Crypto Assets market may welcome a new round of "alt season"

The current Crypto Assets market is in a low mood and directionless, but we may be in the last calm period before the next round of "alt season" explosion. Unlike before, the future market will be driven by core narratives such as ETFs, actual returns, and institutional adoption, rather than a comprehensive surge.

We may be at a critical turning point in the market cycle. At this stage, the vast majority of participants choose to wait and see due to exhaustion or hesitation, while only a very small number have quietly completed trading arrangements that could impact their lives.

Alt season signal emerges

Recently, Bitcoin reached its highest monthly closing price in history, but its market dominance has started to decline. At the same time, large holders have accumulated a significant amount of ETH in a short period, causing Bitcoin's balance on exchanges to drop to a multi-year low.

Retail investors remain cautious and skeptical. Sentiment indicators are at a low level, which is the ideal market condition for early entrants.

Everything is brewing at this moment.

The current altcoin speculation index remains low, and the ETH/BTC ratio has finally seen its first weekly increase in weeks. The approval of the Solana ETF has become a foregone conclusion. On-chain capital flows have quietly begun, gradually moving towards DeFi, real-world assets ( RWA ), and re-staking, which align with the market narrative.

But this is not 2021, and there will be no more "nationwide carnival" market.

The upcoming market will be more selective and deeply narrative-driven. Funds are flowing into real yield, cross-chain infrastructure, and ETF-related assets with staking yield mechanisms.

If you have been quietly accumulating, now is your signal.

The DeFi sector is undergoing profound changes

DeFi is moving towards a "more institutionalized and more invisible" phase. On one hand, financial primitives designed specifically for institutions are thriving; on the other hand, emerging composability layers are simplifying operational complexity for ordinary users.

But in the end, only those protocols that go beyond "points games" and integrate real economic value or application scenarios can continuously attract capital inflow. The real winners will be those protocols that can perfectly combine seamless cross-chain experiences, secure infrastructure, and predictable investment returns.

Six major trends are occurring in the DeFi space:

1. Stablecoin Yield Optimization and Fixed Income DeFi

DeFi is increasingly mimicking traditional finance by converting stablecoins into high-yield, quasi-fixed income assets to attract funds. Against the backdrop of heightened volatility in the spot market, various protocols are shifting their focus towards capital efficiency and fixed rate structures to meet the dual demands of institutions and retail investors.

It is worth noting that the high returns advertised often require leverage, re-staking, or circular strategies. After deducting various costs, the actual net return may be closer to 6-9%. In addition, while the composability that supports these circular structures provides convenience, it also increases the systemic risks of chain liquidations and stablecoin de-pegging.

2. Integration of Cross-Chain Liquidity and User Experience

The way users interact with multi-chain liquidity is undergoing a fundamental change. The cross-chain user experience is evolving from cumbersome bridging processes to a seamless, intent-based deposit system, effectively abstracting the boundaries between chains.

The trend is clear: value capture is gradually shifting from the public chains themselves to those composable infrastructures and messaging layers.

3. Re-staking and On-chain Security Market

Re-staking is continuing to evolve into an independent on-chain security market, essentially injecting re-staked ETH into structured products to build a yield mechanism similar to corporate bonds or government bonds.

We are witnessing a new form of "re-staking yield curve": the prices of short-term and long-term bonds will be priced differently based on risk perception, exit liquidity, and Slash risk, resulting in discounts or premiums.

However, composability also brings vulnerabilities. For example, the zero-coupon bond structure means that the principal must be locked until maturity; any forfeiture event or validator downtime could severely damage the principal, even without a smart contract vulnerability.

4. Monetization and Programmability of Data Infrastructure

Block space is no longer a bottleneck; data latency and composability are. Some projects aim to provide monetizable real-time read/write infrastructure for Web3 developers.

This trend is giving rise to a new middleware business model: providing developers with low-latency, chain-agnostic data access services, and charging on demand. In the future, it may introduce a pricing model similar to cloud services along with a developer tier system based on latency.

5. Institutional Credit Infrastructure and RWA Integration

On-chain lending is becoming institutionalized, with automatic renewal credit limits, standby floating rates, and leveraged RWA strategies becoming the focus.

We are gradually approaching on-chain bulk brokerage business, and compliant, structured fixed-income products will lead a new round of growth. However, RWA strategies require high-fidelity oracles and robust redemption logic. Any off-chain mismatch may trigger large-scale decoupling or additional margin risks.

6. Airdrop Economy and Incentive Mining

Airdrops remain the main user acquisition strategy, although user retention data continues to decline. Data shows that two weeks after the airdrop, only about 15% of the total value will be retained.

Projects that want long-term liquidity must turn to retention-oriented incentive mechanisms, such as veNFT locking, time-weighted reward mechanisms, or re-staking access rights, rather than relying solely on speculative points to attract new users.

Macroeconomic Narrative and Investment Framework

Despite the ongoing geopolitical turmoil potentially hitting the market hard, structural buyers are continuously absorbing every dip. Altcoins will not see a "bull market" like in 2021; instead, narratives that have tangible catalysts like ETFs, real income, and distribution channels will draw attention away from pure speculation.

( 1. Macroeconomic Background: Volatility Associated with Headline News

Recent geopolitical events have once again proven that the market in 2025 is driven by headline news. Each instance of macro turbulence accelerates the process of chips moving from uncertain holders to long-term accounts.

) 2. The silence of summer, or the buildup before the leap?

Although seasonal statistics suggest that the market may be relatively flat in the third quarter, the stable buying of ETFs and the leading role of the U.S. stock market may break this trend.

3. The only altcoin narrative worth paying attention to currently: Solana ETF

In a market lacking the narrative of the "next big event", Solana's spot ETF has become the only topic with institutional-level significance. If the future Solana ETF structure includes staking rewards, its role will shift from "high Beta trading target" to "quasi-income digital equity".

4. The fundamentals supporting DeFi

Despite hot topics dominating social platforms, on-chain protocols with real cash flow are quietly strengthening.

5. Meme coin

Some trading platforms have launched Meme coin perpetual contracts that exhibit a "pump and dump" trading model. Most of these trades are extractive and non-value creating. It is advisable to either accept it as a "Ponzi scheme" and set clear stop-loss and take-profit points, or simply ignore it altogether.

6. New Issuance Projects and Structural Benefits

Some trading platforms are promoting their own Layer 2 solutions, which may drive user activity in Ethereum Layer 2. The token prices of certain new projects indicate that even with significant sell-offs in the early stages, as long as the team has a credible plan and a verifiable roadmap, their tokens can still attract positive market buying in secondary trading.

7. Investment Framework for Q3 2025

• Core Position: Continuously allocate a large amount of BTC until the outflow of ETFs significantly exceeds the inflow.
• Rotating Beta: Continuously build positions in SOL below a specific price level, using it as an alternative to ETFs, and pairing it with related tokens to enhance potential returns.
• Basic DeFi portfolio: evenly weighted allocation of several specific tokens; when one of the projects performs outstandingly, rotate the profits into the underperforming projects.
• Speculative positions: Limit the risk exposure of Meme coins to within 5% of the total net asset value; treat each perpetual contract of Meme coins as a weekly option trade, using a small cost to seek high returns, and set strict stop-loss orders.
• Event-driven: Track milestone events of certain platform Layer 2s; strategically position catalysts related to user growth in relevant ecosystem tokens.

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