1. The shift in the driving logic of the altcoin season
1. Trading volume replaces Bitcoin market share as the core indicator
Traditional altcoin seasons usually accompany a decline in Bitcoin's market share. However, recent market data shows that Bitcoin's dominance remains stable at over 60%^3, while altcoin trading volume has reached 2.7 times that of Bitcoin (some data sources indicate 2.1 times^1). This indicates a fundamental change in the flow of funds: stablecoin holders are bypassing Bitcoin and directly flooding into the altcoin market, creating a funding pool independent of BTC^1^2. This kind of 'airdrop' liquidity may stem from institutional investors quickly positioning themselves through compliant channels (like stablecoins), rather than a rotation led by retail investors.
2. Policy easing and institutional entry reshape market structure
The U.S. has prioritized the development of stablecoins as a national priority and is accelerating the compliance processes for ecosystems like Ethereum and Solana^4. Meanwhile, potential approval of BlackRock's Ethereum ETF and the WLFI platform heavily invested in ETH, supported by Trump, show that institutional funds are strategically positioning themselves through policy 'clarity' in the racing track^4. Citibank predicts that by 2025, policy support will provide legitimacy to altcoins, promoting their integration with traditional financial instruments^2.
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2. Specific manifestations of 'selective prosperity'
1. Significant differentiation in the market
Funds are not rising uniformly but are concentrated in areas with practical application scenarios such as AI + blockchain (e.g., Fetch.ai), RWA (real-world assets), and cross-chain technology^4. For example, the total locked value (TVL) in the Ethereum ecosystem's DeFi has surpassed $200 billion, and L2 scaling solutions (such as Arbitrum L3) have spurred a surge in on-chain activities^4. In contrast, altcoins lacking a narrative remain in a sluggish state.
2. Polarization between leading projects and Meme coins
ETH has performed outstandingly as the 'altcoin locomotive,' with a weekly increase of 2.05%, surpassing BTC's 1.2%^3, and institutions like Three Arrows Capital continue to increase their holdings^2^4. While Meme coins (like BONK, Trump Coin) have surged in the short term due to celebrity effects, over 70% of these projects have crashed from their peaks, exhibiting high-risk characteristics^4.
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3. Controversies and risk warnings
1. The division in market perception
Institutions and retail investors have starkly different positions on altcoins: institutions are seeing an average daily inflow of $250 million through ETFs^4, while retail investors remain trapped in the pessimistic sentiment that 'all projects are scams'^2^4. This cognitive dissonance could lead to increased market volatility, especially during periods of policy reversals (such as the SEC delaying approval for BlackRock's ETF), where retail investors are likely to become 'victims of a stampede'^4.
2. Concerns over the failure of historical patterns
Traditional altcoin seasons rely on Bitcoin bull markets to drive fund rotations, but the current market is more driven by policy and technological iterations^2^4. Panews points out that if Bitcoin fails to break new highs, the sustainability of the independent altcoin rally is questionable^2.
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4. Conclusions and strategic recommendations
In summary, this round of altcoin season has begun but is showing a high degree of selectivity. Its core characteristics include:
- Funding side: Stablecoins are directly injected, replacing BTC rotations, with institutions leading liquidity^1^4;
- Asset side: Compliant tracks (ETH, RWA) and technology innovation projects (AI + blockchain) are the primary beneficiaries^4;
- Risk factors: High vigilance is needed regarding the Meme coin bubble, regulatory reversals, and security incidents^4.
Advice for investors:
1. Stay closely aligned with policy and institutional movements, prioritizing investments in ETF-related assets (like ETH) and compliant tracks;
2. Avoid blindly chasing non-mainstream coins; projects with practical use cases should be selected through fundamental analysis.
3. Dynamic assessment of market signals. If Bitcoin's dominance unexpectedly plummets, it may trigger a broader altcoin rally^3.
Ultimately, this market phase is both a milestone in the institutional compliance process and potentially a key window for retail cognitive upgrades—only by stepping outside the 'shitcoin' mindset and viewing technological innovation from a VC perspective can structural opportunities be grasped^4.