Small Crypto Tokens Take a Big Hit: What's Going On?
The crypto world is facing a challenging period. Small crypto tokens, often referred to as altcoins, have plummeted to their lowest point in four years. This decline suggests that the concept of an "alt season", where these smaller tokens typically perform well, may be over.
Numbers Tell the Story
- Big US Stock Markets: The S&P 500 and Nasdaq-100 have seen significant growth over the past two years.
- Crypto: The CoinDesk 80 Index, which tracks the next 80 crypto assets after the top 20, experienced a sharp decline in early 2025 and continued to fall.
The MarketVector Digital Assets 100 Small-Cap Index also hit a new low in late 2025. This translates to over $1 trillion wiped out from the total crypto market value. While US stocks were growing, many altcoins were losing value and becoming more volatile.
Why Did This Happen?
Investing in smaller crypto assets did not yield any extra benefits. Instead, it added more risk. The question now is whether investing in these smaller tokens is worthwhile or if it's better to stick with bigger names like Bitcoin and Ethereum.
Key Altcoin Indices
- CoinDesk 80 Index
- MarketVector Digital Assets 100 Small-Cap Index
- Kaiko's Small-Cap Index
All three indices tell the same story: small altcoins are not performing well.
Implications for Investors
Big US stock indices have been performing exceptionally well, with significant growth and minimal drops over the past two years. In contrast, altcoins have been losing value and becoming more unstable.
The takeaway for investors is clear: investing in smaller altcoins did not provide any extra benefits but added more risk. The question remains: Is it worth investing in smaller tokens, or is it better to stick with the bigger names?
