Opinion: Kamal Moghaddam, General Partner at Finality Capital
The prevailing institutional narrative surrounding altcoins is this: If you want exposure to cryptocurrencies, just buy Bitcoin and move on.
Bitcoin It now has ETFs It has outperformed almost every other digital asset. Unlike 2017 or 2021, There has been no widespread rally in altcoins this cycle. At its peak in 2021, there were more than 2.6 million live tokens; Today, there is More than 42 million. No wonder so many people think the game is over.
This perspective is lazy and wrong. The absence of “altcoin season” does not mean there is a lack of opportunities. This means that the market is maturing.
We have surpassed the free-for-all token rallies of 2017 and 2021 – underscored by oversupply, weak token economy, and retail fatigue. To confuse the end of random speculation with the demise of altcoins is to miss the real story. These tokens are no longer trying to compete as a currency. Instead, it’s evolving into one of the most powerful growth marketing tools we’ve ever seen.
Bitcoin is not the standard
Bitcoin will not win as the preferred monetary asset. All tokens have a non-zero cash premium. The currency most likely to receive the most significant premium is the one that is used 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 won’t be Bitcoin.
Altcoins are turning from speculative chips into essential trading primitives. They are not about exchanging Bitcoin. It’s about accelerating adoption, getting users out of Web2 silos, and getting new networks up and running faster and cheaper than any company in history.
The consequences of such adoption will change the Internet as we know it. The value of Web2 companies depends on their ability to store and monetize data. Once this data becomes portable, verifiable, and user-controlled, the moat that supported these monopolies begins to erode.
Over the next five years, we should expect the first year-over-year revenue decline in the Web2 giants. Google and Facebook, whose margins depend on data security, are most at risk. Meanwhile, Apple benefits regardless of whether the apps are Web2 or Web3, they still work on iPhones. Amazon’s logistical moat will remain, but even there, symbolic networks could erode its dominance.
Related to: Altcoin Season Signs Hiding in ‘Many Weeks’ of Bearish BTC Dominance: Analyst
Altcoins are not dead. They have simply found their purpose as growth engines disguised as assets.
ZkTLS and verifiable data
The biggest opening for altcoins is technical. Zero-Knowledge Transport Layer Security (zkTLS) – a mechanism for Cryptographic verification Any data exchanged over HTTPS – now allows to take isolated Web2 data and turn it into verifiable Web3 input.
This opens the door wide for new applications. In fintech, a worker can prove their payslip on-chain and instantly access a USDC loan on a debit card – without the need for a payday lender. In advertising, influencers can link posts to verified conversions and get paid without mysterious intermediaries. Identity-based services, such as ride-sharing drivers, can transfer their history across platforms and earn token incentives to switch providers.
The repercussions go further than that. Remittances can bypass money transfer monopolies. Token credit scores can expand financial access in emerging markets. In healthcare, patients can prove their medical records without revealing private data.
In e-commerce, verified purchase histories can unlock loyalty rewards across multiple platforms. In the infrastructure sector, projects are already using tokens to build decentralized 5G networks. Even in the field of artificial intelligence, networks show how tokens can coordinate global computing and data.
In each case, tokens are not just abstract assets, but incentives — the fuel that moves users from legacy companies to new competitors. In Web2, companies like Uber or DoorDash have spent billions on subsidies to attract drivers and customers. Tokens enable startups to achieve the same effect with much less capital, thus compressing the time it takes to launch a two-sided market.
Examples of this already exist in native cryptocurrency markets. The new exchange could “vampire attack” incumbents by rewarding traders who can prove their trading volumes elsewhere. Wherever data can be verified, tokens can be deployed to redirect attention and liquidity.
Now it matters because of maturity
All this is possible because the encryption technology stack has matured. In the early days, only high-tech founders could ship products. Now, the core elements—databases, storage, and identity layers—are in place, opening the door for early business founders to build multi-billion-dollar companies in Web3.
This is exactly how the Internet evolved. In the 1990s, technical founders were replaced by business operators once the stack stabilized. The result was not a decline in the number of companies, but rather Amazon, Google, and Facebook. We are approaching the same inflection point in the cryptocurrency space.
Timing is important. The trillion-dollar advertising market is ripe for disruption. Likewise, the fintech, social media and cloud infrastructure industries are also growing. Web2 monopolies rely on hoarding user data. Web3 opens it. Tokens act as the incentive layer that enables switching.
For institutions, the biggest mistake is to assume that Bitcoin ETFs equal exposure to cryptocurrencies. Bitcoin may remain the reserve asset, but the real upside for venture-style action is in the tokens that power applications. Ignoring them is like ignoring the Internet in 2000 because Pets.com went bankrupt.
The risk is asymmetric. Allocate now, while the space is unpopular and valuations are reasonable, or wait until incumbents are disrupted and pay 10 times more for the same exposure.
Either way, adoption is coming. The only question is whether you’ll be early or late.
Opinion: Kamal Moghaddam, General Partner at Finality Capital.
This article is for general information purposes and is not intended and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
