Bitcoin soars, altcoins plummet by $300 billion in crypto crash

As of today, 2025 looks to be a good year for cryptocurrencies. Bitcoin is breaking records, and United States President Donald Trump is preparing legislation for its development, which will stimulate the industry's growth and is expected to be adopted by Congress. At the same time, altcoins are experiencing a serious decline, writes UNN with reference to Bloomberg.

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However, if you look beyond the optimistic headlines about Bitcoin, you can see a completely different picture. Most so-called altcoins, once touted as competitors to this crypto asset, are experiencing a rapid decline, with their market value having fallen by more than $300 billion this year.

A sea of red indicates a broader problem that forces part of the industry to face existential questions. Early enthusiasts envisioned cryptocurrency as a universe where a multitude of coins compete for investors' money, offering a variety of use cases. But with Bitcoin's dominance, this idea is giving way to predictions that much of the sector will turn into a digital void.

“I think they’re just going to die, honestly. They’ll just wither away. Technically, a lot of these things are just going to sit there and collect dust forever,”

Bitcoin's share of the total market value of crypto assets has increased by nine percentage points this year to 64%, the highest since January 2021, according to CoinMarketCap data. At that time, cryptocurrencies were largely unregulated, crypto lending was booming with minimal guarantees, and non-fungible tokens were just beginning to gain momentum.

In contrast, altcoins — a general term for all digital assets except Bitcoin and stablecoins — are experiencing instability. The MarketVector Index, which tracks the lower half of the 100 largest digital assets, which more than doubled after Donald Trump's victory in the November 5 election, has since lost all those gains and is down approximately 50% in 2025.

Bitcoin fades on the rise, after reaching record highs of over $110,00029.05.25, 21:01 • 3889 views

As Bitcoin absorbs the bulk of capital flows from investors in exchange-traded funds, other parts of the market are increasingly left behind. Even Ethereum, the second-largest cryptocurrency, remains approximately 50% below its all-time high after a modest recovery driven by inflows into spot ETFs investing in the token.

“Historically, Bitcoin would rally and then that would trickle down to altcoins. We haven’t seen that in this cycle yet,”

Cryptocurrency is no stranger to mass extinctions. The 2022 market crash, marked by the collapse of the algorithmic stablecoin TerraUSD and Sam Bankman-Fried's FTX exchange, led to the demise of hundreds of projects. Thousands of coins still exist on their blockchains, with little or no activity — in crypto terminology, they have passed into the status of "ghost chains."

This time, cryptocurrency is becoming a more regulated, institutionally driven market, and stablecoins seem to be the only tokens that have a real chance of achieving legal tender status, due to their volatility elimination.

In the past year alone, the market value of stablecoins has grown by $47 billion, and some of the world's largest banks are entering this area. The Wall Street Journal reported this month that Amazon.com Inc. is exploring a potential stablecoin. This puts pressure on altcoin projects to find ways to strengthen their status and attract a broader investor base.

“I’ve talked to a bunch of projects that have looked at co-mingling funds, putting it under governance, saying: ‘Now we can be governed by a different authority’ — that authority being a different altcoin community,”

However, according to Makubela, the question ultimately boils down to utility. He compares Bitcoin to gold and Ethereum to copper — the former has a limited final supply, and the latter's blockchain underlies much of cryptocurrency's functionality.

The expert believes that most altcoins are stuck in a kind of twilight zone, backed by big promises and nothing else.

“I think a lot of them will go to zero because they were driven by speculation without that mimetic value like Bitcoin, and they tried to be utilitarian without achieving any real scale,”

Addition

The US Senate has passed a bill on the regulation of stablecoins, digital assets linked to fiat currencies. It aims to establish reserve rules, protect consumer rights, and ensure oversight.