of new digital assets in 2024 has hindered the start of the long-awaited altcoin season, leaving crypto investors disappointed. Altcoin Season commonly kicks off with an explosive jump in the value of numerous tokens, but this time, the anticipated rally has failed to materialize.
As of February 9, the number of virtual currencies registered on CoinMarketCap exceeded 11 million. According to Dune Analytics, 37.7 million unique cryptocurrencies had been issued by early February. In contrast, only 20 million were created by the same time last year—a humongous 88.5% increase in just one year!
With so many cryptocurrencies competing for limited capital, investments have become more diluted across a broader range of assets. Instead of focusing on a select few high-quality projects, investors are now spreading their funds across millions of different coins, reducing the market capitalization of most cryptocurrencies.
Crypto analyst Ali Martinez believes that due to this market oversaturation, altcoin season "may never start again." According to him, a rapid rally requires substantial capital inflows into multiple digital assets in parallel. However, as new tokens pop up all the time, there is doubt about a steady rally.
One example is the controversial Official Trump token (TRUMP), launched by US President Donald Trump. This token has skyrocketed tenfold in value, reaching a market capitalization of $3.5 billion.
Drawing parallels with TRUMP, analysts suggest that future pumps may be local and only affect select digital currencies. If this trend continues, market participants should not expect a full-fledged Altcoin Season anytime soon.
Martinez may be right—no major bull run for altcoins appears to be on the horizon. Furthermore, as the number of cryptocurrencies has been expanding rapidly, the likelihood of a broad-based altcoin rally diminishes over time.
