Miles Deutscher points out the reason altcoin season hasn’t happened yet

Crypto analyst Miles Deutscher pointed out that the reason altcoin season hasn’t started yet is that speculative capital has shifted from major altcoins to on-chain low-cap meme coins.

The much-anticipated altcoin season has yet to materialize, and Miles Deutscher believes he knows why. In his recent post on X, Deutscher pointed to the rise of Pump Fun, a platform facilitating easy on-chain meme coin creation, as the key factor diverting capital away from major altcoins.

Historically, when Bitcoin (BTC) rallies, speculative capital flows into mid-to-high market cap altcoins, fueling what traders call “alt season.” According to CMC Altcoin Season Index, the crypto market is considered to be in the alt season when 75% of the top 100 coins (excluding stablecoins like Tether and DAl as well as the asset-backed tokens such as WBTC, stETH, and cLINK) outperform Bitcoin in the last 90 days. CMC Altcoin Season Index currently stands at 37.

According to Deutscher, this cycle has played out differently because rather than moving into top altcoins, traders have chosen to chase fast-moving low-cap on-chain tokens instead. “The reason we’ve seen no major ‘alt season’ across majors is because the speculative capital that would’ve once poured into top 200 assets instead decided to jump the gun and flood into on-chain low caps,” Deutscher remarked.

Platforms like Pump Fun allow users to launch and trade meme coins instantly, creating a casino-like set-up in crypto. This leads to massive gains for early adopters and insiders while latecomers (mostly retail investors) suffer heavy losses as these illiquid tokens often lose most of their value shortly after being launched.

Unlike in 2022, when most retail losses were confined to major altcoins trading on centralized exchanges with decent liquidity, Deutscher argues that this time around, they got stuck in illiquid on-chain meme coins. “This became a wealth destruction event much greater than the early 2022 bear (LUNA aside), even though Bitcoin (and some majors) are still in a macro bull trend,” he explained.

Interestingly, Deutscher does not “blame” Pump Fun for this. He explains that restrictive SEC regulations have made it difficult for projects to launch fairly through traditional means, forcing the industry to seek new models. He ended the post with a hopeful speculation that “maybe that will change under Trump.”