The cryptocurrency market is evolving at an unprecedented pace, and veteran investor Shenyu has offered insightful commentary on the current bull cycle, particularly during his appearance at the Hong Kong Web3 Carnival. His views challenge conventional wisdom—especially the long-held belief that every Bitcoin bull run inevitably triggers a widespread altcoin season. Instead, Shenyu argues that this cycle may diverge from historical patterns due to structural shifts in market participants, capital flows, and ecosystem development.
The Altcoin Season Might Not Happen This Time
One of the most anticipated phases in any crypto bull market is the so-called “altcoin season”—when capital rotates from Bitcoin into smaller-cap cryptocurrencies, driving explosive gains across the altcoin space. However, Shenyu believes there’s a high probability that such a season won’t materialize this time around.
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Why? Because the market players have fundamentally changed. Unlike previous cycles dominated by retail speculation and miner sell-offs, today’s landscape includes institutional investors, publicly traded mining firms, and Bitcoin spot ETFs. These entities operate under different risk profiles and capital allocation models.
For instance, after the approval of Bitcoin spot ETFs in January 2025, many miners began hedging their BTC holdings months in advance to mitigate halving-related risks. Meanwhile, major mining companies relocated operations to low-cost regions like South America and Africa, enabling them to maintain healthy gross margins—even with older-generation hardware—despite reduced block rewards post-halving.
With Bitcoin’s price rising ahead of the halving event, these structural changes have lessened the economic pressure on miners, reducing forced selling and dampening one of the traditional catalysts for altcoin rallies.
Moreover, capital inflows are now primarily funneled through ETFs and institutional gateways, which are overwhelmingly Bitcoin-focused. There's no clear signal yet on when—or if—this capital will spill over into altcoins. As Shenyu notes, we’re still observing.
So where does the market stand now?
“I think it is likely that we are in the middle of the bull market. The market has begun to pick up and has found a new narrative logic, but it is not yet in a very high leverage and FOMO state.”
Rather than relying on outdated metrics or historical analogs, Shenyu emphasizes a dynamic approach: continuous observation, asset rebalancing, and mental resilience. This mindset helps investors stay grounded during volatility and potentially improve long-term returns.
The Necessity of Expanding the Bitcoin Ecosystem
Despite being viewed by purists as a digital store of value resistant to change, the Bitcoin ecosystem is undergoing a quiet revolution. From Layer2 solutions and sidechains to NFTs and tokenized assets like $ORDI, innovation is flourishing—even if it’s happening off the main chain.
Shenyu observes that Bitcoin’s core function remains decentralization and stability, making major upgrades on Layer1 impractical. But innovation doesn’t stop there.
Instead, it's emerging bottom-up, through second-layer protocols and community-driven experiments. Projects like the Lightning Network initially struggled with real-world use cases, but new economic incentives have attracted genuine user adoption—marking a turning point.
“With the sedimentation of a large number of assets on Bitcoin, these assets have an urgent need to earn yield—just like they do on Ethereum.”
Until recently, this demand had no outlet within Bitcoin’s ecosystem. Now, various yield-generating and smart contract-compatible layers are being tested. While still in early stages, these developments could unlock trillions in dormant value.
Importantly, Shenyu highlights that Bitcoin’s governance is inherently decentralized—a three-way balance between core developers, miners (via hash power voting), and users. No single group can unilaterally block innovation.
This was evident when Bitcoin Core developer Luke Dashjr criticized NFT inscriptions as “spam,” sparking a temporary dip in $ORDI. Yet the market continued evolving—because decentralized networks follow market demand, not individual opinions.
Just as Ethereum’s early days were chaotic yet eventually gave rise to DeFi and NFTs, Bitcoin may follow a similar path: messy beginnings leading to transformative breakthroughs.
Modular Blockchain: The Next Frontier
One trend Shenyu is closely watching is modular blockchain architecture—a paradigm shift that separates consensus, data availability, execution, and settlement into distinct layers.
This approach addresses long-standing issues like scalability, high transaction costs, and performance bottlenecks. Over the past five to six years, the industry has moved away from monolithic chains toward modular designs that allow greater flexibility and efficiency.
“Everyone finally chose the modular blockchain approach, making compromises and balances at different levels.”
For end users, this means lower costs and better experiences without needing to understand blockchain mechanics. Innovations like MPC (multi-party computation) wallets, smart contract accounts (SCW), and passkey-based AA wallets are paving the way for seamless onboarding.
While some argue this sacrifices decentralization, Shenyu sees it as a pragmatic trade-off:
- High-value applications can still run on decentralized Layer1s.
- Low-value transactions can operate on optimized Layer2s with "weak decentralization"—secure enough for most use cases.
👉 Explore how modular blockchains are reshaping crypto infrastructure
The result? A richer, more diverse ecosystem where choice meets usability.
Managing Investment Psychology: Beyond FOMO
Even seasoned investors face emotional challenges. When asked about his current mindset, Shenyu candidly admits: FOMO still exists—it’s biological.
But in 2025, he’s learned to manage it through deliberate reflection. After stepping back during the bear market to read and analyze past mistakes, he found that slowing down reduces impulsive decisions.
His strategy?
- Conduct a thought experiment: If something excites you, wait 24–48 hours before acting.
- Ask: What is its core value? Can it capture long-term value?
- Zoom out: View the market from a macro perspective to avoid short-term noise.
He also acknowledges generational shifts in investing behavior. Post-2000 investors, raised in digital environments, are more attuned to online sentiment and rapid trends.
“They are Internet natives. Their sensitivity to market emotion far exceeds ours.”
While older investors focus on macro cycles and structural plays, younger participants thrive on sentiment-driven moves. Both approaches have merit—but require clarity: Are you chasing cycle money or sentiment money?
Frequently Asked Questions
Q: Why might there be no altcoin season this bull run?
A: Capital is flowing primarily into Bitcoin via ETFs, miners are better hedged post-halving, and institutional participation has changed market dynamics—reducing the traditional triggers for altcoin rallies.
Q: Is innovation possible on Bitcoin despite its rigid protocol?
A: Yes—through Layer2s, sidechains, and community-driven projects. While Bitcoin Core prioritizes stability, bottom-up experimentation allows ecosystem growth without compromising security.
Q: What is modular blockchain architecture?
A: It’s a design that splits blockchain functions (consensus, execution, etc.) into separate layers for improved scalability and flexibility—enabling better performance and lower costs.
Q: How can investors manage FOMO effectively?
A: By introducing reflection periods before investing, focusing on core value propositions, and adopting a long-term macro view rather than reacting to short-term hype.
Q: Are younger investors changing crypto markets?
A: Absolutely. Digital-native investors born after 2000 are more responsive to online sentiment and trends, creating new dynamics distinct from older, cycle-focused investors.
Q: What should investors focus on in 2025?
A: Monitor modular blockchain development, Bitcoin ecosystem expansion (especially yield opportunities), and evolving custody solutions like keyless wallets.
Final Thoughts
Shenyu’s insights paint a picture of a maturing crypto market—one where old assumptions are being rewritten. With Bitcoin ecosystem growth, modular infrastructure, and generational shifts in investor behavior, this bull cycle may not follow the script of previous ones.
The absence of an altcoin season doesn’t mean lack of opportunity—it signals evolution. And for those willing to observe patiently and think deeply, the rewards may be even greater.
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