Analysis: Since December 2024, the cryptocurrency market, excluding Bitcoin, has been in a bear market, and expectations for Altcoin to outperform the market remain low.

According to Mars Finance, on February 9th, The Block reported that Bitcoin suddenly plummeted by over 20% this week. Although the price has since recovered somewhat, several crypto fund managers said the drop caught them off guard. Zaheer Ebtikar, founder and chief investment officer of Split Capital, stated, "I don't think almost anyone really anticipated that this level of panic selling would come so quickly." Many interviewees shared the view that the problem wasn't a single, clear trigger, but rather the speed of the market collapse: sentiment shifted rapidly, fear indicators soared, and massive spot selling triggered a chain reaction of liquidations, creating a cascading decline. Ray Hindi, co-founder and managing partner of L1D AG, said, "Many traditional finance (TradFi) themes became significantly overstretched and congested during January. The subsequent sharp deleveraging and pullbacks impacted the crypto market, which is still dealing with serious, unresolved structural issues left over from the October 10th liquidation." He believes this drop also reflects a structural cleansing process in the market. This reshuffling helps eliminate excess and allows truly useful projects to stand out. Cosmo Jiang, General Partner at Pantera Capital and head of the firm's liquid token strategy, stated that the recent volatility is part of a cumulative trend over the past few months. He pointed out that the non-Bitcoin token market has essentially been in a bear market since December 2024, describing the year-to-date movement as a continuation of a "rolling bear market" across most Altcoin markets. Accelerated selling pressure, stemming from the spread of risk assets, forced traders who had previously shifted to precious metals to sell crypto assets to meet margin requirements. Expectations for Altcoin to outperform the market remain low, with most investment managers indicating a shift towards high-quality, fundamentally driven investments. Joscha Kuplewatzky of Wintermute Ventures suggested that the market may currently be late in the cycle, making it unsuitable to bet on Altcoin outperforming across the board. He believes that unless retail investors become more active, any rallies are more likely to be short-lived and sector-specific. Furthermore, several investors indicated that cryptocurrencies are no longer the preferred destination for new capital.