Why has the alt season come so late?

Author: A Aldokali

Compilation: Plain Language Blockchain

For months, cryptocurrency traders have been anxiously refreshing price charts, anticipating the arrival of the "altcoin season," when altcoins are expected to soar significantly. However, despite bullish predictions and brief rises, the altcoin season has still not materialized.

Bitcoin continues to dominate the market, leaving altcoin enthusiasts wondering: why has the altcoin season been delayed? Will there still be an altcoin season?

01 The Iron Fist Control of Bitcoin: Dominance and Institutional Adoption

Bitcoin's dominance - its share of the total market capitalization of cryptocurrencies - has hovered around 60% between 2024 and 2025, a level not seen since the bull market of 2017. This dominance reflects the market's preference for Bitcoin, attributed to its stability and widespread adoption by institutions.

Institutional Interest: The Bitcoin ETFs approved at the end of 2023 and the beginning of 2024 attracted billions of dollars in inflows into BTC, making it a "safe-haven asset" in the crypto market. Large institutions like BlackRock and Fidelity prioritize Bitcoin, overlooking altcoins.

Halving Effect: The 2024 Bitcoin halving event reinforces its scarcity narrative, attracting funds that might have otherwise flowed into higher-risk altcoins.

As analyst Benjamin Cowen pointed out, "Altcoins typically start to rise only after Bitcoin completes its parabolic rise." Since BTC continues to hit new highs, investors have no reason to turn to altcoins.

02 Macroeconomic Headwinds: The Federal Reserve's Strict Control of Liquidity

The Federal Reserve's monetary policy has always been the invisible killer of the altcoin season. Unlike the bull market of 2020-2021 (driven by near-zero interest rates and quantitative easing), the period of 2024-2025 will be marked by quantitative tightening (QT) and high interest rates.

Liquidity Squeeze: Quantitative tightening has drained liquidity from financial markets and reduced risk appetite. As speculative assets, altcoins rely on excess capital; without liquidity, they can only stagnate.

Delay in Rate Cuts: Despite market rumors that the Federal Reserve may shift to a looser monetary policy, rate cuts are still a long way off. Both institutional and retail investors are hesitant to take risks in altcoins before borrowing costs decrease.

This macroeconomic backdrop stands in stark contrast to the previous season of altcoin liquidity, when Meme and DeFi tokens surged significantly.

03 Oversupply of Altcoins: Too Many Coins, Insufficient Demand

The crypto market is flooded with over 15,000 altcoins, but liquidity cannot keep up. New projects are launched every day, but the total capital pool remains fragmented, leading to diluted potential returns.

Capital Diversification: More tokens are competing for the same liquidity, making it difficult for even promising projects to gain attention.

Venture Capital Caution: Venture capital in crypto projects has decreased from $29.4 billion in 2022 to $7.1 billion in 2024, leading to a severe shortage of development funds for altcoins.

This oversupply has created a "crowded market" where only tokens with outstanding practicality or viral popularity can stand out—this is far removed from the ICO boom of 2017 or the NFT frenzy of 2021.

04 Retail Investors Absent

Altcoin season is usually driven by retail FOMO (fear of missing out). However, retail participation in 2025 is noticeably weaker compared to past cycles.

Social sentiment is low: Indicators tracking crypto-related social media activity show a lack of the frenzy seen during the 2021 Dogecoin or Shiba Inu craze.

Cautious Behavior: Retail investors who were hurt in the market crash of 2022 are now more inclined towards Bitcoin rather than altcoins. As one trader said: "When BTC has risen 150% this year, why buy Memes?"

Without the enthusiasm of retail investors, altcoins lack the fuel to ignite sustained growth.

05 Regulatory Uncertainty: A Double-Edged Sword

Regulatory clarity is crucial for altcoins, especially those classified as securities. Although the pro-crypto stance of the Trump administration has ignited optimism, progress remains slow.

ETF Delayed: The altcoin ETFs for Solana, XRP, and Dogecoin remain stuck in regulatory limbo. Analysts believe there is a 65-90% chance of approval, but the timeline is still unclear.

DeFi and Stablecoin Review: The regulatory ambiguity surrounding decentralized finance (DeFi) protocols and stablecoins has stifled innovation, causing institutional funds to shy away.

Uncertainty will continue to exist until regulatory agencies approve cryptocurrency ETFs or clarify the rules.

06 Historical Mode: Patience is a Virtue

The crypto market is cyclical, and altcoin seasons usually occur in the last year of Bitcoin's four-year cycle. While 2025 is considered the next altcoin season, delays are not without precedent.

2017 vs. 2021: Both altcoin seasons occurred after Bitcoin reached all-time highs and entered consolidation. If BTC stabilizes above $100,000, capital may eventually flow into altcoins.

ETH/BTC Ratio: Ethereum's poor performance against Bitcoin indicates that the altcoin season has not yet begun. Historically, Ethereum usually leads altcoins in price increases, but its ratio against BTC remains close to multi-year lows.

07 Summary

Altcoins have not disappeared; they are just waiting for the right conditions. Bitcoin's dominance, macroeconomic pressures, and regulatory hurdles have temporarily pressed the pause button on the altcoin frenzy. However, history shows that once BTC enters a stable period and liquidity returns, altcoins will have their moment.

Currently, investing patiently and selectively in projects with strong fundamentals — such as artificial intelligence, DeFi, or Layer-2 solutions — is key. As the saying in the crypto circle goes: "Time in the market beats timing the market."

Stay alert, act cautiously, and closely monitor Bitcoin's dominance. The clock for altcoin season is ticking—it's just a matter of time, not whether it will happen.

Source: Baihua Blockchain Original