Author: Bybit Research

Key Highlights:

Our latest quarterly report shows a significant deviation from the historical cycles of the cryptocurrency market: Bitcoin continues to dominate, and despite multiple historical peaks, it has not triggered the traditional off-season.

In previous post-halving rebounds, funds typically rotated into other coins as traders sought higher Beta exposure. However, in the current cycle, BTC's dominance remains on the rise, while alternative coins struggle to achieve significant performance. This shift is primarily attributed to the growing influence of institutional investors. With the entry of ETFs, corporate funds, and asset managers into the space, Bitcoin has become the preferred tool for regulated exposure.

Is the Altcoin Season Coming? If so, it’s Delayed

Figure 1. ETH's share of the total market capitalization of non-stablecoin cryptocurrencies before and after historical halving events (excluding 2012). Source: CoinGecko, Block Scholes

While the altcoin season has not yet materialized in this cycle, the market is gradually adjusting for a more institutionalized rotation. Since April 2025, supported by a massive influx of ETFs and increasing regulatory transparency, Ethereum has outperformed most alternative coins, particularly in terms of staking.

However, the breadth of altcoins remains weak, and ETH's market share is still below the peak levels seen during historical altcoin seasons. The delayed rotation is attributed to structural changes in market participation, with institutions favoring large-cap assets and longer holding periods. The potential approval of a staking ETH ETF could act as a catalyst, marking a shift towards a more selective, quality-oriented altcoin season.

Despite Bitcoin's Ups and Downs, It Remains Unchallenged

Figure 2. BTC's dominance before and after historical halving events (excluding 2012). Source: CoinGecko, Block Scholes

Bitcoin's role in the cryptocurrency ecosystem is changing. Its dominance remains at a high level, reflecting its increasing appeal as a macro asset for institutional investors. The launch of BTC spot ETFs has brought in more stable long-term capital, reducing volatility and suppressing speculative inflows into alternative coins. BTC now plays a lesser role as a cyclical trigger for altcoin seasons and more as a cyclical trigger for liquidity anchoring. Its correlation with traditional risk assets has increased, indicating that Bitcoin's price is more aligned with the global macro environment compared to the native sentiment of cryptocurrencies.

If the Altcoin Season Hasn’t Arrived, When Can We Expect It?

Figure 3. From November 2023 to February 2025, the share of non-stablecoin cryptocurrency market capitalization represented by BTC (orange), ETH (purple), and all other cryptocurrencies (red), with non-stablecoin market capitalization shown on a logarithmic scale (white, right axis). Source: CoinGecko, Block Scholes

Investors should pay attention to several key indicators to anticipate alternative trading and broader market rotation:

• ETF inflows into ETH and any future products supporting staking are key signals of institutional sentiment.

• Global liquidity indicators, central bank interest rate expectations, and stock market performance provide a macro backdrop for risk behavior.

• The continuous rise of ETH's dominance in the cryptocurrency market, the expanding open interest in altcoin derivatives, and the broadening of mid-cap assets are all critical technical markers.

Traders should also monitor volatility dispersion and changes in funding rates, as these may precede capital shifts towards higher Beta alternative coins.

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