Forbes: 2025 Shiba Inu Season Gold Rush Guide
Original Article Title: Altcoin Season 2025: A Crypto Bull Run Guide
Original Source: Forbes
Original Translation: Bitpush News
Bitcoin halving, new all-time high, and the arrival of altcoin season — is this the classic recipe for a bull market? Or perhaps not?
First, BTC halving reduces its issuance rate, leading to a supply shortage. Subsequently, BTC surges to a new all-time high, followed by the altcoin hype as investors seek higher returns, ushering in the altcoin season. Shortly after Bitcoin's most recent halving, it broke the $100,000 mark — a historic milestone. However, the altcoin market has not seen a surge yet.
Where is the usual rebound? Has the classic storyline been disrupted? The surge in institutional capital and liquidity tightening due to high interest rates, coupled with Trump's positive and bold view on cryptocurrency, have already established one thing: this cycle will be unlike any we have seen before.
What Makes This Cycle Different?
Every cycle has four stages: accumulation, uptrend, distribution, and downtrend. Although the mechanisms behind these stages are well-known, timing the market is one of the most recognized skills. You attempt to predict when we are entering a specific stage to formulate a trading strategy. However, despite cycles following predictable patterns, we also cannot forget the broader market context — cryptocurrency has undergone significant changes in the past year.
Institutional Capital
The increasing presence of institutional investors in the Bitcoin market has reshaped the dynamics of the Bitcoin market. With the emergence and growth of cryptocurrency ETFs, Bitcoin has become the world's seventh-largest asset, becoming a new choice for institutional investors. Increased participation of institutional investors usually brings greater price stability. However, for altcoins, this may not be good news. After all, volatility and major corrections can redirect capital flows back into altcoins. Reduced volatility means reduced potential returns flowing back into the altcoin market.
This year is a special one. The launch of a Bitcoin spot ETF has brought a significant influx of traditional financial capital into the cryptocurrency market. Institutional inflows into these ETFs have triggered a supply shock for Bitcoin, enhancing its dominance. The demand for Bitcoin triggered by the ETFs has a direct impact on Bitcoin's dominance, which currently stands at around 56%, an important metric often overlooked by novice traders. It measures BTC's market share relative to altcoins, providing insight into whether we are in a Bitcoin season (BTC performing well) or an altcoin season (altcoins performing well). Strong BTC dominance coupled with a stable Bitcoin price means what? Altcoin sell-off. And in this cycle, the Bitcoin spot ETF has extended Bitcoin's dominance. This new variable, absent in previous bull markets, will undoubtedly make the 2025 altcoin season unique.
Macro: Liquidity and Regulation
If you ask any CFO what the most important financial metric is, they will tell you it's liquidity.
In 2023 and 2024, U.S. rates rose to one of the highest levels in years. While it has dropped from 5.25% a year ago to 4.19% now, it's still a relatively attractive yield for risk-free assets. On the flip side, rate cuts often fuel a cryptocurrency bull market for one simple reason — they create a favorable environment for higher-risk assets to thrive. After all, a risk-free government bond with a yield of 0.11% in 2021 is as appealing as losing capital to inflation. Lower rates equal cheaper borrowing and higher liquidity, which in turn prompts investors to park funds where they can get a higher return. Where? Yes, you guessed it. Cryptocurrency.
Trump's reelection undoubtedly sent shockwaves through the crypto world. The "Bitcoin Bill" sparked intense debate in both crypto and non-crypto circles. If passed, the Senate legislation would require the Treasury and the Fed to purchase 200,000 bitcoins annually for five years, accumulating 1 million bitcoins. In other words, about 5% of the global supply. Undoubtedly, crypto-supportive regulation is a meaningful step towards widespread adoption of crypto assets, and Trump's stance has proven to be able to spark positive sentiment, as BTC hit an all-time high shortly after the future president confirmed the creation of the BTC Federal Reserve Plan.
With BTC maintaining its dominance, high rates, and U.S. support for crypto regulations, should we expect a full-blown altcoin supercycle by 2025? That's a billion-dollar question.
When Will the Season of Altcoins Come
If history has taught us anything, it's that the surge of altcoins usually follows a significant move in Bitcoin. However, estimating how significant these price fluctuations will be — or how soon altcoins will surge after Bitcoin hits an all-time high — is impossible.
David Siemer, CEO of Wave Digital Assets, said, "I don't think we're going to see a dramatic altcoin season like in 2021 anytime soon, meaning BTC's dominance will drop below 40%. But as BTC continues to rise, we will see significant gains in altcoin value."
Siemer then added, "To have an altcoin season relative to BTC like in 2021, the adoption and revenue capture of altcoins need to increase by several orders of magnitude," emphasizing that this could take at least 3 years. But once it starts, the altcoin season itself is easy to identify, as there are some quite bullish signals:
· Altcoin prices are experiencing rapid growth, outperforming Bitcoin, especially large-cap altcoins. This means that not only are altcoins as a whole on the rise, but their gains are larger than those of Bitcoin.
· Altcoin dominance is soaring, reminiscent of the altcoin season of May 2021. These tokens have claimed a dominant position in the market, with the total market capitalization of the top 100 altcoins reaching 1.3 times that of Bitcoin.
· FOMO-driven sentiment, high trading volumes, and risk-taking investors are intensifying buying pressure and price momentum.
Cane Island Digital Research shared insights in its "Altcoin Seasonality Proof" regarding the seasonal rebounds of altcoins, indicating that ETH is a representative of altcoins going through a bull market. Additionally, it mentioned the repeating pattern of altcoin seasonality from January to May.
Narrative Dominance
While the upcoming altcoin season may be vastly different from the traditional seasons we are accustomed to, certain sub-narratives have already carved out a space in the cryptocurrency realm. Following a staggering 24,908.4% surge in value of the VIRTUAL token (equivalent to a 249x increase), it is safe to say that we have reached a new level of narrative dominance.
Although memecoins may surpass real-world assets or fields like AI, the AI agent stands out and is often seen as a driver of the next supercycle. Artificial intelligence remains at the forefront, with the advancement of AI agents, the on-chain AI economy has captured a significant market share, projecting to peak at 50% in 2024 according to Kaito AI's data. Fueled by unprecedented demand for AI services, this trend is likely to continue into 2025.
The institutional adoption sparked by major firms like BlackRock has also influenced real-world assets and other fields, making tokenization a fundamental part of the crypto world. While much attention is focused on AI and AI agents, traditional finance is exploring tokenization as a viable business option, with major banks such as JPMorgan and Goldman Sachs attempting to disrupt the financial market.
How to Prepare for the Altcoin Season?
As we enter 2025, ahead of the altcoin season, here are a few key points to keep in mind.
Bitcoin dominance is a classic reference indicator, so make sure to use it wisely to time your trades. Websites like BlockchainCenter.net can help assess whether the market is currently in altcoin season or Bitcoin season. Some key points to note:
The cryptocurrency market is largely driven by emotion, so pay attention to regulatory measures, macroeconomic trends, or crypto-native narratives (DeFi, AI agents, meme coins).
Not all altcoins will follow Bitcoin's price dynamics. Historically, projects with strong fundamentals or alignment with emerging narratives (such as AI projects) have performed better. However, prioritize quality over quantity, focusing on projects with strong fundamentals, an active team, and ideally a product-market fit that can engage a large community.
Pullbacks are a healthy phenomenon. They indicate the market is consolidating, allowing investors to enter positions before the next uptrend. Altcoin seasons typically occur in the later stages of a bull market. Stay patient.
Conclusion
The cryptocurrency market is maturing. Each cycle is a stepping stone and should be seen as a learning experience. While meme coins are still reaping rewards, new narratives are becoming increasingly influential. But what's most interesting is that the current popular narratives, such as AI agents, are not just passing trends. Most importantly, compared to any previous bull market, we are now facing greater influence from macro factors and institutional adoption. Does this mean we should expect a different dynamic in altcoin season this time? To some extent, yes. We should not blindly follow the patterns of the past few years. The question is not whether altcoin season will occur, but when it will happen and how it will differ from the past few years.
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