Opinion by: Kamal Mokeddem, General Partner at Finality Capital
The prevailing institutional narrative surrounding altcoins is as follows: If you want crypto exposure, simply buy Bitcoin and move on.
Bitcoin now has ETFs and has outperformed nearly every other digital asset. Unlike 2017 or 2021, there has been no broad altcoin rally this cycle. At its peak in 2021, more than 2.6 million tokens were live; today, there are more than 42 million. No wonder many people believe the game is over.
This perspective is lazy and wrong. The absence of an “altcoin season” doesn’t mean there is a lack of opportunity. It means the market is maturing.
The free-for-all token rallies of 2017 and 2021 are behind us — oversupply, poor tokenomics and retail fatigue made sure of that. Confusing the end of indiscriminate speculation with the demise of altcoins is to miss the real story. These tokens are no longer trying to compete as a currency. Instead, they’re evolving into one of the most powerful growth marketing tools we’ve ever seen.
Bitcoin isn’t the benchmark
Bitcoin will not win as the preferred monetary asset. All tokens have some non-zero monetary premium. The one most likely to gain the most significant monetary premium is the one that’s used the most as a means of payment, which is expected to be the native token that hosts the most popular Web3 applications. It’s still too early to say whether this will be Ether, SOL, or something else, but it almost certainly will not be Bitcoin.
Altcoins are shifting from speculative chips to fundamental business primitives. They’re not about replacing Bitcoin. They’re about accelerating adoption, pulling users out of Web2 silos and bootstrapping new networks faster and cheaper than any company in history.
The consequences of such an adoption will change the internet as we know it. The value of Web2 companies depends on their ability to hoard and monetize data. Once that data becomes portable, verifiable and user-controlled, the moat that sustained these monopolies starts to erode.
Over the next five years, we should expect the first year-over-year revenue declines at the Web2 giants. Google and Facebook, whose margins depend on data lock-in, are the most at risk. Apple, meanwhile, benefits regardless — whether apps are Web2 or Web3, they still run on iPhones. Amazon’s logistics moat will remain, but even there, tokenized networks could erode its dominance.
Related: Altcoin season signals hide in ‘many weeks’ of bearish BTC dominance: Analyst
Altcoins aren’t dead. They’ve simply found their purpose as growth engines disguised as assets.
ZkTLS and verifiable data
The biggest unlock for altcoins is technical. Zero-knowledge transport layer security (zkTLS) — a mechanism for cryptographically verifying any data exchanged over HTTPS — now makes it possible to take siloed Web2 data and turn it into verifiable inputs on Web3.
That opens the floodgates for new applications. In fintech, a worker can prove their paystub onchain and immediately access a USDC loan on a debit card — no payday lender required. In advertising, influencers can tie posts to verified conversions and get paid without opaque intermediaries. Identity-driven services like ride-share drivers can port their history across platforms and earn token incentives to switch providers.
The implications go further. Remittances could bypass money transfer monopolies. Tokenized credit scores could expand financial access in emerging markets. In healthcare, patients could prove their medical records without exposing private data.
In e-commerce, verified purchase histories could unlock loyalty rewards across multiple platforms. In the infrastructure sector, projects are already utilizing tokens to construct decentralized 5G networks. Even in AI, networks are showing how tokens can coordinate global compute and data.
In every case, tokens aren’t just abstract assets, but incentives — the fuel that moves users from legacy incumbents to new challengers. In Web2, companies like Uber or DoorDash spent billions on subsidies to lure drivers and customers. Tokens enable startups to achieve the same effect with far less capital, thereby compressing the time it takes to bootstrap a two-sided marketplace.
There are already examples of this in crypto-native markets. A new exchange can “vampire attack” incumbents by rewarding traders who can prove their volumes elsewhere. Wherever data can be verified, tokens can be deployed to redirect attention and liquidity.
Now matters because of maturity
All of this is possible because the crypto tech stack has matured. In the early days, only hyper-technical founders could ship products. Now, the building blocks — databases, storage, identity layers — exist, opening the door for business-first founders to build billion-dollar companies in Web3.
That’s precisely how the internet evolved. In the 1990s, technical founders were replaced by business operators once the stack stabilized. The result wasn’t fewer companies — it was Amazon, Google and Facebook. We’re approaching the same inflection point in the crypto space.
The timing matters. The trillion-dollar advertising market is ripe for disruption. Similarly, the fintech, social media and cloud infrastructure industries are also experiencing growth. Web2 monopolies depend on hoarding user data. Web3 unlocks it. Tokens serve as the incentive layer that enables switching.
For institutions, the biggest mistake is assuming Bitcoin ETFs equal crypto exposure. Bitcoin may remain the reserve asset, but the real venture-style upside is happening in tokens that power applications. To ignore them is like ignoring the internet in 2000 because Pets.com went bust.
The risk is asymmetric. Allocate now, while the space is unpopular and valuations are reasonable, or wait until incumbents are being disrupted and pay 10 times more for the same exposure.
Either way, adoption is coming. The only question is whether you’ll participate early or arrive late.
Opinion by: Kamal Mokeddem, General Partner at Finality Capital.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.