- ETF approvals and verifiable revenue models will separate survivors from failed projects.
- Leveraged positions in Solana and others trigger panic selling, signaling potential capitulation phase.
Ki Young Ju, CEO of CryptoQuant, recently stated that most alternative cryptocurrencies may not survive the next market cycle. His analysis, shared via social media on February 25, suggests a divergence in performance between projects with verifiable revenue models and those lacking institutional or regulatory tailwinds.
Ju’s remarks align with current data: 24% of the top 200 cryptocurrencies by market capitalization have recently fallen to multiyear lows, according to market-tracking platforms.
The U.S. Securities and Exchange Commission’s potential approval of exchange-traded funds (ETFs) for specific cryptocurrencies could reshape investor behavior. As of late February, seven digital assets—Cardano (ADA), Solana (SOL), XRP (XRP), Litecoin (LTC), Hedera (HBAR), Dogecoin (DOGE), and Polkadot (DOT)—are under regulatory review for ETF eligibility. Applications for Trump-themed (TRUMP) and Bonk (BONK) ETFs were also submitted in January, signaling broader interest in niche assets.
Market analysts caution that recent price rebounds lack foundational support. Juan Pellicer, a researcher at IntoTheBlock, noted that leveraged positions in assets like Solana contributed to a $3.13 trillion drop in total crypto market value, creating conditions for accelerated sell-offs.
“The recent market correction, with significant liquidations (especially in assets like Solana) and a drop in total crypto market capitalization to $3.13 trillion, points towards a possible capitulation as overleveraged positions are unwound,” Pellicer said.
Pellicer defined this pattern as “panic-driven liquidation,” often preceding market recoveries.
“A lower number of daily active addresses across most altcoins compared to 2021 peaks suggests we are earlier in the cycle.”
Meanwhile, Marcin Kazmierczak of RedStone highlighted discrepancies between price movements and user engagement. Daily active addresses for most altcoins remain below 2021 peaks, suggesting speculative trading dominates current activity. Kazmierczak argued that sustained adoption—not short-term speculation—will determine long-term viability.
“The price recovery without a corresponding growth in daily active addresses indicates that we are likely in the early speculative phase before mainstream adoption begins,” he added.
Ju’s prediction hinges on two factors: ETF approvals and quantifiable revenue generation. Projects failing to meet these criteria, he implied, risk obsolescence. This contrasts with past cycles, where broad-based rallies lifted nearly all assets.
The SEC’s stance on ETF applications will likely influence capital allocation. Regulatory clarity, combined with measurable user growth, could separate viable projects from those reliant on hype. As markets consolidate, investors appear to favor assets with clearer paths to institutional adoption.
