"Altcoin Season Delayed: Meme Coins Lure Traders, Retail Investors Burned"

Crypto analyst Miles Deutscher has shed light on the delayed onset of the much-anticipated altcoin season, attributing it to a shift in speculative capital from major altcoins to low-cap on-chain meme coins.

Historically, when Bitcoin (BTC) rallies, speculative capital flows into mid-to-high market cap altcoins, sparking what traders refer to as "alt season." However, this cycle has played out differently this time around. Instead of moving into top altcoins, traders have been chasing fast-moving low-cap on-chain tokens, leading to a delay in the altcoin season.

Deutscher pointed to the rise of Pump Fun, a platform facilitating easy on-chain meme coin creation, as a key factor diverting capital away from major altcoins. This platform allows users to launch and trade meme coins instantly, creating a casino-like environment in the crypto market. While this leads to massive gains for early adopters and insiders, latecomers, mostly retail investors, often suffer heavy losses as these illiquid tokens frequently 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, this time around, retail investors have been getting stuck in illiquid on-chain meme coins. This has resulted in a wealth destruction event that is even greater than the early 2022 bear market, despite Bitcoin and some major altcoins still being in a macro bull trend.

Interestingly, Deutscher does not blame Pump Fun for this phenomenon. He argues 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 his post with a hopeful speculation that the situation might change under the Trump administration.