The current cycle is dominated by institutional capital, with Bitcoin ETFs emerging as the primary investment vehicle, suppressing altcoin performance.
Author: Bybit Research

Our latest quarterly report reveals a significant deviation from historical crypto market cycles: Bitcoin continues to dominate, and despite multiple all-time highs, it has not triggered the traditional altcoin season.

In previous post-halving rallies, capital typically rotated into altcoins as traders sought higher beta exposure. However, in this cycle, BTC’s dominance remains elevated, while altcoins struggle to gain significant traction. This shift is largely attributed to the growing influence of institutional investors. With ETFs, corporate treasuries, and asset managers entering the space, Bitcoin has become the preferred instrument for regulated exposure.

Figure 1. ETH’s Share of Non-Stablecoin Crypto Market Cap Around Halving Events (Excluding 2012)
Source: CoinGecko, Block Scholes

While the altcoin season has yet to materialize this cycle, market dynamics are gradually adjusting to enable a more institutionalized rotation. Since April 2025, Ethereum has outperformed most altcoins—particularly in staking—supported by ETF inflows and improving regulatory clarity.

However, altcoin breadth remains weak, and ETH’s market share still lags behind peak levels seen in past altcoin seasons. The delayed rotation stems from structural changes in market participation, with institutions favoring large-cap assets and longer holding periods. A potential approval of staked ETH ETFs could serve as a catalyst, marking a shift toward a more selective, quality-driven altcoin season.

Figure 2. BTC Dominance Around Halving Events (Excluding 2012)
Source: CoinGecko, Block Scholes

Bitcoin’s role in the crypto ecosystem is evolving. Its sustained high dominance reflects its growing appeal as a macro asset for institutional investors. The launch of BTC spot ETFs has introduced more stable, long-term capital, reducing volatility and dampening speculative flows into altcoins. BTC now acts less as a cyclical trigger for altcoin seasons and more as a liquidity anchor. Its increased correlation with traditional risk assets suggests Bitcoin’s price is now more aligned with the global macro environment than with crypto-native sentiment.

Figure 3. Non-Stablecoin Market Cap Share by BTC (Orange), ETH (Purple), and Other Cryptos (Red), Nov 2023–Feb 2025 (Log Scale, White, Right Axis)
Source: CoinGecko, Block Scholes

Traders should watch several key indicators for signs of altcoin rotation and broader market shifts:

1. ETF Flows: Inflows into ETH ETFs and any future staking-enabled products will be critical signals of institutional sentiment.

2. Macro Conditions: Global liquidity metrics, central bank rate expectations, and equity market performance provide context for risk appetite.

3. Crypto-Specific Metrics:

   • Rising ETH dominance.

   • Expanding open interest in altcoin derivatives.

   • Improving breadth in mid-cap assets.

4. Market Sentiment: Volatility dispersion and funding rate changes may precede capital rotation into higher-beta altcoins.

While the altcoin season may be delayed, the groundwork is being laid for a more institutional-driven rotation—one that prioritizes quality over speculative frenzy.

The current cycle is dominated by institutional capital, with Bitcoin ETFs emerging as the primary investment vehicle, suppressing altcoin performance.
Author: Bybit Research

Our latest quarterly report reveals a significant deviation from historical crypto market cycles: Bitcoin continues to dominate, and despite multiple all-time highs, it has not triggered the traditional altcoin season.

In previous post-halving rallies, capital typically rotated into altcoins as traders sought higher beta exposure. However, in this cycle, BTC’s dominance remains elevated, while altcoins struggle to gain significant traction. This shift is largely attributed to the growing influence of institutional investors. With ETFs, corporate treasuries, and asset managers entering the space, Bitcoin has become the preferred instrument for regulated exposure.

Figure 1. ETH’s Share of Non-Stablecoin Crypto Market Cap Around Halving Events (Excluding 2012)
Source: CoinGecko, Block Scholes

While the altcoin season has yet to materialize this cycle, market dynamics are gradually adjusting to enable a more institutionalized rotation. Since April 2025, Ethereum has outperformed most altcoins—particularly in staking—supported by ETF inflows and improving regulatory clarity.

However, altcoin breadth remains weak, and ETH’s market share still lags behind peak levels seen in past altcoin seasons. The delayed rotation stems from structural changes in market participation, with institutions favoring large-cap assets and longer holding periods. A potential approval of staked ETH ETFs could serve as a catalyst, marking a shift toward a more selective, quality-driven altcoin season.

Figure 2. BTC Dominance Around Halving Events (Excluding 2012)
Source: CoinGecko, Block Scholes

Bitcoin’s role in the crypto ecosystem is evolving. Its sustained high dominance reflects its growing appeal as a macro asset for institutional investors. The launch of BTC spot ETFs has introduced more stable, long-term capital, reducing volatility and dampening speculative flows into altcoins. BTC now acts less as a cyclical trigger for altcoin seasons and more as a liquidity anchor. Its increased correlation with traditional risk assets suggests Bitcoin’s price is now more aligned with the global macro environment than with crypto-native sentiment.

Figure 3. Non-Stablecoin Market Cap Share by BTC (Orange), ETH (Purple), and Other Cryptos (Red), Nov 2023–Feb 2025 (Log Scale, White, Right Axis)
Source: CoinGecko, Block Scholes

Traders should watch several key indicators for signs of altcoin rotation and broader market shifts:

1. ETF Flows: Inflows into ETH ETFs and any future staking-enabled products will be critical signals of institutional sentiment.

2. Macro Conditions: Global liquidity metrics, central bank rate expectations, and equity market performance provide context for risk appetite.

3. Crypto-Specific Metrics:

   • Rising ETH dominance.

   • Expanding open interest in altcoin derivatives.

   • Improving breadth in mid-cap assets.

4. Market Sentiment: Volatility dispersion and funding rate changes may precede capital rotation into higher-beta altcoins.

While the altcoin season may be delayed, the groundwork is being laid for a more institutional-driven rotation—one that prioritizes quality over speculative frenzy.