Will this round of ETH increase bring about an altcoin season?

Key Point: The possibility is low, and a pessimistic attitude is maintained.

The reasons are as follows:

Different driving forces for ETH's increase: This round of ETH breaking through $4000 is mainly driven by spot ETF funds (secondary market trading volume has surged, and primary market purchasing power is strong), rather than improvements in the fundamentals or demand growth of the cryptocurrency native ecosystem. There has been no substantial change in ETH itself or its narrative.

Historical lessons: In March 2024 (when BTC hit a new high) and at the end of 2024 (expectations of Trump winning), ETH also briefly surged to $4100. The market anticipated an altcoin season, but ultimately it did not sustain or was much smaller in scale than in 2021, with many altcoins hitting their yearly highs during these two periods.

Lack of 'spillover effect':

BTC ETF funds do not flow into altcoins: BTC spot ETF investors are mostly long-term holders, and even if they take profits, very little money flows into the altcoin market.

Macro environment analogy (key argument): The current environment is similar to small-cap stocks in the US being heavily shorted (short positions have reached the highest level since 2022). The reasons are economic concerns, high interest rates leading to tight liquidity, and investors' risk preferences tightening, with funds concentrating on defensively strong and high-growth leading assets (such as the US stock 'Seven Sisters', AI stocks, or BTC in cryptocurrencies), rather than broadly benefiting small-cap stocks/altcoins.

Attractiveness of US Treasuries: Higher US Treasury yields have also diverted risk capital.

Conclusion: Although the rise in ETH may attract some funds to speculate on the rotation of the altcoin sector, in the current macro environment of tight liquidity and low risk appetite (with monetary policy not having substantially shifted towards easing), the ETH increase driven by external ETF funds is unlikely to generate sufficient and sustained spillover capital to support a large-scale, genuine altcoin season. The rise of altcoins is more likely to be 'a flash in the pan'.

The above views are for reference only.