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Zafar Naik
Zafar Naik
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- Feb 06, 2025 06:24 UTC
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Why Is Altcoin Season Delayed Again? Ethereum Could Be to Blame
Capital is flowing into stablecoins, not altcoins, due to market uncertainty and Ethereum's weak performance.
Tether and USDC supplies have significantly increased, indicating a risk-off approach by investors.
Ethereum's underperformance is hindering altcoin growth, as it has historically acted as a catalyst for altcoin seasons.
The much-anticipated altcoin season still feels like a distant dream, and many crypto enthusiasts are left wondering: when will it finally arrive? Altcoin seasons typically kick off when investors start shifting capital from Bitcoin into top altcoins like Ethereum (ETH), sparking widespread market rallies. But right now, the signs are pointing in a different direction.
Ethereum’s underperformance and a sudden shift in market dynamics have left altcoins struggling. Could this be a sign of a longer wait?
Keep reading to find out why the altcoin season is on hold, and what could finally trigger the next rally.
Funds Move to Stablecoins, Not Altcoins
Crypto analyst Ali Martinez has pointed out a major shift in the market: instead of flowing into altcoins, capital is now moving into stablecoins. This suggests that investors are playing it safe and avoiding the higher risk of altcoins due to ongoing market uncertainty.
As a result, altcoins are struggling to gain any meaningful momentum.
Why Are Stablecoins on the Rise?
Since Donald Trump’s election win, the supply of stablecoins has surged. Tether’s (USDT) supply has increased by $20 billion, reaching $140 billion. Meanwhile, USD Coin (USDC) has grown by $17 billion to reach $52 billion. Tether has also become the third-largest buyer of U.S. Treasuries, investing a huge $113 billion in 2024 alone.
With the growth of stablecoin adoption, we could soon see more liquidity flow back into the crypto market. Additionally, crypto czar David Sacks has emphasized that stablecoins are becoming a key part of the U.S. economy. With a $227 billion market cap, stablecoins are expected to keep growing in the months ahead.
Ethereum’s Downward Slide
Ethereum has historically been the spark that ignites altcoin seasons. In previous bull runs, ETH led the way, bringing attention and capital to the broader altcoin market. But right now, Ethereum is struggling. Its price has remained flat, and traders are now focusing on other Layer 1 projects and speculative tokens instead.
Crypto trader Picolas Cage pointed out that altcoins won’t recover unless Ethereum sees a rebound. In past bull markets, ETH led trends like ICOs, DeFi Summer, and the NFT boom. Without a similar growth driver now, altcoins are stuck in a holding pattern.
When Will Altseason Return?
Global events have also played a role in slowing down the crypto market. A recent flash crash triggered by new tariffs from Donald Trump 
Donald Trump Donald Trump is an American former president politician, businessman, and media personality, who served as the 45th president of the U.S. between 2017 to 2021. Trump earned a Bachelor of science in economics from the University of Pennsylvania in 1968. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a family separation policy. Trump has remained a prominent figure in the Republican Party and is considered a likely candidate for the 2024 presidential election President led to a massive sell-off in stocks, commodities, and crypto. Altcoins were hit hardest, with the total market cap falling from $1.46 trillion at the end of January to $1 trillion by February 3 – wiping out $460 billion in value.
According to crypto analyst Rekt Capital, Bitcoin’s market dominance must exceed 70% before an altcoin season can begin.
While Bitcoin’s dominance is rising, it’s still not high enough. In past altcoin seasons, the shift has started once Bitcoin dominance hits 71%, followed by a pullback. Until then, the market remains in a holding pattern, with altcoins waiting for their moment to shine.
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The market may be quiet now, but when the tides shift, the next altcoin season could be just around the corner.
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