Characteristics of the New Cycle in the Crypto Assets Market: The Dominance of Bitcoin Continues to Rise

The latest quarterly report shows that the current Crypto Assets market cycle is significantly different from history. Although Bitcoin prices have repeatedly set historical highs, it has not triggered a market off-season as usual. On the contrary, Bitcoin continues to maintain its dominant position.

In previous halving cycles, funds typically shifted from Bitcoin to other Crypto Assets as traders sought higher risk exposure. However, in this cycle, Bitcoin's dominance has not diminished but rather increased, while other Crypto Assets have performed relatively flat. This shift is mainly due to the increased influence of institutional investors. With the entrance of ETFs, corporate funds, and asset management institutions into the market, Bitcoin has become the preferred investment target for regulated investors.

The market for altcoins may be delayed.

Although there has not been a significant altcoin market in this cycle, the market is gradually adjusting to accommodate a more institutionalized capital rotation. Since April 2025, driven by a large influx of ETFs and improvements in the regulatory environment, Ethereum's performance has outperformed most other Crypto Assets, especially in terms of staking.

However, the overall performance of altcoins remains weak, and Ethereum's market share is also below the historical peak period of altcoin markets. This delay is mainly due to changes in the market participation structure, with institutional investors tending to prefer large-cap assets and long-term holdings. In the future, if a staking-based Ethereum ETF is approved, it could become a catalyst, marking a transition in the market towards a more selective and quality-focused rotation of altcoins.

Bitcoin's position remains difficult to shake.

Bitcoin's role in the Crypto Assets ecosystem is changing. Its dominance remains at a high level, reflecting its growing appeal as a macro asset for institutional investors. The launch of the Bitcoin spot ETF has brought in more stable long-term capital, reducing market volatility while curbing speculative funds flowing into other crypto assets.

Currently, Bitcoin's role as a cyclical factor triggering altcoin market trends has weakened, and it more often serves as a liquidity anchor. Its correlation with traditional risk assets has increased, indicating that Bitcoin's price movements are more influenced by the global macro environment rather than purely driven by the sentiment of the Crypto Assets market.

Potential Signals to Watch for Altcoin Market Trends

Investors can focus on the following key indicators to determine whether a broader market rotation and altcoin trend will occur:

1. The inflow of funds into Ethereum ETFs and the performance of potential future staking products are important signals of institutional investor sentiment.

2. Global liquidity indicators, central bank interest rate expectations, and stock market performance provide the macro backdrop for risk assets.

3. Internal indicators of the Crypto Assets market, such as the rise in Ethereum's market share, increased trading interest in altcoin derivatives, and the expansion of market breadth for medium-cap assets.

In addition, traders should closely monitor volatility distribution and changes in funding rates, as these indicators may change before funds shift towards high-risk altcoins.