Why 2025 Could Bring Another Altcoin Bull Market

• Bitcoin’s price surged over 100% in 12 months, sparking renewed crypto interest.
• The four-year bitcoin halving cycle drives price increases by reducing new coin supply.
• Altcoins may see gains as bitcoin investors diversify, but institutional shifts could affect them.

Since bitcoin’s price surged by more than 100% over the past 12 months, crypto is back in the headlines.

Enthusiasts who had been waiting out the bear market are preparing for what they hope will be another round of 2021’s crypto bull market.

Here’s why: The four-year bitcoin halving cycle, which cuts the rate of new-coin creation in half, is at the core of crypto’s boom and busts. Following the event, demand outpaces tightened supply, driving prices up over the following year. As bitcoin holders reap profits from the rise, some of those gains trickle down into altcoins in a scenario resembling the tide that lifts all boats.

So far, this cycle has been on repeat since bitcoin’s inception in 2009. And unless something changes, investors anticipate a similar pattern will play out this year. With the latest halving in April, expectations for a 2025 rally are running high.

Below is a chart that shows bitcoin’s price moves over time overlaid with halving events.

Matthew Le Merle, the CEO of Blockchain Coinvestors, says 14 years is enough data for crypto investors to trust a pattern. Historical context shows a cycle where bitcoin has three years of being the highest-performing asset and one of being the weakest.

The slight caveat is that bitcoin tends to slow down in the third year of the uptrend, and altcoins (cryptos besides bitcoin) catch up or even outpace it in percentage gains, which could make 2025 the year of altcoins.

The end of the latest crypto bull market caught many investors off guard following speculation that bitcoin could go to $100,000 and even $200,000 before entering a bear market. But those hopes were dashed after it touched only $70,000 before it plunged by about 74%. Altcoins followed shortly behind. The boom was also tainted by unprecedented investment scams and the bubble in nonfungible tokens.

Bitcoin is now bouncing back, as it did in previous cycles. The table from Morningstar below shows bitcoin as the highest-performing asset globally on an annualized basis in three-year increments. Assets are listed by rows in order of performance, with the highest at the top and lowest at the bottom. In 2024, bitcoin ended the year up by about 124%, placing it as the top-performing asset for the second year in this cycle.

In each of those cycles, altcoins trailed bitcoin in the first two years and rallied into steeper percentage gains in the third, according to data from Pantera Capital. The firm refers to the bitcoin-to-altcoin transitions as phases one and two, where the former is led by bitcoin price surges and the latter by altcoins. Once that has played out, the crypto market comes crashing down for the start of another bear market.

“Why is that?” Le Merle said. “It’s because once bitcoin has gone up three years in a row, a lot of bitcoiners have a lot of capital that they want to diversify, and they’re willing to move some of their capital into the altcoins.”

However, some factors could hinder the two-phase transition. First, there’s much more support for bitcoin because of an incoming crypto-friendly presidential administration, the addition of bitcoin exchange-traded funds, institutional money, and corporations and governments considering it in their treasuries, Le Merle said. All this could mean a stronger third year for bitcoin. The downside, he added, is the law of diminishing returns, which simply suggests that the bigger bitcoin gets, the harder it will be to compound steeper returns.

The makeup of crypto’s market participants has also shifted.

“In blockchain and crypto, it used to be very much individuals and retail folks making personal decisions,” Le Merle said. But as institutional and professional investors increasingly manage crypto, he expects the weight of the capital to shift toward top-tier crypto assets.

This means larger-market-cap altcoins could be up for a big comeback. At the same time, the newer offshoots with fewer use cases could be traded among speculative retail. But that doesn’t mean meme coins are falling away. Quite the contrary, traders will always be betting for a quick buck in every corner of the markets.

WendyO, the pseudonym for the crypto-influencer host of “The O Show” whose YouTube channel has almost 230,000 subscribers, said this cycle is already looking much different from 2021’s for a few notable reasons.

First, decentralized-finance protocols and NFTs, with digital artwork such as the Bored Ape Yacht Club collection, were wildly popular in the last bull market. This year, not so much — instead, traders are eyeing meme coins, specifically those pegged to anything AI-related.

The crazier and funnier a meme coin is, the higher it’s going, said Adrian Zduńczyk, a chartered market technician already witnessing a surge in bizarre-themed coins. He expects the crypto bull market of 2021 to return with even stronger volume over the next six to seven months.

Meme coins’ popularity stems from their easier accessibility and communitylike structure, WendyO, who says she’s also been trading them, added. In this corner of the market, venture capitalists aren’t getting in ahead of the gains before the coin offerings. There also aren’t as many founders making empty promises about use cases. So everyone knows what they’re getting into, which is like a gamified gamble where you get in, make money, and then get out before it goes to zero, she said.

Second, in 2021, ethereum’s blockchain was highly active for altcoin creation. This time, solana’s blockchain has become a popular launching pad for meme coins since it has cheaper transaction fees. In December, 1.2 million new tokens were launched on Solana’s chain, up from only 172 in January 2024, according to Dune.

Below is a chart from CoinGecko demonstrating the number of new cryptocurrencies entering the market since 2021.

As for the incoming Trump administration, WendyO said she believed it’s too soon to be overly enthusiastic about a crypto-friendly Washington before the new policies are made clear. While she expects widespread support for digital assets, she’s concerned institutional investment may be favored over retail or decentralized means of transacting. If that occurs, she believes it could bring the bull market to a premature halt, she said.

“We want to be able to transact 24/7, 365 days. We don’t want to be accredited investors to participate in crypto. If we want to buy bitcoin, we don’t want to be forced to go through BlackRock,” WendyO said. “And that’s a really big switch that we’re seeing this cycle. Last cycle, we didn’t have the bitcoin spot ETF, and we didn’t have the ethereum spot ETFs.”