• While $BTC continues to break new all-time highs (ATH) and is approaching $100,000—a historic psychological milestone for the crypto market—altcoins have been underperforming Bitcoin significantly, even looking rather lackluster.

  • Now, with each Bitcoin worth as much as a condominium, the Bitcoin game seems almost exclusively reserved for Wall Street giants like BlackRock and Elon Musk. As a result, most retail investors will turn to altcoins (lower market-cap tokens other than Bitcoin) to optimize their returns.

  • This has led many to doubt whether an altcoin season—where altcoins soar x5, x10, or even x20 like in previous cycles—will actually happen.

  • Such skepticism is understandable because not many investors have the patience and experience to foresee the macro trends in the market. Similarly, there was skepticism when Bitcoin hit $30,000 as to whether it could return to its 2021 ATH of $69,000. And when Bitcoin reached a new ATH in March 2024, there was significant doubt that it could climb to $100,000.

  • I’ve explained this numerous times to skeptics of Bitcoin, and I believe that’s no longer necessary. Instead, I’ll explain why there will always be an altcoin season when Bitcoin hits new ATHs:

    1) The Entry of New Capital:

    When Bitcoin reaches ATH, mainstream media and social media attention surge, driving not only increased capital into Bitcoin but also heightened interest in altcoins. This influx of new participants brings fresh capital into the market.


    2) Fear of Missing Out (FOMO):

    Retail investors often feel like they’ve “missed the boat” as Bitcoin’s price becomes too high compared to their financial capacity. This creates a psychological shift toward altcoins, which are perceived as offering higher returns (x2, x5, or even x10). Lower market-cap tokens often attract capital due to their affordability and the potential for higher gains.


    3) Portfolio Rebalancing:

    Institutional investors, professional traders, and asset management firms—essentially the whales and sharks of the market—adhere to fundamental investment principles like portfolio diversification. They allocate a fixed ratio among Bitcoin, altcoins, and stablecoins (or cash). As Bitcoin’s price rises, its weight in their portfolios exceeds planned allocations, prompting them to sell some Bitcoin to rebalance. This capital then flows into altcoins.

    4) The Crypto Community Is Invested in Bitcoin

    Most members of the crypto community, including investment funds, projects, exchanges, companies, and platforms, understand that Bitcoin is “digital gold.” Hence, Bitcoin comprises a significant share of their reserves. When Bitcoin’s value increases, these players gain additional resources to promote their projects and tokens. They can sell Bitcoin profits and “pump” their tokens, aiming to distribute them to the market at favorable prices when conditions are right.

    5) The “Money Flows from Large to Small” Effect

    As Bitcoin rises sharply and stabilizes near its new ATH, market capital tends to flow from larger assets (Bitcoin) to smaller ones (altcoins). This pattern of capital rotation has repeated in previous cycles.

    6) Leveraging Strategies

    Bitcoin is often used as a primary collateral asset on exchanges and DeFi platforms. When Bitcoin’s price rises, the value of collateral increases, enabling investors to borrow more funds. Investors typically use Bitcoin as collateral to borrow stablecoins, which they then use to purchase altcoins. This strategy allows them to maximize the market’s growth potential while retaining their Bitcoin holdings.

    7) Abundant Liquidity

    When Bitcoin reaches a new ATH, many investors are in profit, coupled with a positive market sentiment and fresh capital eager to enter the market. These factors create an environment of abundant liquidity, which is highly favorable for inflating altcoins. Since altcoins usually have smaller market caps, it becomes relatively easier and more feasible to drive their prices up by several multiples.

  • Conclusion

    With these 7 reasons in mind, from psychological factors to external circumstances, it’s clear that an altcoin season following a significant Bitcoin rally, especially when Bitcoin reaches a new ATH, is inevitable. There’s no reason to doubt the occurrence of an altcoin season. Its scale, however, will largely depend on Bitcoin’s performance and market capitalization growth. The stronger Bitcoin’s growth, the more spectacular the altcoin season will be.

    We should be glad the altcoin season hasn’t arrived yet rather than worrying or doubting it!


    #bitcoin

    #altcoinseason

    #BullRun🐂