The bull market pauses, here are four key points for screening potential altcoins in 2025

Author: The DeFi Investor

Compiled by: Tim, PANews

The crypto bull market is back, at least for the time being.

The question is: Which altcoins will deliver outperformance?

During the 2021 bull run, almost every altcoin saw a surge. But things have changed since then.

With millions of new altcoins now available, achieving outperformance requires careful selection.

In this article, I'd like to share my list of crypto projects and key considerations for screening.

Let's get started

1. Narrative Heat and User Mind

Think about the best-performing tokens of the past 12 months.

HYPE, VIRTUAL, and memecoins come to mind first.

Do they all have strong fundamentals? Platforms like HYPE certainly do, but the vast majority of the top performers listed below certainly don't.

Source: Coingecko’s Top Crypto Gainers in 2024 article

They all have one thing in common: a high user mindshare on social media and a dedicated group of fans tirelessly promoting them on platform X.

In addition, the success of most of the top performers is also related to a strong narrative.

• Virtual continued to surge as AI concepts gained popularity.
• Memecoins saw a surge in value between Q4 2024 and early Q1 2025 due to the popularity of online memes.

My advice is to identify currently trending narratives, search for them, and then choose tokens with highly active communities on Twitter.

2. Growth Metrics

In a bull market, market hype (unfortunately) matters far more than fundamentals. But the good news is that some projects achieve both high attention and strong product-market fit.

If a project possesses both of these qualities, it could be a great investment, especially if its key metrics have recently seen explosive growth.

Let me give you an example: the stablecoin protocol Ethena has seen its TVL surge 50% over the past 30 days. Meanwhile, many users and analysts on Twitter are following and analyzing the project.

The result? Ethena's token, ENA, has risen 154% over the past month.

By betting on early-stage projects that consistently show growing metrics (such as TVL, revenue, and fees) and possess significant community interest, you can make a killing.

I often use DeFiLlama to identify the fastest-growing projects.

3. Sound Token Economics

If you plan to hold a token for only a few days, token economics won't matter much; however, if you're investing for the medium to long term, the situation becomes completely different.

For example, the TIA token has plummeted over 90% over the past 17 months due to massive sell-offs by early investors after each token unlock.

This is why it's important to understand token economics before purchasing a token.

Key points I look for when researching a token:

Token Unlock Chart

Tokenomist can track the token economics and unlocking history of many popular tokens.

​​Generally speaking, I look for a minimum of 30% of the circulating supply, with annual token releases (i.e., inflation) capped at 20%-35%.

In addition, if there's a significant token unlock in the near future (e.g., unlocking more than 20% of the current circulating supply), I prefer not to buy the token.

Token Utility

I always ask myself two questions:

Will the token I'm considering buying benefit from the success of the protocol? Why would someone be willing to pay more for it than I would?

A dividend mechanism or token buyback program is the best option I can think of.

While strong token utility is a huge advantage, it's not a requirement. I've seen many tokens with virtually no utility perform exceptionally well.

4. Community-First

A community-first project is more important now than ever.

More and more people are reluctant to invest in vague and uninteresting projects and are more willing to support teams that are community-focused.

This is one reason I believe tokens like HYPE and PENGU have performed so well recently.

Some characteristics of a community-first crypto project:

• Large airdrops
• The team consistently under-promises and over-delivers.
• Team-driven marketing: The team is very active on platform X and continuously engages with the community.
• A large portion of the token supply is allocated to the community.

These are the main factors I consider when selecting a token.

Another important factor that could drive a token's price higher is the impending arrival of a significant catalyst that's not yet factored into the current price.

Possible positive catalysts include upcoming protocol upgrades, improvements to the token economics model, or the release of new products that significantly increase project returns.

​​Even the best assets are bad investments if they're overpriced.

Wait patiently for the right opportunity and act accordingly, avoiding FOMO (fear of losing money) and buying into rising prices.