CryptoQuant CEO explains altseason delay
Institutional capital drives Bitcoin surge, leaving altcoins in limbo
The cryptocurrency market is abuzz with discussions about the much-anticipated altcoin season, which has yet to materialize in the current cycle.
While Bitcoin (BTC) has soared on the back of institutional interest and spot ETF demand, the altcoin market remains subdued, leaving analysts and industry insiders to dissect the factors behind this phenomenon, reports BeInCrypto.
Institutional Capital Driving Bitcoin, Not Altcoins
Ki Young Ju, CEO of CryptoQuant, argues that the current Bitcoin rally is distinct from previous cycles due to a significant shift in capital flow dynamics. Institutional investors and ETF buyers, rather than retail traders on exchanges, are now the primary drivers of Bitcoin’s growth.
“These institutional investors and ETF buyers have no intention of rotating their assets from Bitcoin to altcoins,” Ki Young Ju noted in a detailed thread on X (formerly Twitter). He emphasized that institutional players typically operate outside crypto exchanges, limiting the liquidity that smaller altcoins rely upon.
For altcoins to achieve new all-time highs, Ki Young Ju suggests that fresh capital must flow into crypto exchanges. So far, this trend is not evident, with smaller altcoins particularly dependent on retail traders for their liquidity. He predicts that while an altseason is likely, it will be selective, favoring major altcoins over minor ones.
“Altseason will come, but it’ll be selective. Not every altcoin will hit its previous ATH,” Ki Young Ju concluded.
Differing Perspectives: Is Altseason Already Here?
Not everyone agrees with CryptoQuant's analysis. CryptoVizArt, a senior analyst at Glassnode, believes that altseason is already underway, citing explosive growth in active addresses on Solana (SOL), which has reached 18.6 million daily—nearly 40 times that of Ethereum.
“Retail has already chosen where to gamble in this cycle,” CryptoVizArt remarked, pointing to the popularity of meme coins and Solana-based projects as evidence that a selective altseason is in progress.
Meanwhile, Crypto Feras, another prominent analyst, offers a more historical perspective. They argue that altcoin rallies typically occur later in Bitcoin’s cycle.
“In 2020, altcoins were crushed during Bitcoin’s glorious run in H2, only to rally later,” Feras stated. However, the sheer volume of altcoins today may dilute capital inflows, making the current cycle’s altseason less pronounced than in previous years.
Key Trends and Insights
Selective Altseason: While smaller altcoins struggle, major players like Solana have shown impressive growth. Solana’s rise in active addresses and retail popularity may signal the start of a targeted altseason.Institutional Focus on Bitcoin: Institutional investors driving Bitcoin’s surge are unlikely to rotate into altcoins, especially smaller ones, which remain reliant on retail liquidity.Historical Patterns: Previous cycles suggest that altcoins could rally later, especially as Bitcoin stabilizes or peaks. However, the sheer number of altcoins in the market may dilute their impact.
Conclusion
The delayed altcoin season underscores a complex interplay of institutional capital flows, retail behavior, and market conditions. While some analysts see signs of selective altcoin rallies, others believe a broader altseason may require a surge in retail-driven capital. Regardless, the landscape is evolving, with major altcoins like Solana already capturing significant attention. As the market matures, altcoins will need independent strategies to attract and sustain investor interest.
Recently we wrote, that the cryptocurrency market witnessed a notable shift as the Altcoin Season Index rose by 10 points overnight, reaching 59%.
