Why There Won't Be An Alt Season This Cycle

Summary

• No alt season this cycle — Avi has been “pounding the table pretty early” that broad alt season is dead: “there’s just too many coins… there’s just not enough capital.” Coinbase is flipping from whitelist to blacklist because a million tokens a week are being created; what replaces alt season is sector-based rotations, and Avi “fully expects an AI altcoin season” later this year with agents “crossing the chasm” as the catalyst.
• The DeepSeek panic is a buying opportunity, not a thesis change. Jonah’s highway analogy: cheaper AI means more demand, not less — “if you take something like ChatGPT and it becomes cheaper to run, more people are going to sign up” — and he deployed sidelined cash into equities on the dip. Avi doubts DeepSeek’s compute claims (Scale AI’s CEO says it trained on unreported H100s) but says it’s “massively bullish” for everything in the S&P beyond Nvidia.
• Crypto’s tell: the market got smarter. Two years ago every OpenAI release pumped AI coins; this genuine breakthrough produced nothing but Alchemy Pay +90% as a “Chinese coin.” Bitcoin held mid-range — down 1% versus NASDAQ’s 3.5% — which both hosts read as relative strength, not fragility.
• ETH is “fucked” — sell every pop. Avi thanked Jonah for talking him out of ETH last year: “what a dud.” Jonah says there’s no leadership, “the Ethereum Foundation’s a joke, Vitalik is checked out,” and the ETF moat disappears within 6-8 months as XRP, SOL, and maybe LTC ETFs arrive — “who buys eth in this scenario?” At a $380B FDV, even a slow death is “a nice high-sharp trade”; a full short squeeze only takes ETH/BTC to 0.045, which Avi calls “the greatest short of a lifetime.”
• Sovereign front-running of the US Bitcoin reserve has started: Jonah cites a Russian Duma proposal (Dec 9), a Canadian politician likely named Pierre Poilievre, a bill in Brazil, and a proposal being considered in Chile, plus Texas, Pennsylvania, Ohio, Florida and other US states in various phases — and if Texas moves, “you can be damn sure the Texas teachers retirement system” follows. Portfolio doctrine: be mostly Bitcoin or be truly convicted, because “your alts are getting diluted every single day.”
• Near-term posture: “cash is very valuable right now.” Jonah is unambiguously bullish over two months but sees FOMC and no SBR news for 1-2 weeks, so he’d love to buy Bitcoin 10% lower near the range bottom at 90. Avi wouldn’t short Bitcoin because sovereign and government buying is coming. Active trades: short SUI off the 50-day MA break-and-bounce (triggered), look for JTO around its releases, long XRP/short ETH — and Berachain’s launch as a liquidity suck that hurts every other L1.
• The next big trade is real revenue vs. L1 shells. Jito’s tip router routes an extra $40-80M a year to its DAO treasury, and the new regulatory environment may let Uniswap/Maker-style fee generators pay holders. Avi’s plan: build a Token Terminal basket of top revenue earners and short L1s against it — “who the fuck is buying Optimism or Arbitrum right now?” And for memes: “don’t buy the game, buy the casino — the casino is called Solana.”

Deep dive

1. Dispersion of opinion is bullish — the Sunday implosion already climaxed

• Avi’s setup: he tweeted that “there’s a lot of dispersion in market opinion recently and that’s unequivocally bullish,” then the market imploded Sunday night — and weekend implosions “come to a climax on Monday because everyone’s adjusting to the new information and they all get out.” He thinks that just happened.
• Jonah agrees: prominent traders are calling cycle peak while others say fourth or fifth inning — “frankly, who cares about innings, it’s about price.” This was a technical selloff, not fundamental, like last year’s midsummer rate-hike or liquidity shock that was “the buying opportunity of the year.” Bitcoin traded down to 97,500 and is back at 101.5k, “right smack in the middle of the recent range” despite NASDAQ -3.5% and Nvidia down 17-18% — though after the bounce, “it’s not a screaming buy.”

2. DeepSeek is a misread — cheaper AI means more demand, not less

• Jonah’s framing echoes the old blockchain-fees debate: widening a highway just lets more people drive on it. “If you take something like an orange and you cut the price in half, more people are going to buy it” — he doesn’t think demand for AI is finite, things that were cost-prohibitive become economic, and no one but OpenAI had a moat anyway since Llama and DeepSeek are open source. “This is an overreaction,” so he bought equities with sidelined cash (already at full crypto exposure).
• Avi’s caveat — worth keeping: “if deep seek is real, which I doubt it is” — Scale AI’s CEO says it was trained on an unreported cluster of Nvidia H100s. The hosts’ deadpan exchange asks whether a Chinese-based company might have lied before joking that markets are fraud-free.
• Even granting the claims: maybe less near-term data-center spend, bad for Nvidia and Blackstone’s data-center bets, but if you can run “O3-level AI at the edge with a couple of Mac Studios,” it’s massively bullish for the rest of the S&P — and bullish for crypto’s AI thesis, since anyone could spin up a powerful decentralized AI app and “slap a token on it.”

3. The market got smarter — AI coins didn’t even rally

• Jonah’s observation: for years, any OpenAI model launch or Nvidia earnings pumped AI coins “for no reason” — that worked as recently as six months ago. This time an “insane development” in AI produced no broad-based reaction; only Alchemy Pay (+90% as a “Chinese coin”) and Conflux (+10%) moved. “The market is really genuinely rewarding research” — dispersion everywhere.

4. No alt season this cycle — too many coins, not enough capital

• Avi’s call, made when “I think I was the only one” and now consensus: no alt season, only sector-based seasons. There was a “dino season” (XRP, likely HBAR, and the 2017 and 2013 coins going ballistic), and he “fully expects an AI altcoin season” later this year — catalyst: “agents crossing the chasm into mainstream usage,” with tokens accessed through agent terminals, games, and gambling.
• Why no broad season: “there’s just too many coins.” Avi says he thinks Brian Armstrong tweeted that a million tokens a week are being created, so Coinbase is switching from whitelist to blacklist — “when you’re in that world, there’s just not enough capital for an alt season to happen.”
• What passed for one: a Nov-Dec window where alts rallied but underperformed Bitcoin — Chainlink $14 to $28 and straight back down, Litecoin $82 to $120 (“it didn’t go from 80 to 400 like it has in previous cycles”), Ripple the lone standout because it “was actually a genuinely good coin to buy.” Avi’s read: “the cycling of capital is pretty insane right now.”

5. ETH: “they’re fucked, man” — sell every pop

• Avi’s change of mind, as told: “thank you for talking me out of eth last year — what a dud.” His old thesis was that ETH’s regulatory moat would protect it even with inferior tech; now “we are very close to just being completely over for this asset.”
• Jonah’s indictment: “they have no real leadership, the Ethereum Foundation’s a joke, Vitalik is checked out” as much as he claims he’s not, and the ETF advantage evaporates in 6-8 months as XRP, SOL, and possibly Litecoin ETFs land — “who buys eth in this scenario?” The mechanics: every ~10 days ETH pops 3% against Bitcoin on short covering — “sell every pop.” Even a total squeeze only reaches ETH/BTC 0.045: “that would be the greatest short of a lifetime.” The contrarian ETH-outperforms trade has failed for six months — “sometimes there’s a reason people are bearish… just because everyone realizes it doesn’t mean it can’t go down more.”
• Avi wonders aloud about a Solana-style resurrection: post-FTX, a walking app (likely STEPN) with “Solana sneakers” bowled over the network, the core team fixed it, and SOL went $8 to $280 — “one of the best trades in the history of crypto.” His ETH version requires the foundation to “ride off into the sunset” and hand the asset to Base; Jonah calls mainnet today “like using a rotary phone,” and says it took him 10 minutes to move his money to Base. Meanwhile, at a $380B FDV, “even if it dies slowly you have a nice high-sharp trade.”

6. SBR front-running is already happening — nations and US states

• Jonah reads from 13D (a service he pays for — “this is not an ad”): the mere discussion of a US SBR, plus Trump saying the US won’t sell its Bitcoin, “are sufficient to confirm some early adopter countries to front-run the competition.” Receipts: a Russian Duma deputy’s Dec 9 proposal to the finance minister, a Canadian politician likely named Pierre Poilievre’s Bitcoin enthusiasm, a Brazilian congressman’s bill, and Chilean deputies considering a proposal.
• Avi adds the underappreciated layer: US states may lead — Texas, Pennsylvania, Ohio, Florida, Oklahoma, New Hampshire, North Dakota are all in various phases. Jonah: if Texas moves, “you can be damn sure the Texas teachers retirement system” — one of the largest passive vehicles in the country — ups its ante.
• The portfolio consequence, per Jonah: if your core longs aren’t mostly Bitcoin, “you’d better be really convicted… your alts are getting diluted every single day.” No altcoin has consistently outperformed Bitcoin — Jonah offers Solana, but it’s still below its 2021 highs. Alts are for catching early (the VC edge) and exiting fast, “not sitting on your bags for five years.”

7. Positioning: cash into FOMC, buy 90, and short the L1 complex

• Jonah’s posture: the best trade is buying Bitcoin on liquidation runs, and the range bottom at 90 is a buy — but with FOMC now and no SBR news likely for one to two weeks, “cash is very valuable right now.” He’s “unambiguously bullish over the next two months” and would love Bitcoin 10% lower. Avi wouldn’t short it: sovereign and state buying “is coming, and it seems like it’s not very far out.”
• Live trades: short SUI on the 50-day moving-average break-and-bounce he flagged a month ago (now triggered), look for JTO around its releases; long XRP/short ETH still works, though ETH has fallen enough to make him nervous on the short leg.
• Berachain’s imminent launch could be a liquidity suck that makes the SUI short better — SUI is “the only new sexy L1” until HyperEVM ships (“whenever a crypto project says Q1 they mean the first week of Q2; if it’s eth, Q1 means four years later”). Avi’s respect from talking to the team: “they just refused to launch anything before they knew they could go live with actual applications” — and “if on the first day we don’t, then I’m just wrong about the thesis.”
• Jonah’s pushback: “the world just doesn’t need another L1” — Avi would only “buy it on a yolo” below a $3B FDV, “above that, not touching it with a 10-foot pole.” Both marvel that a chain whose mascot is a bear smoking a bong got likely Susquehanna and Brevan Howard in — proof “it’s not just the tech that matters.”

8. Real revenue is the next trade; memes — buy the casino, not the game

• Avi’s analyst flagged that Jito’s tip router goes live in three days, routing an extra $40-80M a year to the Jito DAO treasury. In the new regulatory environment, fee generators like Uniswap and Maker “are going to figure out how to use those fees properly” without fearing the SEC — so his post-podcast plan: pull the highest-revenue projects from Token Terminal, buy the basket, and short L1s against it. “Who the fuck is buying Optimism or Arbitrum right now? Avalanche? Polkadot?”
• The hosts have discussed this for over a year: tokenized fee passthrough is “crypto’s moment” — tokens beat LLCs for aligning incentives (their own THX agent distributed tokens instead of thousands in legal fees), and adoption will be “slowly, then all at once” once a bill passes and hedge-fund money buys “real dollarized yield.”
• On memes: Jonah thinks old-school memes are toast — he tweeted “WIF is going to zero” live on air (“always be posting is a great way to suss out how engaged the community is”). Avi still hunts survivors by vibes: “go in the Discord — are there good vibes?” Avi calls Trump coin “a phenomenal short in like three years” — unless Trump becomes “God emperor of the United States,” probability pegged at 18%.
• The closing metaphor: people were right that memecoins are the new games but wrong about what earns — “one given meme coin is not the casino… the casino is called Solana. So don’t buy the game, buy the casino.”