The altcoin market has once again fallen into a slump. How should investors respond?

Since the beginning of 2025, the cryptocurrency market has shown a significant downward trend. This weakness is reflected not only in the small tokens on trading platforms but even the on-chain assets that performed well in the fourth quarter of 2024 have experienced severe price corrections.

Observing the performance of AI-related tokens in 2025, the decline is astonishing:

• Virtual down 79.2%
• Ai16z fell by 85.5%
• AIXBT fell by 68%
• Griffain fell by 80.3%
• Buzz fell by 72.4%
• Fartcoin dropped 67.5%
• ARC dropped 62%
• Swarms dropped 45%

In just three months, these once-hot AI projects have experienced a decline of up to 80%. Although it cannot yet be determined that the AI sector has failed, it is clear that market attention to this field has significantly decreased, and it is unlikely to regain its former glory in the short term.

Meanwhile, the celebrity token craze sparked by a well-known political figure has quickly cooled off. Here are the declines of several representative celebrity coins since their peak:

• Certain political figure coin: -77.1%
• Certain politician's spouse coin: -91%
• Vine: -92.7%
• jailstool：-93.5%
• Jellyjelly：-98%
• CAR：-98.5%
• Libra: -94.3%

There is a saying in the cryptocurrency circle: "Invest in the new, not the old," which means that investors tend to chase the latest concepts and projects. However, compared to AI tokens, celebrity coins have seen a more severe decline. So, what problems do these two areas currently face? In the absence of emerging hotspots, is there still a breakthrough in the market?

Current Narrative Dilemma: Concept Hype Prevails, Substantive Applications Lack

Most AI-related projects are still in the conceptual stage, lacking mature products that can be applied on a large scale. Even when some projects launch actual services, they face issues such as complexity in operation and poor user experience, making it difficult to attract ordinary users for long-term use. Worse, some project teams exaggerate their promotions to meet market expectations, leading to frequent delays in actual implementation. As time passes, investors' patience wears thin, and funds begin to withdraw, triggering a sharp drop in token prices.

Regarding celebrity tokens, although they initially generated huge hype, they quickly encountered the dilemma of "celebrity effect decay." The various types of public figure tokens that emerged later, whether from politicians, internet celebrities, or stars, found it difficult to replicate the initial excitement. The market's enthusiasm gradually declined, leading to a fleeting characteristic of celebrity coins, resulting in a rapid loss of investor confidence.

The fundamental reason for the significant fluctuations in these sectors is that most projects only remain at the level of conceptual hype, lacking sustainable profit models. Whether it's AI or celebrity coins, their core appeal relies on the rapid influx of short-term funds and hype, yet they fail to provide users with the motivation for long-term participation. Once the hype fades, it becomes difficult to maintain prices, let alone attract new funds to enter the market.

Looking for projects with substantial returns

In the current market environment lacking a strong narrative, the key to standing out lies in discovering projects that can generate "substantial returns" and are willing to share them with users. The so-called "substantial returns" are not merely reliant on price bubbles at the time of listing, but rather through viable business models and trading activities that continuously generate returns and return them to token holders or ecosystem participants.

A certain decentralized exchange platform is a typical case. The business model of this platform is similar to that of centralized exchanges, with the main source of income being contract trading fees. The difference is that this platform uses all the fees to buy back its native coin, which closely ties the value of the coin to the platform's actual business performance.

According to statistics from a certain data platform, this trading platform accounts for about 45% of the total 24-hour trading volume in perpetual contract DEX, with an average daily trading volume of 3.78 billion USD and daily revenue of approximately 1 million USD. Even in the current market downturn, the platform still maintains a high level of activity, which is also the main reason why its native token continues to perform strongly in the recent environment where alts have generally declined.

No matter how popular a concept is, it will eventually lose its luster. What can stand the test of time in the crypto market are those projects that find a product-market fit, have high user stickiness, and deliver real returns.