The encryption bull run is coming, how to filter potential alts?

Recently, the encryption market has shown a bull run atmosphere, and investors are starting to pay attention to which alts can bring excess returns. Unlike the 2021 bull run when almost all alts were soaring, there are now millions of new altcoins in the current market, and to achieve excess returns, careful selection of investment targets is essential. This article will share four key points for screening encryption projects.

1. Narrative Heat and User Mindset

Looking back at the best-performing tokens of the past 12 months, such as HYPE, VIRTUAL, and various meme coins, most of them do not possess strong fundamentals. However, they share a common trait: a high user mindshare on social media and a loyal fan base. Furthermore, their success is often tied to strong market narratives. For example, Virtual has continued to rise amidst the AI concept craze, while meme coins have surged due to the popularity of internet memes from the fourth quarter of 2024 to early in the first quarter of 2025.

Investors are advised to pay attention to current popular narratives and to look for token projects with active communities on social platforms.

2. Growth Indicators

In a bull run, market sentiment is often more important than fundamentals. However, the ideal investment target is a project that can attract high attention while achieving a strong match between product and market. This is especially worth noting when the main indicators of the project have recently shown explosive growth.

Taking the stablecoin protocol Ethena as an example, its TVL increased by 50% within 30 days, attracting the attention of many analysts. As a result, its token ENA rose by 154% in one month. Investors can achieve considerable returns by focusing on early-stage projects with continuously growing data indicators (such as TVL, revenue, transaction fees, etc.) and projects with a certain level of community enthusiasm.

3. Reasonable Token Economics

For medium to long-term investments, token economics is crucial. Taking the TIA token as an example, it plummeted by over 90% in 17 months, primarily due to early investors' massive sell-offs after the token unlock.

When studying token economics, attention should be paid to the following points:

Token Unlock Schedule

• The circulating supply should ideally reach over 30%.
• Annual token release volume (inflation rate) does not exceed 20%-35%
• Avoid projects that have large-scale token unlocks in the near future (such as those exceeding 20% of the current circulating supply).

token utility

Consider whether the token will benefit from the success of the protocol and why someone would be willing to buy at a higher price. Dividend mechanisms or token buyback schemes are ideal manifestations of utility. However, strong token utility, while an advantage, is not a necessary condition.

4. Community First

Currently, projects that prioritize the community are more popular than ever. Investors tend to support teams that value the community, which is one of the reasons why tokens like HYPE and PENGU have performed well recently.

The characteristics of community-first projects include:

• Conduct large-scale airdrops
• The team delivers on its promises.
• The team is active on social media platforms, continuously interacting with the community.
• A large proportion of the token supply is allocated to the community.

In addition to the above factors, significant positive news that is about to emerge (such as protocol upgrades, improvements in token economic models, or the launch of new products) may also drive up token prices.

Finally, even for high-quality assets, buying at an excessively high price may lead to investment failure. It is advisable for investors to patiently wait for the right entry point and avoid blindly chasing prices.