Is Altcoin Season Coming? Key Sectors to Watch

The first half of 2024 ended with corrections and consolidation in the crypto market. BTC's market share fluctuated between 50% and 54%, while altcoins underperformed. Altcoins invested in by VCs and facing significant unlocks were particularly resisted by the market.

As the market continued to correct and consolidate, many altcoins lost almost all their gains from the past six months. Historically, during bull markets, altcoins surged after BTC's rise and consolidation. The lack of an altcoin surge this time suggests that the bull market may not have truly begun.

Despite the market's consolidation due to Mt.Gox repayments and selling pressure from the German government, the potential approval of an ETH ETF and a Federal Reserve rate cut remain promising. These factors are seen as significant drivers for market movement.

If an altcoin season emerges, which sectors should be watched？ Here are some insights based on market trends and future prospects, representing the views of WikiBit analysts without investment advice.

Ethereum Sector

The most noteworthy aspect of Ethereum this year isn't its technical development but the potential approval of a spot ETF. Approval of a spot ETF would mean more traditional funds could legally and compliantly purchase ETH, driving its price up.

To understand the outlook for ETH after ETF approval, industry experts' views on ETH's trend can be referenced in previous articles:Industry Experts' Perspectives on the Market Outlook Following the Approval of the ETH ETF

Recently, six U.S. Ethereum spot ETF applicants, including Fidelity, VanEck, Franklin Templeton, 21Shares, Grayscale, and BlackRock, have submitted revised S-1 documents. VanEck plans to waive its Ethereum spot ETF fees initially, while Franklin Templeton sets its fee at 0.19%. Some issuers, like BlackRock, have not yet set fees.

An increase in ETH prices will also boost the prices of its ecosystem projects. Ethereum's ecosystem is robust, and as ETH prices rise, many DeFi projects based on ETH will release more liquidity, promoting the rise of project tokens within the Ethereum ecosystem, such as Lido and Rocket Pool. Additionally, ENS, which Vitalik Buterin called “the most successful non-financial application,” is worth noting.

However, it is important to note that on-chain data shows that Grayscale's holding of 2.926 million ETH could create selling pressure when the ETF is approved.

TON Ecosystem

TON (The Open Network) is the only public chain officially supported by the social giant Telegram, leveraging Telegram's vast user base of 900 million monthly active users. It has built a unique narrative across payments, social media, and mini-programs.

In this unique context, TON has also gained support from the top industry capital Pantera Capital. In June, an email from Pantera Capital to potential investors revealed that the fund is called “Pantera TON Investment Opportunity,” aiming to raise funds to purchase more TON tokens.

In the past three months, on-chain addresses for TON have increased from less than 6.5 million to 39 million.

Currently, the TON ecosystem is still in its early stages of construction, but high-traffic projects like Notcoin and Catizen have already emerged, demonstrating the massive user base backed by Telegram.

With support from capital and Telegram, the potential for TON and its ecosystem is enormous.

AI Sector

AI is an emerging sector that has skyrocketed with the launch of ChatGPT. With the aim of “improving productivity,” the influence of AI is beginning to resemble an “industrial revolution,” garnering high expectations from both capital and individuals.

The rapid development of AI increases the demand for computing power. In certain common scenarios, such as hardware equipment and resource allocation, the blockchain industry is aligning with the AI industry through token economies and computing power.

AI itself is expected to significantly “improve productivity,” and when it meets the blockchain sector with excess computing power and a lack of narrative, the two combine in a unique way. In the blockchain AI sector, projects like io.net and Render are worth watching. Both aim to provide massive computing power for machine learning applications.

Additionally, the Artificial Superintelligence Alliance (ASI), a recent merger of three tokens, is a noteworthy AI project in the blockchain industry. ASI is formed by merging Ocean Protocol (OCEAN), SingularityNET (AGIX), and Fetch.ai (FET), three Crypto x AI projects that have been deeply involved in their respective fields for years. Fetch.ai specializes in AI agents; Ocean Protocol has built numerous modular services for decentralized data sharing, access control, and payments; and SingularityNET has explored AGI the most among the three projects pre-merger.

The merger will create a team called the Superintelligence Collective, with SingularityNET founder Ben Goertzel serving as CEO. The three projects will continue to operate as independent entities but will closely collaborate within the shared ASI token ecosystem and the Superintelligence Collective's operations.