Most analysts were skeptical of altcoins in the first half of this year. In general, the market believed that Bitcoin was on the way to replace most coins in investors’ portfolios, and that a true altcoin season could never start again.
Sure, there were strong moves in the altcoin space. However, these moves did not change the big picture: BTC dominance, which shows Bitcoin market cap as a percentage of total crypto market cap, continued to rise month after month.
BTC dominance continued to increase until the beginning of July. Suddenly, altcoins gained steam and BTC dominance fell from 65% to 61%. Why did it happen and what’s next for altcoins?
Bitcoin’s new highs triggered a wave of investors’ interest towards crypto markets. In addition to BTC, investors were also interested in altcoins, which have lagged the world’s main cryptocurrency in the first half of this year.
Public companies started buying ETH, which served as an important bullish catalyst for the whole altcoin market. Such companies replicated Michael Saylor’s strategy of regular crypto purchases, but bought ETH instead of BTC.
These firms saw that the market of companies that regularly add Bitcoin to their balance sheet has become saturated and decided to stand out by choosing ETH as the target for regular purchases.
The “crypto week” in the U.S. has also boosted crypto markets. Investors bet that favorable regulatory changes would increase demand for both BTC and altcoins.
ETH, which is the world’s second biggest cryptocurrency by market cap, soared by roughly 50% since the start of July. Other altcoins enjoyed the so-called “sympathy rally”.
The key question is whether the altcoin season has really begun and altcoins are ready to outperform BTC in the upcoming months.
It should be noted that analysts have different views on what should be considered a true altcoin season. Let’s take a look at one example, an Altcoin Season Index from CoinMarketCap. The Index indicates that the market is stuck halfway between the Bitcoin season and the altcoin season after the recent rally in altcoins.
Currently, the Index settled near the 50 point mark, while its annual minimum (which marked the maximum relative strength of Bitcoin) reached 12 points on April 16, 2025.
The annual maximum of the Altcoin Season Index was reached on December 4, 2024 at 87 points. The current value of the Index is far below this value, which indicates that altcoins have significant potential for further growth.
In the short term, crypto market dynamics will depend on global risk appetite. The situation is favorable as investors do not want to keep money in fiat currencies and search for assets to buy, be it crypto, gold, or U.S. tech stocks. If global markets successfully pass through Trump’s tariff deadline (August 1), crypto will have a good chance to continue the rally.