Altcoins have gone five years without a major rally, and many traders have given up hope. Crypto analyst Lark Davis thinks that is a mistake. He points to an economic signal that has just turned for the first time in years, and argues that the coming altcoin cycle could be bigger than the last.
Why small caps could lead
Davis believes the biggest gains will not come from the coins that have already rallied, such as Hyperliquid, Zcash and NEAR. Zcash alone is up 20 to 30 times from its lows, he said, which limits how much room is left.
Instead, he sees opportunity in established small-cap protocols that the market has ignored. Many are earning more revenue than ever, he said, yet their tokens have been crushed because attention has drifted away from crypto. “Some of these will 10, 20 or even 30x,” he said.
Why he is avoiding Starknet
Starknet has drawn heavy attention in recent days, but Davis is not buying. He argued the project has failed to deliver for years and now plans to rebrand as a quantum-resistant layer 1, a move he dismissed.
The numbers do not support its price, in his view. Starknet carries a fully diluted valuation of about $1 billion and a market value of about $750 million, yet it recorded only about 5,000 active addresses in 24 hours. Even Cardano sees about 15,000, he said.
He suggested NEAR as a stronger alternative, saying it has already shipped quantum resistance, has real adoption and still trades about 75% below its record high. He also named Sui as a layer 1 that has not yet rallied.
Aerodrome: a case study in value
Davis held up Aerodrome, the leading exchange on Base, as an example of a strong protocol still trading at a reasonable price.
- Big launch: Aerodrome’s merged exchange with Velodrome goes live on October 21 across seven chains, including Base, Arbitrum and Robinhood Chain.
- Fast growth: It has grown from 9% to 40% of tokenized stock trading volume on EVM chains over the past 30 days.
- Rewards: It has paid more than $500 million to voters in three years, more than any other exchange.
Aerodrome vs Uniswap
- Aerodrome: $1.8 billion fully diluted valuation, $14.38 billion in 30-day volume, $11.4 million in 30-day fees
- Uniswap: $6.7 billion fully diluted valuation, $79 billion in 30-day volume, $132 million in 30-day fees
Aerodrome is valued at roughly a quarter of Uniswap. Davis said that leaves room to catch up, given how much it returns to holders. He also pointed to a chart breaking out after years of basing near 30 cents.
He did add a warning. Aerodrome has already rallied ahead of the October 21 launch, and a “sell the news” drop could follow, so investors need not rush in.
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