Bitcoin continues to lead the cryptocurrency market, with institutional demand showing little sign of slowing — a factor that may be keeping altseason at bay.
According to a quarterly report from Bybit and Block Scholes, released on Aug. 8, Bitcoin’s share of the total non-stablecoin crypto market cap is still climbing steadily. This trend contrasts with past cycles, where BTC dominance typically peaked before a significant capital shift into altcoins.
Historically, that rotation tended to occur about 230 days after the halving. In this cycle, however, that milestone passed in December 2024 without the sharp drop in dominance that has traditionally marked the start of altseason.
A Transformation in the Crypto Market Structure
Traditionally, crypto markets have moved in familiar cycles: Bitcoin climbs to record highs, investors take profits, and capital flows into Ethereum and smaller altcoins, triggering broad-based rallies. In the current cycle, however, BTC has set multiple all-time highs without igniting sustained altcoin outperformance.
A key reason may be the evolving investor landscape. Institutional participants — from corporate treasuries to pension funds — have been steadily accumulating Bitcoin via spot exchange-traded funds and direct holdings. These “sticky” investors typically hold for the long term, which dampens volatility and limits the capital rotation that once powered altcoin booms.
With Bitcoin up about 79% over the past year, compared to the S&P 500’s 16%, there’s little motivation for investors to take on the greater risk that comes with altcoins.
Ethereum’s Role in the Ongoing Waiting Game
Ethereum has shown signs of leadership, outperforming Bitcoin since April with gains of nearly 100% compared to BTC’s 40%. This momentum has been fueled by the May Pectra upgrade, clearer U.S. staking regulations, and increasing inflows into ETH spot ETFs — which, on several occasions in July, even surpassed BTC ETF inflows.
However, ETH’s surge has yet to spark a broader shift in market dominance. The report notes that the long-anticipated rotation could finally occur if institutional capital continues moving from BTC ETFs into ETH ETFs. Additional tailwinds — such as the U.S. regulatory drive for tokenization and the potential launch of staking-enabled ETFs — could further tip the balance.
For now, derivatives markets reflect bullish sentiment toward both BTC and ETH, but not at the euphoric levels that have preceded major altcoin rallies in past cycles. Without extreme positioning or a significant drop in Bitcoin dominance, the “next” altseason remains more of a potential scenario than a certainty.
