"Altseason," a term familiar to many crypto traders, refers to periods when altcoins significantly outperform major cryptocurrencies like Bitcoin and Ethereum.

In the ever-evolving landscape of cryptocurrency, "altseason" represents a pivotal phenomenon where altcoins significantly outperform major cryptocurrencies like Bitcoin and Ethereum. This article delves into the historical patterns of altseason, exploring its implications for investors and the broader market dynamics. By analyzing previous cycles, we uncover the factors that typically trigger these explosive periods of growth, as well as the current market conditions that may signal the next altseason. Understanding these nuances is essential for both seasoned traders and newcomers seeking to navigate the complexities of crypto investing.

Understanding Altseason: What It Is and Why It Matters

"Altseason," a term familiar to many crypto traders, refers to periods when 

 significantly outperform major cryptocurrencies like Bitcoin and Ethereum. Historically, these phases have been characterized by capital rotation from Bitcoin into smaller, riskier projects, often leading to explosive growth in altcoin prices. This phenomenon has been evident in the past three major bull runs, notably in 2017 and 2021, when altcoins surged in value after Bitcoin reached new all-time highs (ATHs).

Bitcoin’s price movements have been cyclical since its inception in 2009. By analyzing historical price data, we can identify distinct periods of boom, bust and recovery. Notably, the two most recent bull runs have witnessed pronounced altseason events, whereby altcoins recorded extraordinary gains, often multiplying their market caps significantly.

For instance, during previous altseasons, the total market capitalization of altcoins surged between 6x and 7x. This explosive growth not only provided immense profit opportunities for traders, but also underscored the 

 inherent in the cryptocurrency space. However, one must also recognize that altseason often precedes the end of a bull run, as profit taking from large-cap tokens leads to a market correction.

Despite the historical significance of altseason, the current cycle appears markedly different. Bitcoin has continued to reach new highs while maintaining a strong market dominance, contrary to the typical pattern in which 

 declines during altseason. This deviation raises critical questions about the nature of the current market, and whether a traditional altseason is imminent.

The Current Landscape: Indicators and Influences

Several factors contribute to the unique dynamics of the current crypto market. First, it’s informative to underscore the importance of Bitcoin’s halving events, which historically precede significant market capitalization and dominance shifts. In previous cycles, Bitcoin's dominance tended to decline approximately 230 days post-halving, leading to a capital rotation into altcoins. However, the recent halving in April 2024 didn’t trigger the expected decline in Bitcoin dominance, suggesting a potential structural change in market behavior.

Moreover, the performance of Ethereum (ETH) relative to Bitcoin has also shifted. Historically, Ethereum served as a primary beneficiary during altseason, often experiencing substantial gains as traders rotated out of Bitcoin. However, since 2022, Ethereum has underperformed not only Bitcoin but also several competing "Ethereum Killers," such as Solana (SOL) and Sui (SUI. This relative underperformance has raised doubts about Ethereum's capacity to lead the market into a new altseason.

 has further complicated the landscape. While the introduction of these ETFs has driven Bitcoin’s price to new heights, it’s also resulted in a capital flow that remains largely focused on Bitcoin and Ethereum. Many institutional investors appear hesitant to rotate their capital into smaller, more speculative altcoins, opting instead to remain in regulated ETF products.

Last but not least, there’s been a significant increase in 

 supply, which has risen by 66% since the start of 2024. This indicates that while institutional activity may explain some market movements, retail engagement remains robust. 

 (CEXs) recorded their largest trade volumes in Q4 2024, suggesting that retail traders are actively participating in the market, potentially looking for altcoin opportunities as liquidity increases.

What Lies Ahead: Potential Scenarios for Altseason

Given the current market dynamics, traders are left to ponder whether an altseason is on the horizon and what form it might take. The accompanying report presents several scenarios that could influence the emergence and nature of the next altseason:

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Bybit x Block Scholes Institution Report: Altcoin Rotation — Why Altseason Hasn’t Come This Time?

Feb 10, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — Mixed Job Reports Rattle Market

The recent Bureau of Labor Statistics report indicates that U.S. job growth is slowing, yet remains healthy. Nonfarm payrolls grew by 143,000 last month, with upward revisions for November and December 2024, as they added 100,000 jobs. The unemployment rate has dipped to 4.0%, demonstrating a robust labor market, although the annual revisions suggest job gains were softer than initially reported, averaging 166,000 per month in 2024.

Simultaneously, inflation expectations are rising, driven partly by tariffs proposed by U.S. president Trump. Data from the University of Michigan reveals consumers anticipate price increases, which may complicate the Federal Reserve's decision-making. Fed officials have indicated they aren’t in a rush to lower interest rates further after a series of cuts last year, suggesting they prefer to observe how the economy reacts to potential policy changes.

The job growth in January 2025 was primarily concentrated in health care, retail and government sectors, while mining and manufacturing faced declines. Severe weather conditions contributed to nearly 600,000 people missing work, the highest impact in four years.

Despite these fluctuations, hourly wages increased by 0.5% month-over-month and 4.1% year-over-year, reflecting pressure on wages amid labor market tightness. The participation rate in the labor force stands at 62.6%, with notable contributions from foreign-born workers, highlighting immigration as a critical factor in employment growth.

As the Fed assesses the stability of the labor market, upcoming directives from the Trump administration, including potential immigration restrictions, could impact future job growth and economic conditions. While the landscape shows signs of moderation, it remains resilient, with cautious optimism surrounding economic stability.

Weekly Crypto Highlight — Crypto IPOs Coming

As reported, Gemini, the cryptocurrency firm founded by the Winklevoss twins, is potentially exploring an 

 (IPO) this year. The company is currently discussing the listing with potential advisers, although no final decisions have yet been made.

Bullish Global, a crypto exchange operator whose backers include billionaire Peter Thiel, is considering an IPO as soon as this year.

The interest in going public comes amid a surge of crypto firms accelerating their IPO plans since President Trump's election, as he has shown support for the industry. The Winklevoss twins, known for their legal battles with Facebook's Mark Zuckerberg, previously donated Bitcoin exceeding the campaign contribution limit to Trump, later receiving a refund for the excess.

Gemini employs over 500 people across several global locations, including New York, Seattle and London. Recently, the firm agreed to pay $5 million to settle a Commodity Futures Trading Commission (CFTC) lawsuit alleging it misled regulators while trying to launch the first U.S.-regulated Bitcoin futures contract. Additionally, Gemini has committed to returning at least $1.1 billion to customers affected by the Genesis Global Capital bankruptcy as part of a settlement with New York regulators relating to its Gemini Earn program.

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Weekly Institutional Insights: Mixed U.S. Job Reports; Crypto IPOs Coming

In our latest Learn 101 livestream session, crypto experts shared insights on Bybit Copy Trading Gold&FX.

 crypto on Bybit, you can now use copy trading for gold and forex. These markets are unique, and 

 provides an opportunity to learn effective strategies in these markets. In this nineteenth episode of our 

, we uncover Copy Trading Gold&FX Mastery.

 provides a recap of our Learn 101 livestreams, offering you comprehensive expertise and insights from leading figures in the crypto industry in case you miss the livestream.

Joining the livestream on Feb 6, 2025 were two distinguished guests: Argiris Sotirakis, professional trader and founder of 

, and Eric Li, Financial Product Manager at Bybit. Under the moderation of Sabrina Chua, Crypto Evangelist and SEO Editor at Bybit, this episode explores Copy Trading Gold&FX Mastery.

Copy Trading 101 — Is It Really That Easy?

Copy trading offers a unique opportunity for investors to potentially outperform the market without dedicating countless hours to analyzing charts. Eric Li, an expert in the field, explains that copy trading involves mirroring the trades of seasoned professionals. 

During his presentation in this Learn 101 livestream, he shares his screen to showcase Bybit’s 

 platforms. For investors looking to diversify beyond crypto, 

 allows you to follow traders specializing in non-crypto assets like gold and forex. To access any of these features, users must first create a separate Copy Trading account on Bybit.

One standout feature of Bybit’s platform is its high-water mark system, which ensures that profits are shared fairly based on individual investments. This transparent approach aligns the interests of both the Master Traders and their Followers.

Argiris emphasizes that copy traders should experience results similar to those of their chosen Master Traders, provided they mirror trades simultaneously. However, he advises against putting all your eggs in one basket. “Diversification,” he says, “is key to minimizing risk and exposure to losses.”

Unlike platforms that rely on fiat currency, Bybit’s Copy Trading Gold&FX uses 

 (USDT). Eric emphasizes that this simplifies transactions and makes it easier for users to quickly follow multiple traders. Moreover, using USDT supports seamless integration with other Bybit features, offering more flexibility for your assets.

When it comes to selecting a trader to follow, Argiris Sotirakis cautions against relying solely on win rates. “A high win rate can be misleading,” he notes. Instead, he recommends evaluating a trader’s performance over time to understand how their strategies perform under different market conditions. He views copy trading as a long-term strategy, pointing out that it may take more than a month to see meaningful results — especially since various strategies thrive in different environments, such as trending markets versus sideways markets.

Eric Li further explains that Bybit offers tools to help users explore various strategy types employed by trading leaders. There are four primary strategy categories, each one focusing on distinct metrics and trading styles. For beginning traders, there’s even a strategy specifically designed to ease them into the world of copy trading. Additionally, traders can search for leaders based on the market they operate in, whether crypto, gold or forex.

One common misconception about copy trading is the perceived loss of control over your assets. Eric Li addresses this concern by highlighting several 

 tools available to users. For instance, copy traders can set custom limits, adjust take-profit levels and even pause or stop copying a trader at any time. “You still have full control over your assets,” Li reassures, “from selecting the right leader to fine-tuning your risk management settings.”

Gold & Forex Trading: The Secret Sauce Pros Don’t Share

Gold is widely regarded as a safe-haven asset, while forex is globally the largest and most liquid market. But many traders still wonder how to profit from the two. According to Argiris, success in these markets hinges on volatility and smart use of 

. Leverage amplifies profits, but managing it wisely is key to minimizing risk.

Recently, gold’s price has seen substantial growth, offering more opportunities for traders. While it’s a less volatile asset than cryptocurrency, leveraging gold can turn small price movements into significant gains. Sotirakis suggests that balancing leverage between crypto and gold helps reduce overall risk. Forex, on the other hand, is far more volatile, and the way leverage is used directly impacts risk exposure. He notes that forex trading can be more stressful, especially for 

Choosing the right strategy is crucial. With a solid 

 ratio, even small market moves can lead to profits. Many smart money strategies from crypto trading also apply to gold and forex, making it easier for traders to diversify across markets.

To help traders get started, Eric Li demonstrates Bybit’s Gold&FX Trading platform, highlighting its 

. This risk-free tool allows traders to practice strategies without using real money, making it ideal for learning during volatile market conditions. Sotirakis also advises using demo trading to test strategies, especially when markets are unstable. If losses pile up, it’s often a sign that your leverage is too high and needs adjustment.

The minimum investment to join Bybit Copy Trading Gold&FX is 100 USDT, though some Master Traders may require a higher amount. Choosing a Master Trader whose trading style aligns with your risk tolerance is essential.

Bybit Copy Trading Gold&FX Fiesta Time! How to Join & Win Big

Looking to dive into Bybit Copy Trading Gold&FX? What better way to start than with the 

, featuring a substantial 130,000 USDT prize pool! But that’s not all — you can also unlock an additional 5,000 USDT in rewards through the 

According to Sotirakis, events like the Copy Trading Gold&FX Fiesta are perfect for those who want to start trading without spending hours analyzing the markets. Moreover, as Li points out, you can copy trade up to 10,000 USDT per 

, giving you the flexibility to maximize your potential rewards.

This Learn 101 livestream session delivers valuable insights about Copy Trading Gold&FX Mastery, showcasing how copy trading simplifies the process of learning from seasoned experts. With Bybit’s demo function, you can practice copy trading strategies risk-free, allowing you to gain confidence without any financial exposure. Getting started is easy — just 

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Learn Live ICYMI: Trade Gold&FX Like a Pro

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BTC Spot ETFs saw a net inflow of $203.8M from Feb 3-7, with GBTC outflows of $14.7M and non-GBTC inflows of $218.5M. Overall, cumulative GBTC outflows stand at $21.91B, while non-GBTC inflows total $62.61B, resulting in a net inflow of $40.71B.

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Crypto Insights

Institutions still favor Bitcoin over Ether, even though the latter is likely getting a green light from the SEC for its Spot ETFs. 

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Bybit Data: Institutions Continue to Favor Bitcoin

Following the approval of Bitcoin Spot ETFs on January 10, 2024, Bitcoin’s price saw a 46% increase in February 2024 and peaked in mid-March with an all-time high of $73.7K. Despite the pullback in April and rebound in May, institutional holdings of Bitcoin continued to increase persistently throughout the half-year period. 

On the other hand, Ether’s position by institution saw a surprising decrease in May 2024, dropping from 10.8% on April 30, 2024, to 9.9% on May 31. Institutions have been acting as the smart money this time, with their Ether positions increasing in April as the market lost faith in the SEC’s ETF approval, and reducing in the wake of the approval.

In short, institutions still favor Bitcoin over Ether, even though the latter is likely getting a green light from the SEC for its Spot ETFs. The reasons behind this are likely a combination of TradFi’s accumulation of Bitcoin and the subdued attraction of Ether Spot ETFs.

Impact of TradFi’s Accumulation of Bitcoin

BTC Positions From Top Hedge Funds Are Quite Small

Following Bitcoin Spot ETF approvals in January 2023, the 13F reports for Q1 2024 are the first of their kind to be released that cover the position change for traditional asset managers. 

It’s surprising that over half of the top 25 hedge funds invested in Bitcoin Spot ETFs in the first quarter of 2024. 

Top Hedge Funds’ Bitcoin Position % as AUM. Source: Bybit

While Bitcoin wasn’t dominant, its presence in the portfolios of major hedge funds is still significant. For example, at Millennium Management, Bitcoin Spot ETFs, including IBIT and FBTC, account for the 18th-largest position in the firm's portfolio, comprising over 0.3% of its total assets under management (AUM).

This suggests that even traditional, non-crypto-focused hedge funds are starting to view Bitcoin as an attractive investment. Known for their flexibility and embrace of volatility, hedge funds may be drawn to Bitcoin due to its potential for outsized returns as compared to more traditional asset classes.

Prior to the recent disclosure of these 13F filings, crypto-native hedge funds had been the primary institutional buyers of Bitcoin. However, the fact that mainstream, non-crypto hedge funds are now accumulating Bitcoin positions speaks to the growing market optimism around Bitcoin Spot ETFs.

These ETFs provide established asset managers with regulated investment vehicles to gain exposure to Bitcoin, which offers unique investment characteristics, such as its limited supply and lack of correlation with other asset types. As such, Bitcoin is clearly gaining recognition among a wider range of institutional investors — even if it remains a relatively small part of their overall portfolios for now.

Once Traditional Asset Classes Are Starting to Invest in Bitcoin — And It Won't Be a One-off Event

It's unlikely that investors have already allocated their full targeted exposure to Bitcoin in the first quarter of 2024. The true extent of their positions will likely become clearer when the next round of 13F filings is released in mid-August.

Traditional hedge funds, in particular, probably haven’t invested their entire desired Bitcoin allocation so far this year. This is especially true given that Bitcoin has continued to set new all-time highs, making current investment costs less appealing from a trading perspective.

Instead, the Bitcoin positions we've seen reported so far in Q1 2024 are likely just initial stake-building by these institutional players. Hedge funds, with their typical 5-year investment horizons, are usually more focused on buying low and selling high to maximize returns; they aren’t the 

ers that some other crypto investors have become. In particular, the lowest Bitcoin price point observed so far in Q1 2024 has only been around $58,000. This relatively mild drawdown may not have provided a sufficiently attractive entry point for these sophisticated investors to deploy their full intended allocations.

We'll likely get a better sense of hedge funds' true Bitcoin exposures and strategies when the next round of regulatory filings is disclosed in mid August. The current data only provides a partial glimpse into institutional crypto adoption trends.

When it comes to Bitcoin Spot ETF investments, we believe pension funds stand out as some of the most impressive institutional players. As long-term, risk-averse investors, pension funds are poised to be the true HODLers in this space.

Based on the latest 13F filings, Wisconsin Investment Board appears to be one of the few pension funds that’s been allocated to Bitcoin Spot ETFs so far. This makes sense, as pension funds generally have much longer investment horizons as compared to more active traders, such as hedge funds.

Similar to the way that hedge funds are approaching Bitcoin, we don't believe Wisconsin's investment in the Bitcoin Spot ETF is a one-off. Just as Warren Buffett gradually built up Berkshire Hathaway's position in Apple over 2016 and 2017, we expect pension funds to increase their Bitcoin exposure methodically over time.

Another potentially significant source of long-term Bitcoin investment could come from corporate America. While early movers like MicroStrategy and Tesla have already allocated corporate treasury funds to Bitcoin, we may see more firms follow suit and use Bitcoin Spot ETFs as a way to hold the cryptocurrency.

 cash balance to direct Bitcoin holdings, rather than through an ETF. However, holding Bitcoin via a Spot ETF could be an easier option for many corporations looking to reduce custody and counterparty risks.

Cash held by Corporate America (Feb 2024). Sources: Harvard Business Review, Bybit

The data presented in the table above suggests that if corporate America were to allocate just 5% of its aggregate cash reserves into Bitcoin, that would be equivalent to 25.5% of Bitcoin's total market cap. This highlights the sheer scale of the potential demand that could be unleashed if more major corporations start treating Bitcoin as a treasury reserve asset, in a similar fashion to early movers like MicroStrategy and Tesla.

Will Bitcoin Continue to Outperform Ether?

Bitcoin Dominance Halts Since 19b-4 Approval of Ether Spot ETFs

The ETHBTC ratio has been in a downtrend since September 2023, likely due to anticipation of Bitcoin Spot ETF approvals. It briefly bounced above 0.05 in January after the BTC ETF launch, as investors betted on an upcoming Ether Spot ETF.

However, the ratio has since continued falling, only recently bottoming out as Ether Spot ETFs near approval. At 0.053, the current ETHBTC level remains well below historical averages, indicating Bitcoin's outperformance.

Ether Spot ETFs Are Unlikely to Repeat Bitcoin Spot ETFs’ Success

Approval of 19b-4 documents by the SEC was an initial step toward the eventual approval of Ether Spot ETFs. The market expects the SEC will need to sign off on the registration statements, known as S-1s, submitted by the fund issuers, likely sometime this summer.

The key question is whether we'll see another rally in Ether and other cryptocurrencies after the expected ETF approval in July 2024.

In the lead-up to the SEC's green light, Ether jumped from $3,000 to $3,700 — a 20% increase as compared to just an 11% rise in Bitcoin over the same period. This narrowed the performance gap between the two largest cryptocurrencies.

In our view, the market has largely priced in the approval of an Ether Spot ETF, as there are no major uncertainties surrounding this imminent event. Compared to Bitcoin's gains since Q4 2023, Ether has only about 30% room to catch up.

However, the SEC's specific classification of Ether as a commodity or security in its official ETF approval could still fuel another rally, as the market may then anticipate approval of similar ETFs for Solana, XRP or other altcoins.

It's also worth noting approved Ether Spot ETFs will likely lack a staking feature, per the revised application forms. This may drive some traditional financial institutions to consider holding Ether directly through regulated custodians, rather than a Spot ETF.

In our view, both Bitcoin and Ether will continue to see price appreciation as more crypto ETFs launch, with the broader crypto market likely remaining highly correlated.

 from Bybit Institutional suggests that Bitcoin and Ether are the mainstay assets in institutional portfolios. Therefore, the slight outperformance of Bitcoin against Ether may not make a huge difference to the overall returns of these diversified crypto holdings.

Looking ahead, Bitcoin may likely continue to be the preferred choice for traditional finance (TradFi) institutions newly entering the crypto market, given its status as 

In contrast, Ether's positioning as the "app store" of the crypto ecosystem may not be as unique an attribute for these TradFi players. Many Web 2.0 companies have stronger fundamentals than those of applications built on Ethereum, which also faces intensifying competition from other Layer 1 protocols.

Bitcoin Bull Rally Persists, Likely Due to Institutional Accumulation; Bitcoin Might Outperform Ether Near-Term

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