Bitcoin’s retreat has wiped out roughly 30% of its 2025 gains through October as a broad crypto selloff continues to press the market. A basket of the smallest cryptocurrencies fell, with the MarketVector Digital Assets 100 Small-Cap Index—the gauge for the 50 smallest assets in a 100-asset basket—dropping to its lowest level since November 2020 before trimming losses. The decline came as Bitcoin, the largest cryptocurrency, erased its roughly 30% advance for 2025 through early October, hitting a record.
So-called altcoins, a barometer of risk appetite in the most speculative corners of crypto, have trailed their larger counterparts by a wide margin since early 2024. In past bull markets, the small-cap index often outpaced its large-cap counterpart, benefiting from traders’ hunger for high-risk, high-reward bets. That trend reversed last year after the US approved Bitcoin and Ether exchange-traded products, which became a focal point for institutional flows. The altcoin malaise risks derailing issuers’ plans to list a host of exchange-traded funds tied to such tokens.
One product linked to Dogecoin, created as a joke in 2013, began trading in September under the ticker DOJE; that ETF has not seen inflows since October 15. Dogecoin has fallen 13% in the past month. Retail traders are learning lessons from previous cycles, with portfolio managers noting that rising tides now lift only the quality bets. The broader market remains reeling from an October 10 meltdown that triggered about $19 billion in liquidations and wiped out more than $1 trillion in market value across all tokens, and risk appetite has since collapsed as traders steer clear of the most speculative coins. With altcoins stuck in a rut, many market watchers caution that investors should do more research before diving in. Investors should focus on understanding the true value of any altcoin, why it exists, and who is behind it, from both institutional and leadership perspectives.
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