Dear Crypto Family,
This week, we gathered as a team to discuss current crypto market dynamics, macro-level catalysts, and what we believe may be shaping the remainder of this cycle. Here's a distilled update from our internal strategy session.
📉 State of the Market
Altcoins remain under pressure, with most trading nearly 90% below previous all-time highs. While that sounds grim, we see it as a potential setup phase. We continue to anticipate an altcoin season—though perhaps not one resembling the free-for-all of previous cycles. Instead, we're positioning around a more selective, fundamentals-driven rotation.
Right now, capital inflow remains constrained. The total crypto market cap sits around $3.3 trillion, with minimal net new liquidity. There's significantly more supply—thousands more tokens—than in previous cycles, diluting the capital spread. For meaningful upside across altcoins, we believe broader liquidity shifts must occur.
Our macro thesis hasn’t changed: the bull cycle likely extends into 2026. This correction phase may be laying the foundation for the next wave of movement.
📊 Bitcoin at the Center
We're seeing a pattern consistent with prior cycles: Bitcoin leading, altcoins lagging. The next major shift likely hinges on Bitcoin consolidating above its previous all-time high (~$110K). If it holds that level for several weeks, we anticipate capital rotation into altcoins. Until then, we remain cautious.
It’s worth noting that this cycle feels different. The abundance of new tokens has fragmented attention and capital. We no longer expect a uniform altcoin rally. Instead, our strategy is focused on high-quality projects with traction—those showing either on-chain revenues, sustained usage, or real-world application.
🔍 The Geopolitical Wildcard
An increasingly important theme is the interplay between global geopolitics and crypto adoption. Recent conflicts in the Middle East, including escalating tensions involving Iran and Israel, are being interpreted by some analysts through the lens of game theory. Several players—nation-states and global institutions—may be acting based on strategic incentives that could escalate into a longer conflict.
The economic implications of such a conflict would be significant. A prolonged disruption in supply chains, especially oil, could lead to global recessionary pressures. In such a scenario, we foresee a potential flight to hard assets—Bitcoin in particular—as a hedge against traditional fiat systems.
We aren’t alone in this thinking. There’s growing consensus that Bitcoin’s appeal as a non-sovereign store of value may increase in a world where the financial order is being challenged. The alignment between the projected timing of a possible recession (early 2026) and our existing thesis for a crypto market PEAQ is striking.
This isn't about fear-mongering—it’s about acknowledging the increasing role macro geopolitics might play in capital flows into crypto.
🔄 Sector Watch: DePIN, Real-World Assets, and Perpetuals
Despite the market’s broader flatness, certain sectors are showing signs of resilience.
DePIN (Decentralized Physical Infrastructure Networks): Projects like PEAQ and others in the DePIN space remain undervalued from a price standpoint but continue building. With major listings and ongoing partnerships, we’re monitoring closely. PEAQ, for instance, recently announced an upcoming listing on Kraken, and their team continues to build out relationships in traditional infrastructure circles.
Stablecoins & Real-World Assets: We're observing stablecoin adoption accelerating globally. Several banks and payment providers are either launching or piloting their own stablecoin initiatives. On-chain projects like Syrup (institutional lending) and Morpho are showing organic TVL growth, and while their tokens haven’t fully reflected that yet, the fundamentals are trending positively.
Perpetuals and Appchains: Competitors to Hyperliquid are emerging. Lighter and Aster, both decentralized perpetual trading platforms, are gaining momentum. Backed by top-tier funds and running zero-fee or airdrop-reward models, they’re seeing rising adoption. These may present early entry opportunities.
🧠What We’re Thinking
From a portfolio allocation standpoint, our conviction is growing that Bitcoin may outperform in the event of a systemic reset. Altcoins remain critical to our strategy—but increasingly as a way to accumulate more BTC. If a major macro shock unfolds, we believe Bitcoin could rally beyond conservative targets, perhaps even exceeding the $500K level depending on scale and duration of disruption.
Most altcoins, in that scenario, may not make it through the "musical chairs" moment. That makes risk management key.
👀 On Our Radar
Dabba Network: A decentralized ISP project backed by Y Combinator and Multicoin. Still early but operational and revenue-positive.
LetsBONK.fun (Meme launchpad from BONK community): Despite the tongue-in-cheek branding, USELESS meme coin on Letsbonk.fun has shown surprising strength. We’re tracking potential tier-one exchange listings.
Spark (Sky Ecosystem): The DeFi platform expanding SKY ecosystem is gaining traction, now managing over $6.6B in TVL. Its SPK token may offer exposure to the growing yield generation infrastructure behind stablecoins like USDs.
Closing Thoughts
We're preparing for multiple scenarios—ranging from tepid markets to geopolitical shocks. The playbook isn’t fixed. We're watching on-chain metrics, macro signals, and emerging narratives to navigate what could be one of the most complex but opportunity-rich cycles yet.
We'll be back next week with more updates.
Stay sharp,
The Token Metrics Team