CryptoQuant CEO: The alt season has begun

CryptoQuant CEO Ki Young Ju tweeted that the alt season has begun. There is no direct BTC to altcoin rotation, but stablecoin holders favor altcoins. Altcoin trading volume is 2.7 times that of BTC. BTC dominance no longer determines the alt season, trading volume does. However, this is a very selective alt season.

Is the cottage season still far away?

Citi analysts said in a report that Ethereum may be a rotation target given that it is the only major cryptocurrency approved as the basis for a spot ETF (besides Bitcoin). Other cryptocurrencies have performed even better and their share of the overall cryptocurrency market capitalization is also growing.

Citigroup added that respondents to a recent survey believe altcoins will perform particularly well in 2025. “Other cryptocurrencies and altcoins have performed even more meaningfully, suggesting that some market participants expect an ‘alt season’ in 2025 following a strong year for Bitcoin,” the analysts said.

Citi analysts said that the new policy support will help consolidate the legitimacy of altcoins in the market and may push up prices; Bitcoin is classified as a commodity and already has traditional financial trading tools such as spot ETFs and futures; in contrast, the definition of other crypto assets is more uncertain and the range of investment options is more limited; compared with Bitcoin, further policy support will provide a huge boost to altcoins.

Matt Hougan, chief investment officer at Bitwise, also believes that on the one hand, institutional investors are very optimistic about the prospects of cryptocurrencies. Institutional funds are pouring into the crypto market at an unprecedented scale through exchange-traded open-end index funds (ETFs), and Washington has also transformed from one of the biggest threats to cryptocurrencies to one of the strongest supporters. However, retail investors are currently in despair. They seem to be living in another parallel reality.

But in the long run, he believes that the layout of altcoins is more solid than at any time in history. In the past four years, altcoins have largely been in a regulatory gray area, with the U.S. Securities and Exchange Commission (SEC) claiming that most altcoins are illegal securities issuances. This has hindered their real-world application and prevented large companies and outstanding developers from getting involved in this field.

Things are getting better. The United States has now made the development of stablecoins a national priority, which will support the growth of Ethereum and Solana. The world’s largest institutions are now starting to build in the crypto space, bringing DeFi applications to the masses.

Different opinions

Panews believes that the triggering of the alt season does not rely on quantitative easing (QE), and the alt season is usually triggered by the start of the Bitcoin bull market. The first step of capital flow is usually the influx of Bitcoin and major alts. Then, media hype attracts the attention of retail investors, who may start buying alts. At the same time, investors who have made profits in Bitcoin will turn their funds to the alt market in pursuit of higher returns. From historical data, this phenomenon usually occurs when Bitcoin breaks through a new high for the second time.

In addition, Baihua Blockchain believes that in this cycle, the trading pattern of the altcoin market largely reflects a mainstream view - "all projects are scams". In the past two rounds of crypto market cycles, people generally believed that "this technology represents the future". But in the current cycle, this belief has been greatly weakened or even destroyed, and many people no longer believe in the long-term prospects of the crypto industry. On the contrary, the view that "everything is a scam" has become one of the mainstream perceptions.

In addition, current innovation is more iterative, and the infrastructure is constantly being optimized, but there is no disruptive 0→1 breakthrough like when DeFi was born, and there is also a lack of major progress that is eye-catching.

However, Zhu Su, co-founder of Three Arrows Capital (3AC), posted on X that "it's time to go all-in on ETH". World Free Finance (WLFI) is also currently increasing its holdings of Ethereum. It is a decentralized financial platform supported by Donald Trump that aims to democratize financial access by using a dollar-based stablecoin and governance managed by its WLFI token. Therefore, we see that the copycat locomotive Ethereum is being taken seriously by everyone.

Final Thoughts

The altcoin market is undergoing an unprecedented transformation. With institutional investors entering the market, new policy support has brought more legitimacy and growth potential to altcoins. Although the market's views and beliefs on cryptocurrencies have changed, the future of altcoins is still promising.

We can foresee that as Ethereum and other major altcoins gain more support, market trading volume will continue to increase, driving altcoins into a new period of prosperity. The world's largest institutions are building in the crypto space and bringing Web3 to the masses, which will further consolidate the position of altcoins in the market.

The future altcoin season will no longer rely entirely on Bitcoin's performance, but will be driven by trading volume and policy support. Although there are fewer breakthrough innovations in the current market, the continuously optimized infrastructure and policy support will lay a solid foundation for the development of altcoins. We can expect that in the near future, altcoins will usher in a new peak in the cryptocurrency market.