**Navigating the Crypto Landscape: ETF Approvals and Revenue Models as Key Differentiators**
In the ever-evolving world of cryptocurrencies, the approval of exchange-traded funds (ETFs) and the establishment of verifiable revenue models are becoming crucial factors that will distinguish successful projects from those that may falter. Ki Young Ju, the CEO of CryptoQuant, recently shared his insights, suggesting that many alternative cryptocurrencies might struggle to endure the next market cycle. His analysis, posted on social media on February 25, highlights a growing divide between projects that can demonstrate tangible revenue and those that lack institutional or regulatory support.
Supporting Ju’s perspective, recent data reveals that 24% of the top 200 cryptocurrencies by market capitalization have plummeted to multiyear lows, as reported by various market-tracking platforms. The potential approval of ETFs by the U.S. Securities and Exchange Commission (SEC) for certain cryptocurrencies could significantly alter investor behavior. As of late February, seven digital assets—Cardano (ADA), Solana (SOL), XRP (XRP), Litecoin (LTC), Hedera (HBAR), Dogecoin (DOGE), and Polkadot (DOT)—are currently under regulatory review for ETF eligibility. Additionally, applications for Trump-themed (TRUMP) and Bonk (BONK) ETFs were submitted in January, indicating a growing interest in niche assets.
Market analysts are sounding the alarm that recent price rebounds may not be backed by solid fundamentals. Juan Pellicer, a researcher at IntoTheBlock, pointed out that leveraged positions in assets like Solana have contributed to a staggering $3.13 trillion decline in the total crypto market value, creating an environment ripe for rapid sell-offs. “The recent market correction, marked by significant liquidations—especially in assets like Solana—and a drop in total crypto market capitalization to $3.13 trillion, suggests we might be entering a capitulation phase as overleveraged positions are unwound,” Pellicer explained. He characterized this trend as “panic-driven liquidation,” a phenomenon often seen before market recoveries.
Moreover, Pellicer noted that the number of daily active addresses for most altcoins remains below the peaks observed in 2021, indicating that we may still be in the early stages of the cycle. Marcin Kazmierczak from RedStone echoed this sentiment, pointing out the disconnect between price movements and user engagement. The daily active addresses for many altcoins are still lagging behind 2021 highs, suggesting that speculative trading is currently dominating the market. Kazmierczak emphasized that long-term viability will depend on sustained adoption rather than short-term speculation. “The price recovery without a corresponding increase in daily active addresses suggests we are likely in the early speculative phase before mainstream adoption takes hold,” he noted.
Ju’s outlook hinges on two pivotal factors: the approval of ETFs and the generation of quantifiable revenue. He implied that projects failing to meet these standards may face obsolescence. This marks a shift from previous cycles, where broad rallies tended to uplift nearly all assets. The SEC’s decisions regarding ETF applications will likely play a significant role in shaping capital allocation. With regulatory clarity and measurable user growth, the crypto landscape may begin to differentiate between projects that are genuinely viable and those that rely solely on market hype.
