The token launch frenzy is stifling the Altcoin season - 45 new launches dilute liquidity.

The emergence of the altcoin season is often linked to the performance of Bitcoin. When money flows out of BTC and into altcoins, this will trigger a bullish increase in altcoin prices.

However, the current cycle is delayed by factors other than Bitcoin. One of those factors is the increase in token creation events (TGE).

The Rise of TGE – Benefit or Disaster?

In the past 4 months, 45 new tokens have been launched, most of which have not generated profit. Many tokens launched in 2025 have failed to maintain growth momentum after listing, raising the question of whether this trend is due to pessimistic macroeconomic conditions or a lack of fundamental value from the tokens themselves. This is turning altcoin into a speculative asset driven by momentum.

Vincent Liu, CIO of Kronos Research, has clarified this question.

"The continuous token launches, especially memecoins, have caused liquidity to become thinner and investor attention to be fragmented. At the same time, adverse macro factors such as rising interest rates and a global shift towards risk-averse sentiment have stifled speculative capital. Tokens lacking utility, clear roadmaps, or sustainable ecosystems have seen their prices plummet quickly, leading to increasing skepticism among investors."

One of the few successful launches with a profit of (ROI) is Solayer (LAYER). Since its launch in February, the LAYER token has increased by 88% and is currently trading at under $2.

SOLAYER price analysis | Source: TradingView## The Altcoin season is delayed, but many niche sectors continue to grow

The altcoin season index is currently at 16, indicating Bitcoin's dominance. The launch and subsequent failure of numerous tokens after listing are contributing to the slowdown.

However, Liu noted that niche categories such as tokens linked to the artificial intelligence (AI) sector continue to show strong demand despite broader market conditions.

"Although the altcoin season has not officially arrived yet, niche categories such as AI-integrated cryptocurrencies and emerging technology sectors have shown signs of strong bullish momentum. Many token launches are still affected by sudden spikes in valuation but weak fundamentals, diluting capital and hindering overall growth. However, AI-related projects continue to attract attention not only from those in the crypto space but also from the traditional finance sector. The altcoin season is not over; it is simply evolving," Liu commented.

Despite the delay, the potential for an altcoin season still exists. However, 75% of the top 50 altcoins will need to outperform Bitcoin to signal a real change.

Altcoin season index | Source: Blockchain Center## Are market makers inflating TGE?

Arthur Cheong, the founder and CEO of DeFiance Capital, recently raised concerns about TGE. He emphasized the risks when projects and market makers collaborate to inflate token prices. This can distort market behavior and undermine investor confidence.

"It's unclear whether the strong price increase is the result of the usual supply and demand law or simply due to projects and market makers colluding to set prices for assets. It's strange that CEX turns a blind eye to this and the altcoin market increasingly resembles a Lemon market, where confidence continues to erode."

In response to this, Vincent Liu stated that improvements need to be made in the approach to token launches.

“… the issue of token prices being artificially inflated before launch is a major concern. While these short-term bullish trends may attract initial attention, they often undermine the trust of long-term investors. To mitigate this, the industry must advocate for transparency around partnership agreements, add listing criteria, and provide information disclosure prior to launch. Clearly communicating the structure, roadmap, and market cap projections of a project is essential for building a sustainable and trustworthy ecosystem.”

Liu believes that solving this issue requires cooperation from market makers, centralized exchanges (CEX) and investors.

Liu concluded: "By conducting thorough research on the fundamental factors of the new project, investors can protect themselves from significant losses and identify valuable tokens in the long term."

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Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.

Viet Cuong