Altcoins may not experience a significant rally until more crypto ETFs launch, providing investors with exposure further down the risk curve, according to Bitfinex analysts. This perspective comes as market participants eagerly await an "altseason," especially with Bitcoin dominance recently dipping 6% over the past month. Currently, Bitcoin dominance stands at 58.58%.
Bitfinex analysts stated in a market report on Monday that they do not anticipate a "rising tide lifts all boats" environment until later in the year. This expectation is tied to the anticipation of inflows into Bitcoin products regaining momentum and the introduction of new investment vehicles for altcoins. The analysts believe that these products are likely to generate sustained, price-agnostic demand, creating the conditions for a broader re-rating across the digital asset complex.
The current crypto market has a "muted trajectory," reflecting a softer appetite for risk at this stage of the cycle, according to Bitfinex analysts. While capital inflows remain positive, the trajectory indicates a more cautious investor base, contrasting with the aggressive demand that characterized previous all-time high surges.
Other industry experts have presented differing views. For example, Coinbase Institutional's global head of research, David Duong, recently suggested that current market conditions indicate a potential shift toward a full-scale altcoin season as September approaches.
The industry is currently speculating on which crypto ETFs might launch next, especially with spot Bitcoin ETFs having traded for over 19 months since their debut in January 2024, and spot Ether ETFs for nearly 13 months since their July 2024 launch. The U.S. Securities and Exchange Commission (SEC) recently delayed approval decisions on several applications.
The Altcoin Season Index currently reads a score of 46 out of 100. Historically, altseason has been signaled by rotations in the altcoin market capitalization. Lower timeframe volatility is expected to increase as retail participation grows, which could further fuel altcoin momentum. However, caution is advised, as extreme funding rates often precede sharp corrections.
