Too Many Tokens in Circulation? Analysts Sound the Alarm on Altcoins

The explosion in the number of altcoins concerns crypto market experts. With more than 36.4 million tokens in circulation today, compared to just 3,000 in 2017-2018, the question of the viability of a new altseason has become sharply relevant.

The abundance of tokens, a challenge for altcoins

The crypto market is facing an unprecedented situation: over 36.4 million tokens are now in circulation, compared to just 3,000 in 2017-2018, reveals Dune Analytics. This explosion of supply disrupts traditional market dynamics.

Analyst Ali Martinez highlights this radical change: “With such an abundance of tokens, it becomes unlikely to see all altcoins perform simultaneously as in the past.” Indeed, the era when Ethereum, XRP, and Litecoin recorded spectacular gains seems to be over.

Renowned economist Alex Krüger confirms this analysis: “The market is saturated. Supply far exceeds demand.” He now anticipates shorter periods of growth for altcoins, lasting only a few weeks.

Increased selection, towards the survival of the strongest

The abundance of projects makes selecting altcoins particularly complex. As Alex Krüger explains, choosing promising tokens is now akin to selecting the right stocks in the stock market. This difficulty is amplified by the proliferation of memecoins, often promoted by exchanges in a profit-driven logic.

Yet, some experts remain optimistic. Michaël van de Poppe predicts that utility tokens, backed by strong use cases, will attract institutional attention. According to him, Ethereum could lead the next rally thanks to its multiple applications.

Ki Young Ju, CEO of CryptoQuant, shares this view: only robust projects will survive, while others will be eclipsed by leaders like Bitcoin, whose market capitalization has doubled since 2021.

The excess of tokens marks a turning point for the crypto market. Extended altseasons now seem unlikely, but the rise of utility tokens and the growing interest from institutions could redefine the ecosystem. The key lies in a wise selection of assets as competition intensifies.

The altcoin market is entering a critical phase. While the plethora of supply weakens altseasons, savvy investors could focus on solid and proven projects. In this saturated environment, identifying long-term opportunities will be essential. Crypto is evolving, and with it, its cycles.