In 2025, will the crypto market still be able to wait for alt season?

##Introduction

In recent years, discussions about "Altseason" have been frequent in the cryptocurrency market. As an important complement to the Bitcoin bull market, the performance of altcoins usually sees a surge towards the end of the bull market. However, the crypto market in 2025 presents a different picture: even though Bitcoin (BTC) continues to set new historical highs, the performance of altcoins appears to be lacking. Investors can't help but wonder: will Altseason really come? If not, how will the market evolve?

##Suppression of Bitcoin's Dominance

The market dominance of Bitcoin is one of the key factors delaying the arrival of the altcoin season. According to data, as of May 2025, Bitcoin's dominance remains above 54%. Historical experience shows that funds only begin to flow into Ethereum (ETH) and other mainstream altcoins when Bitcoin's dominance falls below 50%. However, at present, Bitcoin's strong position has not weakened; rather, it has further solidified due to the preference of institutional investors.

Since the approval of the Bitcoin ETF at the end of 2023, massive funds have flowed into BTC, making it a safe-haven asset in the crypto market, while altcoins have been marginalized. Meanwhile, the Bitcoin halving effect in 2024 has reinforced the narrative of scarcity, attracting more funds into BTC. Analysts point out that "altcoins typically begin to rise only after Bitcoin has completed its parabolic rise." Therefore, in an environment where Bitcoin continues to set new highs, investors lack the motivation to turn to altcoins.

It is worth noting that the performance of mainstream altcoins such as Ethereum has also failed to break free from the weak trend. Data shows that the price ratio of Ethereum to Bitcoin (ETH/BTC) is close to multi-year lows, indicating that even large-cap altcoins have not been able to attract sufficient capital inflow.

##Macroeconomics and Liquidity Dilemma

The changes in the global macroeconomic environment have had a profound impact on the performance of altcoins. The quantitative tightening (QT) policies and high interest rate environment of 2024-2025 have significantly reduced market liquidity. In contrast, the bull market of 2020-2021 occurred against a backdrop of loose monetary policy, where the influx of capital drove explosive growth in DeFi and meme tokens. However, in the current high interest rate context, speculative assets such as altcoins find it difficult to attract capital.

At the same time, the market capitalization share of stablecoins continues to rise, reflecting a comprehensive contraction in market risk appetite. Data shows that the market capitalization of stablecoins accounts for 18% of the total cryptocurrency market capitalization, reaching an all-time high. This indicates that investors are more inclined to choose stable assets with long-term value rather than high-risk altcoins.

In addition, the absence of retail investors has weakened the market. Compared to the frenetic mood of the DOGE and SHIB boom in 2021, the social mood in 2025 is much colder. Retail investors have become more cautious after the market crash of 2022 and are more inclined to hold on to stable assets such as Bitcoin. Without the impetus of FOMO (fear of missing out) sentiment, it is difficult for the altcoin market to form a sustained upward momentum.

##Narrative Fatigue and Market Differentiation

Another challenge in the altcoin market is the disconnection of narratives and the excessive fragmentation of the market. Although new concepts such as AI and RWA (Real World Assets) are gradually emerging, user penetration is far lower than during the DeFi boom in 2021. This indicates that the emerging narratives have not been able to attract sufficient attention and funding. At the same time, over 15,000 altcoins are competing for limited liquidity, leading to a dilution of market resources.

This decentralized market structure means that only a few projects with strong fundamentals or viral growth potential can stand out. For example, Solana (SOL) has drawn attention due to its efficient blockchain performance and ecosystem support. ARK Invest has recently significantly increased its holdings in Solana-related ETFs, further strengthening market confidence in its future potential. However, this differentiation also means that most altcoins struggle to gain sufficient funding support.

At the same time, regulatory uncertainty has further exacerbated market uncertainty. Although the successful launch of the Bitcoin ETF has injected confidence into the market, the approval process for altcoin ETFs has been slow. In addition, scrutiny of decentralized finance (DeFi) protocols and stablecoins has stifled innovation, making institutional funds hesitant.

Although the arrival of altcoin season seems far away, it has not completely disappeared. Historical experience shows that when the price of Bitcoin enters a consolidation phase, funds often flow into the altcoin market. However, the upcoming altcoin season may focus more on projects with practical applications and strong fundamentals, rather than purely relying on speculative hype.

For investors, patience and selective investing will be key. In the current environment, focusing on Layer-2 solutions, AI-driven tokens, and staking tokens with stable cash flow (such as ETH and SOL) may be a more prudent strategy. Additionally, closely monitoring changes in Bitcoin's dominance, inflows into Ethereum, and the recovery of market sentiment will help capture opportunities for the next round of altcoin rallies.

As the saying goes in the crypto community: "Time in the market beats timing the market." In the fluctuations of market cycles, finding and sticking to value may be the best strategy for navigating through bull and bear markets. The clock for altcoin season may be ticking, but its shape and breakout point will depend on the interplay of multiple factors.

Author: Orisi.T, Gate.io Researcher *This article only represents the author's views and does not constitute any trading advice. Investment carries risks, and decisions should be made cautiously. *This content is original and the copyright belongs to Gate.io. If you need to reprint, please indicate the author and source; otherwise, legal responsibility will be pursued.