Recent significant growth in altcoins has led Coinbase to believe that market conditions indicate a potential shift towards cryptocurrencies beyond Bitcoin in the future.
Coinbase Research Director David Duong stated in the monthly outlook report, "Current market conditions suggest that as we approach September, a full-fledged altcoin season may occur."
Many traders and market observers also foresee the arrival of the altcoin season. Coinbase defines the altcoin season as a period when at least 75% of the top 50 altcoins by market capitalization have outperformed Bitcoin in the past 90 days.
Duong added that retail capital remains abundant in money market funds, and the Federal Reserve's easing policies could lead to increased retail participation in the near to medium term.
The U.S. Consumer Price Index for July shows an annual inflation rate of 2.7%, which has increased the likelihood of a rate cut by the Federal Reserve in September to 92% in the futures market.
A lower interest rate environment may attract new market capital, acting as a catalyst for high-risk assets such as altcoins.
Decline in Bitcoin's dominance.
Another reason for the upcoming altcoin season is the decline in Bitcoin's market dominance. Bitcoin's market dominance has dropped from over 65% in May 2025 to about 59% in August 2025, indicating early signs of capital rotation to altcoins.
Altcoin season index rises.
The altcoin season index is also rising, but has not yet reached the historical 75 that marks an altcoin season, while the market capitalization of altcoins has increased by over 50% since early July.
Institutional interest in ETH drives the altcoin season.
Duong stated that the current momentum is driven by narratives around digital asset custody and stablecoins, and the discrepancy between the altcoin index and total market capitalization reflects increased institutional interest in Ethereum.
"As the market capitalization of altcoins rises and early positive signals emerge in the altcoin season index, we believe the market is preparing for a mature altcoin season in September."
"Three key conditions must align for an altcoin season: supportive macro environment, decline in BTC dominance, and a strong new narrative," said Joanna Liang, founding partner of Singapore venture capital firm Jsquare.
