Retail cryptocurrency investors who anticipated an “altcoin season” for the past two years may have missed out on approximately $800 billion in prospective profits by wagering against the dominance of Bitcoin.
A recent analysis by 10x Research indicates that alternative cryptocurrencies have significantly underperformed Bitcoin during this market cycle, representing one of the most considerable disparities since 2017.
This information emphasizes a considerable alteration in the market’s dynamics, which is increasingly influenced by institutional investments, Bitcoin ETFs, and a preference for lower-risk options, contrasting with the speculative trends that characterized earlier bull markets.
Retail Investors Await a Non-Existent “Alt Season”
Traditionally, an “altcoin season” refers to a period where smaller cryptocurrencies achieve notably higher returns than Bitcoin, drawing capital away from the primary cryptocurrency and yielding substantial short-term gains.
In previous cycles, notably in 2017 and 2021, profits from Bitcoin flowed into Ethereum, followed by mid-sized cryptocurrencies and meme tokens.
However, 10x Research has observed a reversal of this pattern in the current cycle. Instead of capital rotating into altcoins, liquidity has concentrated around Bitcoin.
According to the firm’s data, investors have significantly reallocated their funds toward Bitcoin-based products, moving away from tokens associated with greater risk.
The firm stated:
“In the last month, our altcoin strategy model has favored Bitcoin over altcoins, indicating a stabilization in Bitcoin’s dominance. This change follows a 75-day period when the model favored altcoins, coinciding with Ethereum’s surge, but this trend has clearly ended.”
Furthermore, 10X Research noted that South Korean retail traders, who were once major drivers of altcoin speculation, have also shifted away from this trading strategy.
Data from Messari indicates that Upbit, South Korea’s largest cryptocurrency exchange, has experienced a significant decline in trading volume this year as traders have turned to U.S.-listed crypto stocks, such as Coinbase and MicroStrategy.
10x Research contends that this shift has weakened both the liquidity and confidence surrounding altcoins.
Notably, previous reports by CryptoSlate support this argument, emphasizing how altcoins have not kept pace with Bitcoin’s growth.
The report indicates that Bitcoin’s market capitalization surpassed $2.3 trillion in early October, reaching a new all-time high of approximately $126,000. Conversely, the total market capitalization of altcoins (excluding stablecoins) has remained below its November 2021 peak of $1.6 trillion.
By mid-October, the total altcoin market cap (TOTAL2ES) had only reached $1.48 trillion, approximately $120 billion less than its previous high, even though Bitcoin had exceeded its own by 84%. This difference accounts for the “missed gain” figure of $800 billion reported by 10x Research.
10x Research stated:
“Liquidity, momentum, and confidence have all moved elsewhere, creating an unusually quiet altcoin market.”
Consequently, Coinperp’s Altcoin Season Index, which measures the number of top 100 tokens that outperform Bitcoin over a 90-day period, only briefly rose above 70 in early September – below the 75 threshold needed to define a genuine alt season – and has since fallen back to 13 as of the time of this report.
Altcoins Wane
According to Bitget CEO Gracy Chen, the issues extend beyond short-term market sentiment.
She mentioned a significant decrease in venture capital funding for early-stage Web3 projects, which has resulted in fewer new narratives and token launches in the sector.
Indeed, a report by Galaxy Research revealed that venture capital activity in the crypto space is markedly lower compared to previous bull markets. In fact, the second quarter of 2025 saw the second-lowest level of venture investment in crypto and blockchain startups since the fourth quarter of 2020.
Chen added that the recent market downturn on Oct. 11, which eliminated around $20 billion from leveraged crypto positions, “severely impacted altcoins.”
She added:
“Retail investors face a poor risk-reward situation when trading altcoins.”
Considering these factors, the Bitget CEO suggests a significant altcoin season “will likely not occur in 2025 or 2026.”
However, she mentioned potential exceptions for projects involving infrastructure tokens related to real-world assets (RWA), stablecoins, and payment systems.
Chen suggests that these “infrastructure plays,” while not likely to issue highly volatile native tokens, could be the foundation for the next phase of growth. Indeed, Ripple’s cross-border solutions, Circle’s USDC ecosystem, and platforms for tokenized treasuries are demonstrating that the emphasis is shifting from speculation to practical services.
Despite this, retail interest remains. Google Trends data reveals that global search interest for “altcoin” reached its highest level in five years this August, matching levels of excitement last observed during Ethereum’s rise in 2018.
How Institutions Are Changing the Rules
Unlike the retail-driven frenzy of 2021, the current market cycle has been driven by institutional capital.
According to 10x Research, approvals for spot Bitcoin ETFs, participation from corporate treasuries, and yield-bearing stablecoins have redefined what is considered “safe” exposure in the crypto market.
Notably, spot crypto ETFs have attracted record inflows of over $40 billion in new capital this year, significantly outperforming other markets.
As a result, retail traders pursuing quick returns from altcoins have found themselves on the sidelines. Thus, even small gains in assets like Solana or Avalanche have quickly faded due to shallow order books and a lack of fundamental catalysts.