Crypto markets continue to spark debate after a disappointing cycle where most altcoins lagged far behind Bitcoin. Market analyst Willy Woo argues that structural forces, not weak fundamentals alone, drove this divergence.
He points to events following FTX’s 2022 collapse as a turning point that reshaped capital flows and investor outcomes. Consequently, many retail participants entered positions without realizing that significant supply had already been redistributed behind the scenes.
How Post-FTX Deals Reshaped Markets
After FTX entered bankruptcy, liquidators rushed to sell large holdings, including locked Solana tokens. However, these tokens could not move on-chain immediately.
Instead, firms structured legal agreements that allowed buyers to secure future delivery at steep discounts. Hedge funds stepped in aggressively, often purchasing tokens at more than 60% below market value.
Moreover, these funds neutralized risk by shorting SOL futures. This strategy created a powerful yield opportunity. Combined with staking and basis trades, returns reached roughly 70% to 80%. As a result, sophisticated players captured predictable profits while avoiding directional exposure.
Synthetic Selling Pressure Hurt Altcoins
Besides direct liquidation, this model spread quickly across the industry. Project teams and early investors replicated the structure by selling locked allocations privately. They then hedged exposure through derivatives markets. Consequently, this created persistent synthetic selling pressure without visible on-chain activity.
Retail investors, meanwhile, bought tokens near peak valuations. They faced declining prices as hidden supply entered markets indirectly. Hence, many altcoins failed to sustain upward momentum between 2023 and 2025. Bitcoin, however, followed a different trajectory. It surged over 400% to around $88,000 and maintained dominance between 55% and 60%.
Significantly, Bitcoin markets remained more transparent. Large holders sold openly, which allowed price discovery to function more efficiently. This contrast reinforced Bitcoin’s relative strength during the cycle.
What Comes Next for Crypto Markets
However, Woo suggests that the situation may now shift. Many locked tokens that investors feared have already been sold off-chain. This reduces the likelihood of future supply shocks. Additionally, it could create a more balanced environment for altcoins in the next cycle.
Nevertheless, risks remain. Market-neutral strategies still dominate institutional behavior. Moreover, information asymmetry continues to disadvantage retail participants. Woo ultimately advises a cautious approach, favoring Bitcoin exposure over speculative bets on altcoins.
Conclusion
Coin Edition views Woo’s analysis as a critical reminder of the risks posed by market structure. Institutional strategies increasingly shape crypto outcomes. While Bitcoin benefited from transparency, altcoins suffered from hidden liquidity shifts. Consequently, investors must remain cautious and informed when navigating future cycles.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
