The next altseason has begun, buoyed by stablecoin holders, according to Ki Young Ju, CEO of analytics service CryptoQuant.
Altcoin trading volume is now approximately 2.7 times higher than Bitcoin’s (BTC), Young Ju said in a Feb. 20 post on the X platform. He added that “BTC Dominance no longer defines alt season — trading volume does.”
Historically, altcoin seasons occur when traders rotate profits out of Bitcoin and into other cryptocurrencies. This time, according to Young Ju, there is “[n]o direct BTC-to-alt rotation, but stablecoin holders are favoring alts.”
However, the CEO cautioned that this is “a very selective alt season” where “[o]nly a few coins are pumping” due to a lack of “fresh liquidity” entering the crypto market.
As of Feb. 21, Bitcoin dominance stands at 58%, up from lows of 51.5% in December, according to data from CoinStats. This figure typically reverses during the altseason.
The price correlation between Bitcoin and altcoins is waning. Source: Ki Young Ju
Related: Solana sees 40% decline in user activity as memecoin rug pulls erode trust
Shifting market dynamics
Stablecoin market capitalizations increased sharply after Donald Trump’s presidential election win in the United States. The total stablecoin market capitalization is roughly $232 billion as of Feb. 21, according to CoinGecko.
Citi, an investment bank, expects continued adoption of stablecoins to propel digital asset performance in 2025, particularly for altcoins.
However, rug pulls and insider schemes involving Solana-based memecoins are driving investor outflows and a decline in capital inflows on the popular blockchain network, a potential impediment to an altcoin rally.
Meanwhile, Bitcoin’s ongoing institutional adoption is decoupling the digital currency from the broader crypto market, Young Ju said.
US Bitcoin exchange-traded funds (ETFs) broke $100 billion in Bitcoin holdings in November. Meanwhile, public companies have collectively bought more than $60 billion worth of Bitcoin, largely as an inflation hedge, according to BitcoinTreasuries.NET.
“Bitcoin has built its own paper-based Layer 2 ecosystem through ETFs, MSTR, funds, and more. In this paper-based L2 Bitcoin, bridging to other altcoins is impossible,” he said in a December X post.
As a result, “[o]nly a few [altcoins] are starting to show independent trends as they attract new liquidity,” Young Ju said.
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