Ethereum Leads, Bitcoin Lags: Is Altseason Around The Corner?

Altcoin Season 2025: Are We Finally There?

For years, the crypto community has been eagerly awaiting the arrival of the so‑called “altcoin season” — a period when alternative cryptocurrencies outperform Bitcoin. In 2025, the debate is alive again as Bitcoin’s dominance slips and Ethereum surges. But is this the real thing, or just another round of false alarms?

Bitcoin Dominance Under Pressure

Bitcoin’s market dominance has traditionally been the compass for crypto cycles. After holding above 66% as recently as June, Bitcoin’s share of the overall market has now fallen below 60% for the first time in half a year. Analysts suggest this isn’t a random wobble. 

The decline mirrors previous five‑wave patterns that marked transitions in market leadership. The implication is clear: capital is rotating away from Bitcoin, with altcoins absorbing more attention and inflows.

According to Stefan Burgherr, Head of Research at 21Shares, the shift away from Bitcoin dominance is becoming more apparent. He noted that investors are no longer treating BTC as the sole benchmark of growth. 

Instead, he described altcoins as becoming “a necessary part of portfolio diversification,” particularly for those seeking exposure to new narratives in Web3 and decentralized finance.

Ethereum at the Center of Attention

Ethereum is once again leading the charge. Over the past month, ETH has jumped nearly 18%, compared to Bitcoin’s modest 5% drop. 

With spot Ethereum ETFs attracting more than $2.3 billion in inflows — including a record $1 billion in a single day — institutional confidence appears to be solidifying. Treasury holdings of ETH now exceed $16.5 billion, led by firms like BitMine and SharpLink.

On‑chain fundamentals reinforce this picture. The total value locked in Ethereum’s DeFi ecosystem is hovering around $96 billion, showing that the network remains a hub for real economic activity. 

Matt Cobb, digital asset strategist at JP Morgan, described Ethereum as “the gateway” for many investors transitioning from Bitcoin into other assets. 

He explained that ETH’s position as the foundation for smart contracts, stablecoins, and DeFi activity ensures it remains the first stop when capital begins rotating away from BTC.

The Altcoin Season Index: Still Neutral

A popular tool, the Altcoin Season Index, measures how many top altcoins outperform Bitcoin over a 90‑day period. A reading of 75 or higher typically signals that altseason has arrived. 

As of late August, the index sits near 45–50, placing the market firmly in neutral territory. While this indicates we aren’t yet in full altseason, the direction of movement has caught attention.

For now, trading volumes still concentrate heavily on Bitcoin and Ethereum, with only limited spillover to mid‑cap and smaller coins. Until broader capital rotation occurs, many analysts caution that altseason calls may be premature.

Institutional Capital: A Double‑Edged Sword

Institutional involvement has transformed the altcoin conversation. The launch of spot Bitcoin and Ethereum ETFs in 2024 opened the door for pension funds and banks to allocate billions. 

More than $65 billion has flowed into these products since their debut, the majority into Bitcoin. Still, a growing portion is finding its way to ETH and a select group of large‑cap altcoins such as Solana, Toncoin, and BNB.

According to Geoff Thielen, Head of Market Strategy at Matrixport, institutional investors are increasingly willing to view altcoins as “legitimate assets,” not just speculative plays. He pointed to rising demand for structured products and derivatives linked to Ethereum and Solana as evidence that altcoins are entering a new phase of maturity.

Thielen noted that the conversation among institutions has shifted from whether altcoins should be considered at all to how best to gain exposure without taking outsized risks. This shift could provide a more stable foundation for an extended altcoin season.

Startups are also feeling the effects. In regions struggling with inflation, such as Argentina, companies are adopting stablecoin‑based payrolls to protect workers from currency depreciation. This growing trend underscores the practical role of altcoins in real economies, though it may not translate into sweeping market rallies.

Oversupply and the Rise of Memecoins

A challenge for altseason believers is sheer token oversupply. Platforms such as Pump.Fun have enabled the creation of tens of thousands of new tokens per day, many of them memecoins with little fundamental value. By some counts, more than 12 million tokens have been added to the market in the past year alone.

Craig Cobb, the Grow Me Co founder, stated on X that this glut dilutes attention and liquidity. One trader compared the situation to the dot‑com bubble, warning that “not every ship will rise” this time. Instead, the proliferation of low‑quality projects increases the likelihood of sharp corrections and opportunities for short sellers.

A Selective, Narrative‑Driven Cycle

Experts like Bitfinex’s Jag Kooner increasingly believe that if an altseason emerges, it will be narrower and more selective. Sectors tied to specific narratives — artificial intelligence, real‑world assets, or decentralized physical infrastructure networks (DePIN) — may outperform, while weaker projects languish. 

Kooner noted that this cycle could be “more selective and narrative‑driven” rather than a blanket rally.

This reflects a maturing ecosystem. With more than 10,000 tradable tokens, investors are no longer indiscriminately buying every project. Instead, the market rewards those with visible traction, clear utility, and regulatory clarity.

Skeptics of Altseason

Not everyone believes altseason is imminent. Some researchers argue that retail investors remain largely sidelined, while institutions have strict mandates preventing them from diving into smaller, high‑risk coins. Without retail exuberance, the conditions for a broad altcoin surge may not materialize.

Others point out the absence of strong narratives comparable to past cycles. During the 2020–21 bull market, DeFi and NFTs created explosive demand for altcoins. In contrast, 2025 lacks a unifying story. 

As 10x Research’s Markus Thielen put it, there is currently “no narrative” compelling enough to spark widespread adoption beyond Bitcoin and Ethereum.

Unlocking schedules are another headwind. Roughly $59 billion worth of vested tokens are set to enter circulation this year, creating selling pressure that could cap upside potential.

The Role of Crypto ETFs

Bitfinex analysts recently suggested that a true altcoin season may not begin until more ETFs expand beyond Bitcoin and Ethereum. They argue that new products could create “sustained, price‑agnostic demand,” particularly if they allow exposure to second‑tier altcoins. Until then, they believe the environment will remain fragmented, with only select assets enjoying rallies.

Meanwhile, speculation is growing about which crypto ETFs might launch next. Applications for Solana and XRP trusts remain under SEC review, and some analysts even predict that an active memecoin ETF could appear as early as 2026. If such vehicles are approved, they could funnel institutional liquidity into corners of the market previously ignored.

Structural Headwinds in 2025

Despite excitement over Ethereum and the possibility of new ETFs, the broader altcoin market remains subdued. Many tokens are still down more than 90% from their all‑time highs, a stark contrast to Bitcoin’s recovery. 

Market capitalization has risen to $3.9 trillion, but net new capital since the start of the cycle is just $300 billion. With thousands of tokens competing for a limited pool of liquidity, most fail to gain traction.

This thinning of winners and losers has introduced a “musical chairs” dynamic. When liquidity dries up, underperforming projects may collapse entirely, echoing the shakeout of weak companies after the dot‑com bubble.

What Needs to Change

For altcoins to stage a true comeback, several factors must align:

• Liquidity Expansion: New capital must enter through ETFs, sovereign adoption, or infrastructure growth.
• Macro Stability: A shift back to risk‑on conditions could fuel appetite for higher‑beta assets.
• Real Usage: Projects with sustainable on‑chain revenue and growing user bases will stand out.
• Supply Controls: Token burns and buybacks may help address oversupply.
• Narrative Shifts: Breakthroughs in consumer applications or financial integrations could reignite retail enthusiasm.

Until then, investors may find greater success in a “barbell strategy” — holding a strong Bitcoin position while selectively allocating to promising altcoins.

A More Mature, Selective Market

So, is the altcoin season finally here? The evidence remains mixed. Bitcoin’s dominance is slipping, and Ethereum’s momentum is undeniable. Institutional capital is supporting a handful of large‑cap projects, while new use cases like crypto payroll are embedding altcoins into real economies. Yet, oversupply, muted retail participation, and the absence of a compelling narrative suggest this may not be the explosive, all‑encompassing rally of past cycles.

If an altseason emerges, it may be shorter, softer, and more selective, with winners defined by fundamentals and institutional legitimacy. Investors who remain vigilant, track market indicators, and focus on quality rather than hype are likely to be best positioned. Whether 2025 marks the long‑awaited altcoin season or just another stepping stone, one thing is certain: the crypto market is evolving, and adaptation is key.Altcoin Season 2025: Are We Finally There?

For years, the crypto community has been eagerly awaiting the arrival of the so‑called “altcoin season” — a period when alternative cryptocurrencies outperform Bitcoin. In 2025, the debate is alive again as Bitcoin’s dominance slips and Ethereum surges. But is this the real thing, or just another round of false alarms?

Bitcoin Dominance Under Pressure

Bitcoin’s market dominance has traditionally been the compass for crypto cycles. After holding above 66% as recently as June, Bitcoin’s share of the overall market has now fallen below 60% for the first time in half a year. Analysts suggest this isn’t a random wobble. 

The decline mirrors previous five‑wave patterns that marked transitions in market leadership. The implication is clear: capital is rotating away from Bitcoin, with altcoins absorbing more attention and inflows.

According to Stefan Burgherr, Head of Research at 21Shares, the shift away from Bitcoin dominance is becoming more apparent. He noted that investors are no longer treating BTC as the sole benchmark of growth. 

Instead, he described altcoins as becoming “a necessary part of portfolio diversification,” particularly for those seeking exposure to new narratives in Web3 and decentralized finance.

Ethereum at the Center of Attention

Ethereum is once again leading the charge. Over the past month, ETH has jumped nearly 18%, compared to Bitcoin’s modest 5% drop. 

With spot Ethereum ETFs attracting more than $2.3 billion in inflows — including a record $1 billion in a single day — institutional confidence appears to be solidifying. Treasury holdings of ETH now exceed $16.5 billion, led by firms like BitMine and SharpLink.

On‑chain fundamentals reinforce this picture. The total value locked in Ethereum’s DeFi ecosystem is hovering around $96 billion, showing that the network remains a hub for real economic activity. 

Matt Cobb, digital asset strategist at JP Morgan, described Ethereum as “the gateway” for many investors transitioning from Bitcoin into other assets. 

He explained that ETH’s position as the foundation for smart contracts, stablecoins, and DeFi activity ensures it remains the first stop when capital begins rotating away from BTC.

The Altcoin Season Index: Still Neutral

A popular tool, the Altcoin Season Index, measures how many top altcoins outperform Bitcoin over a 90‑day period. A reading of 75 or higher typically signals that altseason has arrived. 

As of late August, the index sits near 45–50, placing the market firmly in neutral territory. While this indicates we aren’t yet in full altseason, the direction of movement has caught attention.

For now, trading volumes still concentrate heavily on Bitcoin and Ethereum, with only limited spillover to mid‑cap and smaller coins. Until broader capital rotation occurs, many analysts caution that altseason calls may be premature.

Institutional Capital: A Double‑Edged Sword

Institutional involvement has transformed the altcoin conversation. The launch of spot Bitcoin and Ethereum ETFs in 2024 opened the door for pension funds and banks to allocate billions. 

More than $65 billion has flowed into these products since their debut, the majority into Bitcoin. Still, a growing portion is finding its way to ETH and a select group of large‑cap altcoins such as Solana, Toncoin, and BNB.

According to Geoff Thielen, Head of Market Strategy at Matrixport, institutional investors are increasingly willing to view altcoins as “legitimate assets,” not just speculative plays. He pointed to rising demand for structured products and derivatives linked to Ethereum and Solana as evidence that altcoins are entering a new phase of maturity.

Thielen noted that the conversation among institutions has shifted from whether altcoins should be considered at all to how best to gain exposure without taking outsized risks. This shift could provide a more stable foundation for an extended altcoin season.

Startups are also feeling the effects. In regions struggling with inflation, such as Argentina, companies are adopting stablecoin‑based payrolls to protect workers from currency depreciation. This growing trend underscores the practical role of altcoins in real economies, though it may not translate into sweeping market rallies.

Oversupply and the Rise of Memecoins

A challenge for altseason believers is sheer token oversupply. Platforms such as Pump.Fun have enabled the creation of tens of thousands of new tokens per day, many of them memecoins with little fundamental value. By some counts, more than 12 million tokens have been added to the market in the past year alone.

Craig Cobb, the Grow Me Co founder, stated on X that this glut dilutes attention and liquidity. One trader compared the situation to the dot‑com bubble, warning that “not every ship will rise” this time. Instead, the proliferation of low‑quality projects increases the likelihood of sharp corrections and opportunities for short sellers.

A Selective, Narrative‑Driven Cycle

Experts like Bitfinex’s Jag Kooner increasingly believe that if an altseason emerges, it will be narrower and more selective. Sectors tied to specific narratives — artificial intelligence, real‑world assets, or decentralized physical infrastructure networks (DePIN) — may outperform, while weaker projects languish. 

Kooner noted that this cycle could be “more selective and narrative‑driven” rather than a blanket rally.

This reflects a maturing ecosystem. With more than 10,000 tradable tokens, investors are no longer indiscriminately buying every project. Instead, the market rewards those with visible traction, clear utility, and regulatory clarity.

Skeptics of Altseason

Not everyone believes altseason is imminent. Some researchers argue that retail investors remain largely sidelined, while institutions have strict mandates preventing them from diving into smaller, high‑risk coins. Without retail exuberance, the conditions for a broad altcoin surge may not materialize.

Others point out the absence of strong narratives comparable to past cycles. During the 2020–21 bull market, DeFi and NFTs created explosive demand for altcoins. In contrast, 2025 lacks a unifying story. 

As 10x Research’s Markus Thielen put it, there is currently “no narrative” compelling enough to spark widespread adoption beyond Bitcoin and Ethereum.

Unlocking schedules are another headwind. Roughly $59 billion worth of vested tokens are set to enter circulation this year, creating selling pressure that could cap upside potential.

The Role of Crypto ETFs

Bitfinex analysts recently suggested that a true altcoin season may not begin until more ETFs expand beyond Bitcoin and Ethereum. They argue that new products could create “sustained, price‑agnostic demand,” particularly if they allow exposure to second‑tier altcoins. Until then, they believe the environment will remain fragmented, with only select assets enjoying rallies.

Meanwhile, speculation is growing about which crypto ETFs might launch next. Applications for Solana and XRP trusts remain under SEC review, and some analysts even predict that an active memecoin ETF could appear as early as 2026. If such vehicles are approved, they could funnel institutional liquidity into corners of the market previously ignored.

Structural Headwinds in 2025

Despite excitement over Ethereum and the possibility of new ETFs, the broader altcoin market remains subdued. Many tokens are still down more than 90% from their all‑time highs, a stark contrast to Bitcoin’s recovery. 

Market capitalization has risen to $3.9 trillion, but net new capital since the start of the cycle is just $300 billion. With thousands of tokens competing for a limited pool of liquidity, most fail to gain traction.

This thinning of winners and losers has introduced a “musical chairs” dynamic. When liquidity dries up, underperforming projects may collapse entirely, echoing the shakeout of weak companies after the dot‑com bubble.

What Needs to Change

For altcoins to stage a true comeback, several factors must align:

• Liquidity Expansion: New capital must enter through ETFs, sovereign adoption, or infrastructure growth.
• Macro Stability: A shift back to risk‑on conditions could fuel appetite for higher‑beta assets.
• Real Usage: Projects with sustainable on‑chain revenue and growing user bases will stand out.
• Supply Controls: Token burns and buybacks may help address oversupply.
• Narrative Shifts: Breakthroughs in consumer applications or financial integrations could reignite retail enthusiasm.

Until then, investors may find greater success in a “barbell strategy” — holding a strong Bitcoin position while selectively allocating to promising altcoins.

A More Mature, Selective Market

So, is the altcoin season finally here? The evidence remains mixed. Bitcoin’s dominance is slipping, and Ethereum’s momentum is undeniable. Institutional capital is supporting a handful of large‑cap projects, while new use cases like crypto payroll are embedding altcoins into real economies. Yet, oversupply, muted retail participation, and the absence of a compelling narrative suggest this may not be the explosive, all‑encompassing rally of past cycles.

If an altseason emerges, it may be shorter, softer, and more selective, with winners defined by fundamentals and institutional legitimacy. Investors who remain vigilant, track market indicators, and focus on quality rather than hype are likely to be best positioned. Whether 2025 marks the long‑awaited altcoin season or just another stepping stone, one thing is certain: the crypto market is evolving, and adaptation is key.