Why Has the Altcoin Season Arrived Late? A Deep Analysis of the Underlying Reasons
Compared to the last cycle, the characteristics of capital flowing into Bitcoin have quietly changed.
The current rise in Bitcoin prices is mainly driven by strong demand from institutional investors and spot ETF.
Institutional investors and ETF buyers are significantly different from ordinary users of cryptocurrency exchanges, as they do not intend to shift assets from Bitcoin to altcoins.
Moreover, since their operational activities are mostly conducted outside of cryptocurrency exchanges, the rotation of assets is essentially difficult to implement.
Although institutional investors may allocate some funds to major altcoins through ETFs or other investment tools, the development of those smaller altcoins still highly relies on the purchasing behavior of cryptocurrency exchange users.
For altcoins to reach historical peak market value levels, there is an urgent need for large-scale new capital inflows into cryptocurrency exchanges.
However, the current situation of altcoin market value being lower than previous historical peaks highlights that the new liquidity from new exchange users has significantly decreased.
If the FOMO (fear of missing out) sentiment among retail investors in Bitcoin can be reignited, the activity level of exchange users is expected to increase, which could lay a solid foundation for the arrival of the altcoin season.
However, regarding the future growth trend of Bitcoin, it is expected that the main driving forces will come from ETFs, institutions, and possibly even government levels, rather than retail traders in cryptocurrency exchanges.
Therefore, altcoins should focus on developing unique independent strategies to attract new capital inflows, rather than merely relying on the development momentum of Bitcoin to propel themselves forward.
