Altcoin Performance Suggests a Shift in Crypto Trading
Crypto and stock performance since January 2024 suggests that the new “altcoin trading” is just stock trading. The S&P 500 returned about 25% in 2024 and 17.5% in 2025, adding up to about 47% over two years. The Nasdaq-100 gained 25.9% and 18.1%, respectively, over the same period, for a cumulative gain of nearly 49%.
The CoinDesk 80 Index, which tracks the next 80 crypto assets after the top 20, fell 46.4% in the first quarter of 2025 alone and was down around 38% year to date through mid-July. The MarketVector Digital Assets 100 small-cap index fell to its lowest level since November 2020 by the end of 2025, wiping out over $1 trillion in total crypto market cap.
Choosing a Credible Altcoin Index
For the analysis, CryptoSlate tracked three altcoin indices. The first is the CoinDesk 80 Index, launched in January 2025, which tracks the next 80 assets after the CoinDesk 20 and offers a diversified basket beyond Bitcoin, Ethereum and the biggest names. The second is the MarketVector Digital Assets 100 Small-Cap Index, which tracks the 50 smallest tokens in a 100-asset basket and serves as a barometer for the “junk end of the market.”
More of a research product than a tradable benchmark, Kaiko’s Small Cap Index provides a clear, sell-side quantitative perspective on the smaller asset cohort. Together, these three form a spectrum: broad alt-basket, high-beta micro-caps and a quantitative research perspective. All three tell the same story.
Sharpe Ratios and Drawdowns
Risk-adjusted returns tilt the comparison even further. The CoinDesk 80 and small-cap alt indices delivered sharply negative returns with equity-like or higher volatility. CoinDesk 80 values fell -46.4% in a single quarter. MarketVector’s small-cap indicator fell to pandemic-era lows in November after another decline.
Broad alt indices experienced several high-to-low moves exceeding 50% at the index level: Kaikos -30%+ for small caps in 2024, the CoinDesk 80s -46% in Q1 2025, and small cap indices hitting 2020 lows again in late 2025. In contrast, the S&P 500 and Nasdaq-100 posted consecutive total returns of 25% and 17%, respectively, with worst-case declines in the mid-teens.
Implications for Bitcoin Investors and Crypto Liquidity
Liquidity concentration and quality migration form the first implication. Bloomberg and Whalebook’s coverage of the MarketVector small-cap index highlighted that smaller alts have consistently underperformed since early 2024 and institutional inflows have instead been directed to Bitcoin and Ethereum exchange-traded products.
Combined with Kaiko’s observation that alt volume dominance has returned to 2021 levels but is concentrated in the top 10 altcoins, the pattern is clear: liquidity moved up along the quality curve rather than exiting the cryptocurrency entirely. The “Alt Season” acted as a basis trade rather than a structural outperformance.
Conclusion and Future Outlook
The 2024 and 2025 periods tested whether altcoins can provide diversification value or outperformance in a risky macro environment. As a result, US stocks recorded double-digit gains with manageable declines. Bitcoin and Ethereum gained institutional acceptance through spot ETFs and benefited from regulatory de-escalation.
Broad altcoin indices lost money, suffered steeper declines, and maintained high correlation to cryptocurrencies and large-cap stocks without compensating for the additional risk. Institutional inflows followed performance. The MarketVector small cap index’s five-year return of -8% compared to the large cap index’s +380% return reflects capital migration into assets with regulatory clarity, liquid derivatives markets and custody infrastructure.
For more information, visit https://cryptoslate.com/small-cap-crypto-assets-just-hit-a-humiliating-four-year-low-proving-the-alt-season-thesis-is-officially-dead/
