Why has the alt season arrived late?

Author: A Aldokali

Compilation: Vernacular Blockchain

For months, cryptocurrency traders have been anxiously refreshing price charts, anticipating the arrival of the "altcoin season," during which altcoins are expected to surge significantly. However, despite bullish predictions and brief increases, the altcoin season has yet to materialize.

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 Bitcoin's Ironclad Control: 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 2017 bull market. This dominance reflects the market's preference for Bitcoin, attributed to its stability and widespread adoption by institutions.

Institutional Attention: Bitcoin ETFs approved at the end of 2023 and early 2024 have attracted billions of dollars in inflows to 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 flowed into higher-risk altcoins.

As analyst Benjamin Cowen pointed out, "Altcoins usually start to rise only after Bitcoin has completed its parabolic rise." Since BTC continues to set 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 is marked by quantitative tightening (QT) and high interest rates.

Liquidity tightening: 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.

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

This macroeconomic backdrop stands in stark contrast to the liquidity surge during the previous altcoin season, when Meme and DeFi tokens saw significant spikes.

03 Oversupply of altcoins: too many coins, insufficient demand

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

Capital dispersion: More tokens compete for the same liquidity, making it difficult for even promising projects to gain attention.

Venture capital caution: Investment 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 utility or viral popularity can stand out – a far cry from the ICO craze of 2017 or the NFT frenzy of 2021.

04 Retail investors absent

The altcoin season is usually driven by retail FOMO (Fear of Missing Out). However, retail participation in 2025 is significantly 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 Meme?"

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

05 Regulatory Uncertainty: A Double-Edged Sword

Regulatory clarity is crucial for altcoins, especially those classified as securities. Despite the Trump administration's pro-crypto stance igniting optimism, progress remains slow.

ETF Delay: The altcoin ETFs for Solana, XRP, and Dogecoin remain mired in regulatory challenges. Analysts believe they have a 65-90% chance of approval, but the timeline is still unclear.

DeFi and Stablecoin Review: Regulatory ambiguity surrounding decentralized finance (DeFi) protocols and stablecoins stifles innovation and deters institutional investment.

Uncertainty will continue to exist until regulators approve altcoin ETFs or clarify the rules.

06 Historical Mode: Patience is a Virtue

The crypto market is cyclical, and altcoin seasons typically 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 times of altcoin season occurred after Bitcoin reached a historical high and entered consolidation. If BTC stabilizes above $100,000, capital may eventually flow into altcoins.

ETH/BTC Ratio: The poor performance of Ethereum against Bitcoin indicates that the altcoin season has not yet begun. Historically, Ethereum has typically led the altcoins upward, 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, it is key to invest patiently and selectively in projects with strong fundamentals – such as artificial intelligence, DeFi, or Layer-2 solutions. As the saying in the crypto community goes: "Time in the market beats timing the market."

Stay alert, act cautiously, and keep a close eye on Bitcoin's dominance. The clock for altcoin season is ticking—it's just a matter of time, not if it will happen.