Cryptocurrency markets have always moved in cycles, often defined by extreme peaks and deep corrections. Since Bitcoin’s inception in 2009, we’ve seen multiple market cycles, each with unique factors influencing price action. While some elements remain constant—such as the four-year Bitcoin halving cycle—each cycle also introduces new dynamics that reshape how the market behaves.

As we enter a new market cycle in 2024-2025, there’s a growing sentiment that this time is different. Several factors are making this cycle stand apart from previous ones, from institutional adoption to changes in retail participation. Here’s a breakdown of why this cycle is unfolding differently and what that means for investors and builders in the space.

A Quick Recap: Traditional Crypto Market Cycles

Crypto cycles historically follow a pattern:

Correction/Bear Market – Reality sets in, profit-taking accelerates, and liquidity drains from speculative assets.

Euphoria/Peak – Markets overheat, speculative frenzy takes over, and altcoins see extreme gains.

Expansion/Bull Market – Optimism returns, prices rise, and media coverage draws in new retail investors.

Accumulation – After a bear market, smart money and long-term holders accumulate assets at low prices.

This pattern has repeated across previous cycles, from the 2013 boom and bust, to the 2017 ICO mania, and then the 2021 bull run driven by DeFi, NFTs, and institutional interest.

However, 2024’s cycle has taken a different shape, with distinct forces reshaping market conditions.

1. Institutional Adoption Driving Bitcoin’s Strength

One of the biggest differences in this cycle is the role of institutional capital. Unlike past bull runs that were primarily fueled by retail speculation, this cycle has seen massive institutional adoption:

Derivatives Growth: The expansion of Bitcoin futures and options trading has led to a more structured and liquid market, reducing volatility compared to previous cycles.

Corporate and Sovereign Interest: Large corporations and even nation-states are either integrating Bitcoin into their balance sheets or using it as a hedge.

Bitcoin ETFs: The approval of spot Bitcoin ETFs in the U.S. has opened the floodgates for institutional investors, allowing trillions of dollars of capital to access BTC in a regulated manner.

As a result, Bitcoin has been the standout performer or “king of cryptocurrencies”, reaching new highs and dominating market liquidity, leaving less room for speculative altcoins to surge in the same way they did in past cycles.

2. Market Dilution: More Altcoins, Less Upside

In previous cycles, new altcoins launched in relatively low supply, creating opportunities for explosive gains. However, this time, the sheer number of crypto projects has drastically increased.

By the end of January 2025, over 36.4 million tokens were in circulation, a massive increase from just 3,000 in 2017–2018, according to Dune Analytics. This could be due to:

Token Unlocks: Many projects continue to release vested tokens, contributing to ongoing sell pressure. As a result, most have experienced significant drawdowns in prices.

Overcrowded Meme Coin Market: Unlike past cycles where a handful of meme coins captured most of the attention (Dogecoin, Shiba Inu), 2024 has seen an oversaturation of new meme coins launching daily, making it harder for any single one to sustain momentum.

Layer 1 and Layer 2 Proliferation: The rise of hundreds of Layer 1 and Layer 2 scaling solutions has fragmented liquidity across different ecosystems.

This dilution means that while some altcoins will still perform well, the broad-based rallies seen in past cycles—where nearly every coin pumped—are less likely.

3. Retail Liquidity is Being Drained Elsewhere

Retail traders have always played a key role in fueling crypto bull markets, but this cycle has a major difference: retail liquidity is being absorbed by new mechanisms outside traditional spot trading.

The rise of Pump.fun

Caption: pump.fun was first launched on January 19, 2024 and has since completely altered the behavior of crypto retail investors worldwide 

One of the biggest shifts in this cycle has been the rise of platforms like Pump.fun, which has created an entirely new form of speculative trading. 

Pump.fun allows anyone to create Solana tokens in a minute for completely free, spawning some of the biggest memes of 2024 and leading to high-risk, high-reward gambling-like behavior that attracts retail money away from major altcoins and into highly speculative microcaps.

This dynamic has had a few notable effects:

More exit liquidity for insiders: Insiders launching new tokens benefit from quick retail inflows, but the constant churn leaves many retail traders wrecked before they can rotate profits into major alts.

Faster rotations: Retail money is cycling through new tokens within hours or days, making it harder for sustained uptrends in more established altcoins.

Caption: In January 2025, Pump Fun has generated $116.72 million in revenue, which exceeded the revenue of Solana ($116.46 million) and Ethereum ($107.64 million)

COMMUNITY NOTE:

Several fake SQT tokens have recently appeared on Pump.fun, attempting to mislead traders. These tokens are not affiliated with the official SubQuery Network, and buying them carries significant risk. 

Always verify token contract addresses through official sources (our Discord and Telegram channels) before making any transactions. Stay cautious and avoid falling for scams designed to exploit unsuspecting users.

What Does This Mean for Crypto Investors?

While this cycle is still evolving, a few key takeaways are clear:

Retail speculation is being siphoned into new arenas, from Pump.fun to novel on-chain trading mechanisms. Understanding these shifts can help traders navigate where liquidity is moving.

Altcoin rallies will be more selective. Unlike previous cycles where almost every token pumped, this time, projects with real use cases, strong tokenomics, and genuine demand will be the primary winners.

Bitcoin remains the dominant force due to institutional adoption, meaning many investors are focusing on BTC rather than speculative altcoins.

Conclusion

While crypto still follows familiar market cycles, 2024’s cycle is different from those before it. The rise of institutional adoption, market dilution, retail liquidity shifts, and a changing macro environment have all created a new landscape.

For investors and builders, adapting to these shifts is key to navigating this cycle successfully. The game has changed—but opportunities still exist for those who understand where the money is flowing next.

About SubQuery

SubQuery Network is innovating in web3 infrastructure with tools that empower builders to decentralise without compromise. SubQuery’s infrastructure network offers everything from data indexers, RPCs and AI agents - all fully decentralised and production ready.

Our fast, flexible, and open data indexer supercharges thousands of dApps on nearly 300 networks. Our Sharded Data Node will provide breakthroughs in the RPC industry and our AI App framework makes building AI apps easier than ever before. We pioneer the web3 revolution for visionaries and forward-thinkers. We’re not just a company — we’re a movement driving an inclusive and decentralised web3 era, together.

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