Crypto’s Riskiest Tokens Plummet to Pandemic-Era Levels

Core Insights - The crypto market is experiencing a significant selloff, particularly affecting small-cap tokens, with the MarketVector Digital Assets 100 Small-Cap Index reaching its lowest level since November 2020 [1] - Bitcoin has erased its approximately 30% gain for 2025 through early October, while altcoins have underperformed compared to larger cryptocurrencies since early 2024 [2][3] - The decline in small-cap tokens is impacting plans for exchange-traded funds (ETFs) linked to these assets, with around 130 ETF applications pending with the US Securities and Exchange Commission as of mid-October [4] Market Performance - The small-cap index has decreased nearly 8% over the past five years, contrasting sharply with the large-cap index, which has surged about 380% [6] - The broader crypto market suffered a significant meltdown on October 10, resulting in approximately $19 billion in liquidations and over $1 trillion in market value loss across all tokens [7] Investor Sentiment - Retail traders are becoming more cautious, learning that not all assets benefit equally in rising markets, as highlighted by the performance disparity between small-cap and large-cap cryptocurrencies [6] - The ongoing struggles of altcoins have led market observers to advise investors to conduct thorough research before making investment decisions [7]