The crypto market is warming up, how to filter potential alts?

Recently, the crypto market has shown a bullish atmosphere, which has led many investors to begin contemplating: which alts might bring excess returns?

Unlike the explosive growth of almost all alts during the bull market in 2021, the current market has undergone significant changes. There are now millions of new alts launched, and to achieve excess returns, careful selection of investment targets is essential.

This article will share several key points for filtering potential alts for your reference.

1. Focus on Popular Narratives and User Perception

Looking back at the best-performing tokens over the past 12 months, such as HYPE, VIRTUAL, and some well-known meme coins, we find that they do not all have strong fundamentals. However, they share a common characteristic: they have extremely high user recognition on social media and a group of loyal fans continuously promoting them.

In addition, most of the top-performing tokens are closely related to the popular narratives at the time. For example, Virtual continued to rise during the peak of the artificial intelligence concept, while Meme coins surged from the fourth quarter of 2024 to the early first quarter of 2025 due to internet trends.

It is recommended to pay attention to current popular narratives and look for related tokens that have active communities on social media platforms.

2. Focus on Growth Metrics

Although market sentiment is often more important than fundamentals during a bull market, some projects can simultaneously have high attention and good product-market fit. Such projects are usually great investment opportunities, especially when their key indicators show explosive growth.

For example, the stablecoin protocol Ethena has seen its total locked value (TVL) increase by 50% over the past 30 days, attracting attention from many users and analysts. As a result, Ethena's token ENA has risen by 154% in a month.

Investors can pay attention to projects that are in the early stages, have continuously growing data indicators (such as TVL, revenue, transaction fees, etc.), and possess a certain level of community enthusiasm. Data platforms like certain lock-up volume tracking websites can help identify the fastest-growing projects.

3. Reasonable Token Economics

For medium to long-term investments, token economics is crucial. Taking a certain token as an example, it has plummeted over 90% in the past 17 months, mainly due to large-scale sell-offs by early investors after each token unlock.

Before purchasing tokens, it is recommended to pay attention to the following aspects:

token unlock status

You can check the economics and unlocking status of popular tokens through relevant data platforms. Generally speaking, the circulating supply should ideally reach over 30%, and the annual token release (inflation rate) should not exceed 20%-35%. In addition, you should avoid purchasing tokens that have a large-scale unlocking in the recent period (such as exceeding 20% of the current circulating supply).

token utility

Investors need to consider: Will this token benefit from the success of the protocol? Why would someone be willing to buy it at a higher price? Dividend mechanisms or token buyback plans are usually better options.

Although strong token utility is a significant advantage, it is not absolutely necessary. There are also some tokens in the market with almost no utility that perform exceptionally well.

4. Emphasize Community-Oriented Projects

Currently, community-focused projects are more popular than ever. More and more investors tend to support teams that value the community, rather than vague and unappealing projects.

Community-first projects typically have the following characteristics:

• Conducted a large-scale airdrop
• The team is good at delivering on promises.
• The team is active on social media platforms and maintains interaction with the community.
• A larger proportion of the token supply is allocated to the community

Conclusion

In addition to the above factors, upcoming major positive news (such as protocol upgrades, improvements to the token economic model, or new product launches) may also drive up token prices.

However, even high-quality assets can lead to poor investment results if purchased at too high a price. Therefore, investors should patiently wait for the right timing and avoid blindly chasing prices.