Analysis: Since December 2024, the token market has been in a bear market except for Bitcoin, with altcoins underperforming market expectations.

BlockBeats News, February 9th, according to The Block, this week Bitcoin suddenly plummeted over 20%. Although the price has partially recovered since then, managers of several crypto funds said they were caught off guard by this drop. Zaheer Ebtikar, Founder and CIO of Split Capital, said: "I think almost no one really anticipated that panic selling of this magnitude would come so quickly." The common view of many interviewees is that the issue was not a specific single trigger but the speed of the market collapse: rapid shift in sentiment, soaring panic indicators, massive spot selling triggering cascading liquidations, leading to a chain reaction of decline.

Ray Hindi, Co-Founder and Managing Partner of L1D AG, said: "Many Traditional Finance (TradFi) related themes became noticeably overstretched and trading crowded in January. The subsequent intense deleveraging and pullback will transmit the shock to the crypto market, which is still dealing with the severe and unresolved structural issues left over from the October 10th liquidation event." He believes that this decline also reflects a structural cleansing process in the market. This reshuffle helps clear the 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, said that the recent volatility is part of a trend accumulated over the past few months. He noted that since December 2024, the non-Bitcoin token market has actually been in a bear market, describing this year's trend so far as a "rolling bear market" continuing in most altcoin markets. Due to the spread of pressure on risk assets, selling pressure accelerated, forcing those who had previously turned to precious metals to sell crypto assets to meet margin requirements.

Expectations for altcoins outperforming the market remain subdued, with most fund managers stating that the market is shifting towards quality, fundamentally driven investments. Joscha Kuplewatzky from Wintermute Ventures stated that the market may now be in the late stage of the cycle, not suitable for an overall bet on altcoins outperforming. He believes that unless retail traders become active again, any uptrend is more likely to be short-term and specific to certain sectors. In addition, many investors have said that cryptocurrency is no longer the preferred choice for new capital.