Recently, many investors have been questioning why altcoins are underperforming, especially in comparison to the previous cycle after Bitcoin's (BTC) halving, which led to the DeFi Summer where many altcoins saw substantial gains. This time around, except for some MEME coins, most altcoins haven't shown significant price changes. Here are the main reasons for this phenomenon:

  1. FTX Bankruptcy Leading to Liquidity Shortage: The collapse of the FTX exchange has directly resulted in a shortage of liquidity in the market. Due to leverage effects, the affected capital volume is larger, making investors more cautious and less willing to take risks on more volatile altcoins. The lack of sufficient liquidity limits trading activity and price growth for altcoins.
    1. Approval of BTC and ETH ETFs: The approval of Bitcoin and Ethereum (ETH) ETFs has attracted more funds to these two major cryptocurrencies, diverting investment interest from altcoins. The introduction of ETFs has drawn substantial on-exchange and off-exchange funds to BTC and ETH rather than riskier altcoins.
      1. Impact of DeFi: In previous cycles, the market mainly relied on secondary market trading and speculation. The emergence of DeFi (Decentralized Finance) provided stable yield products, attracting a significant amount of funds to less volatile stable investment products. This shift reduced trading volume in the secondary market and weakened the performance of altcoins.
        1. Low Expectations for Governance Tokens: Many altcoins exist primarily as governance tokens, which have not attracted significant retail investor interest. Market expectations for governance tokens are low. Even for leading projects like Uniswap and Optimism, the high VC (Venture Capital) share and slow governance progress have led to a disconnect between token prices and project development, resulting in low investor interest.
          1. Increased Market Maturity: The cryptocurrency market has evolved from its early wild growth stage to a more mature phase. As the market matures, investors have become more professional and cautious. The days of easily making money just by buying coins are over, requiring more in-depth research and analysis to achieve returns.
            1. Dispersed Market Funds: With more and more market sectors and investment opportunities emerging, funds have become more dispersed. This dispersal of capital means that funds are no longer concentrated in a few altcoins, leading to relatively poor performance of these coins.

              Future Outlook

              Although the current performance of altcoins is lackluster, investment opportunities still exist. Investors need to abandon past reliance on luck, summarize their experiences, reduce complaints, and continue to invest time and effort into research. While the investment difficulty has increased, professional investment strategies and continuous learning can still yield returns in a complex market environment.

              Overall, the poor performance of altcoins is due to multiple factors, including liquidity shortages, increased focus on major cryptocurrencies, the impact of DeFi, low expectations for governance tokens, increased market maturity, and dispersed funds. Future investments will require more professional knowledge and strategies to navigate the increasingly complex market environment.

              I hope this helps! If you have any other questions, feel free to ask.