Traders waiting for a stronger and broader altcoin rally may be in for a big disappointment.
According to Bitwise's Head of Alpha Strategy, Jeff Park, and Blockstream's founder, Adam Back, this sector could be affected by protocols jumping into the Bitcoin treasury frenzy. In a post on X, Park stated:
"Mediocre altcoins abandoning their own assets to build BTC treasury is not in my 2025 plan. The world is recovering."
The reason for such a statement is in response to the proposal from Cardano's founder, Charles Hoskinson, regarding swapping $100 million ADA for Bitcoin as part of a treasury diversification process.
Altcoin and Bitcoin
For Adam Back of Blockstream, Cardano's move will strengthen BTC and drive the collapse of the altcoin market.
"Not only is the altcoin season canceled, but the surrender of altcoins is inevitable. Insiders are selling off to buy Bitcoin to have their own slush fund," he said.
On average, the larger altcoin market has dropped 50% compared to BTC since the brief altcoin season in November last year.
For example, the chart below tracks the total crypto market excluding the top 10 assets compared to BTC or the altcoin/BTC ratio, which has decreased since 2021.
Despite the notable price increase at the end of 2023 and the end of 2024, this sector still struggles to surpass Bitcoin.
After the altcoin rally at the end of 2024, Bitcoin's dominance only increased further – a sign that most investors prefer BTC over altcoins.
Notably, BTC's dominance ratio decreased to 55%, but then surged to 63%. In other words, more than half of the market is focused on Bitcoin, compared to the rest of the crypto market.
However, it is worth noting that some selected altcoins have seen remarkable performance, despite BTC's rising dominance. In fact, the altcoin season index has remained below 30 since Q1, emphasizing that the first half of 2025 is Bitcoin's season.
Additionally, about 10 assets have outperformed BTC in terms of investor returns over the past 90 trading days. Leading the list is Hyperliquid (HYPE), which increased +200% compared to BTC's 22%. Aave (AAVE), Monero (XMR), Bittensor (TAO), and Pepe (PEPE) along with others also recorded relative strength compared to BTC.
Simply put, Bitcoin is strengthening against most altcoins, evidenced by BTC's rising dominance. However, there are some exceptions that have outperformed BTC by about 2-10 times in the past 90 days.
Therefore, despite the sluggish altcoin sector, there are still some that outperform BTC in terms of returns.