What happened?
Galaxy Research found that 72 of the top 100 cryptocurrencies are down more than 50% from their all-time highs. Many mid- and lower-cap altcoins like Filecoin, The Graph, Tezos and Polkadot are still 80–95% below their peaks after the 2021 hype. At the same time, big names such as Bitcoin, Ethereum, Binance Coin and LEO remain within about 30% of prior highs, and XRP has surged strongly year-to-date.
Who does this affect?
Retail investors who bought into mid- and small-cap tokens during the 2021 bull cycle have been hit hardest as many projects failed to deliver. Token teams and sectors like gaming, AI agents and many memecoin projects face collapse or heavy dilution after floods of low-effort launches and large unlock schedules. Institutions and holders of large-cap coins are relatively less affected, as ETFs, buyback mechanisms and recurring-revenue models concentrate flows into fewer, bigger assets.
Why does this matter?
This signals a market shift toward a K-shaped recovery where liquidity and investor attention concentrate in a handful of strong projects, making a broad “altseason” unlikely. The fragmentation of liquidity across millions of tokens (with 3.7M projects failed and 1.8M dying in Q1 2025) reduces market depth, increases volatility, and raises barriers for new or mid-cap tokens to recover. For markets, that means more capital and price stability may flow to blue-chip and revenue-generating crypto assets while most smaller projects struggle or disappear, altering where traders and institutions allocate risk and capital.