In a recent clip shared by crypto news outlet Wu Blockchain on X, BitMEX co-founder Arthur Hayes dives into what it really takes for altcoins to thrive in the next season. Drawing from his October 10 interview on the "When Shift Happens" podcast, Hayes highlights how the crypto landscape has evolved beyond pure hype. If you're into meme tokens or broader altcoin plays, his insights could shape how you approach the market moving forward.

Lessons from Past Altcoin Cycles

Hayes starts by contrasting Bitcoin with other decentralized apps (DeFi projects, for short). Unlike Bitcoin, which isn't about generating cash flow, altcoins often aim to disrupt traditional businesses. They charge users for services and should pass some of that revenue back to token holders – think dividends, but in crypto form.

But here's the catch: most projects from previous cycles flopped on this front. Hayes points out that many lacked actual users or "product-market fit," meaning they built cool tech without anyone really needing it. Even the successful ones often failed to reward their communities properly, leading to investor fatigue.

Take the 2020-2021 DeFi Summer as an example. Projects lured users with token incentives, creating short-lived economic games. It all boomed, then crashed when the freebies dried up and no real value stuck around. Fast-forward to 2023-2024, and we saw venture capitalists (VCs) pumping prices through high fully diluted valuations (FDV) and low circulating supply. Retail investors caught on, realizing there was no long-term substance, and stopped playing along.

The Shift Toward Real Value in Altcoins

According to Hayes, we're now entering a more mature phase. The true altcoin season will favor projects with paying customers who generate genuine revenue. Crucially, these projects need to share profits with token holders to build loyalty and sustainability.

He shouts out Hyperliquid as a prime example. This decentralized exchange (DEX) for perpetual futures has been killing it by attracting real traders and distributing value back to its community. It's not just hype – it's a business model that works.

For meme token enthusiasts, this is a wake-up call. While memes thrive on community and virality, Hayes' framework suggests that adding utility could be key to longevity. Imagine meme projects incorporating revenue-sharing mechanics, like from NFT sales or gaming integrations, to reward holders. Tokens like Dogecoin or Shiba Inu have massive followings, but evolving toward cash flow generation could position them for the next big run.

Implications for Meme Tokens and the Broader Market

In the meme space, where fun often trumps fundamentals, Hayes' prerequisites encourage a hybrid approach. Projects that blend viral appeal with actual earnings – perhaps through decentralized apps or partnerships – might outpace pure speculation plays. As the market matures, investors are demanding more than memes; they want returns that last.

If you're scouting for the next big thing, look for altcoins with active users, solid revenue streams, and clear tokenomics that benefit holders. Hayes believes this evolution in expectations will define the winners in the ongoing bull cycle.

Check out the original clip on X for the full rundown, or dive deeper into the complete interview on YouTube. As always, this isn't financial advice – do your own research and stay informed on the latest blockchain trends.