Altcoin Season 2025
Bitcoin Dominance Top Formation Signals Altcoin Season
As we move into 2025, several macroeconomic factors suggest Bitcoin’s market share may decline. What’s causing this shift, and how can investors prepare to profit?
Let’s break it down.
Four Factors That Favor Bitcoin Dominance Dropping in 2025 (image by author)
Key Takeaways
Bitcoin dominance (BTC’s market share) likely to drop in 2025 due to macro shiftsCentral Bank Digital Currencies (CBDCs) will pull institutional money from BTCInstitutional investors are increasingly spreading funds across multiple cryptocurrenciesEvolving regulations favor compliance-ready altcoins over BitcoinTech innovations like DeFi and Web3 create real-world use cases for non-Bitcoin cryptosDiversification across multiple crypto assets helps protect against BTC dominance shiftsPortfolio rebalancing should happen gradually to manage tax implications
➤ Understanding Bitcoin Dominance
Have you ever wondered what people mean when they talk about “Bitcoin dominance”?
It’s pretty simple.
Bitcoin dominance is just the percentage of Bitcoin’s market cap compared to the whole crypto market.
When Bitcoin was first created, it was the only cryptocurrency around, so its dominance was 100%. But things ain’t like that anymore.
Bitcoin dominance is calculated by dividing Bitcoin’s market cap by the total market cap of all cryptocurrencies. Let’s say Bitcoin is worth $1 trillion and all cryptos together are worth $2 trillion — that’s 50% dominance. You can check this number on sites like CoinMarketCap or TradingView any time.
Bitcoin Dominance Chart by author
The history of Bitcoin dominance is like a roller coaster ride. In 2017, we saw dominance drop from around 85% to below 40% during the famous altcoin season. Then in 2018–2019, it climbed back up as many altcoins crashed harder than Bitcoin. From 2020 to 2024, we’ve seen cycles where Bitcoin’s share bounces between roughly 40% and 65%, depending on market conditions and investor sentiment.
Why does this even matter?
Well, Bitcoin dominance tells us where money in crypto is flowing. When dominance falls, it usualy means investors are getting more interested in altcoins and spreading their bets. When it rises, it shows a “flight to safety” where people trust Bitcoin more than smaller projects. For someone wanting to earn Bitcoin through writing or other means, understanding these trends helps predict which way the crypto winds are blowing.
1 ➤ Macroeconomic Factor #1:
CBDCs Going Mainstream
How to Prepare for a Shift in Crypto Dominance
Central Bank Digital Currencies (CBDCs) are coming, whether we like it or not. By 2025, many big economies will have their own digital currencies up and running. China’s already testing theirs with millions of people, and the European Central Bank is moving fast too. The U.S. Federal Reserve is bit slower, but they’re definitely working on a digital dollar.
Why would this hurt Bitcoin’s dominance? It’s simple — when governments offer digital money that’s “safe” and backed by central banks, some big investors who were interested in Bitcoin might think twice. These CBDCs will be designed to be user-friendly, stable, and integrated with existing banking systems. For corporations or pension funds just dipping their toes in digital assets, a government-backed option might seem less risky than Bitcoin.
“Banks and financial institutions that were considering Bitcoin might choose CBDCs instead,” explains many experts watching this space. “They get the digital benefits without the regulatory headaches or volatilty that comes with Bitcoin.”
CBDCs have some big advantages over Bitcoin from a mainstream adoption perspective. They’ll be fast, have almost no transaction fees, and won’t use tons of energy like Bitcoin mining does.
Plus, they’ll have the ultimate ‘legitimacy’ stamp — government approval.
This could pull away some institutional investment that would’ve otherwise gone to Bitcoin, specially from more cautious players who care more about stability than decentralization. As these systems develop, interest in decentralized security solutions will also grow to protect digital assets.
2 ➤ Macroeconomic Factor #2:
Institutional Money Spreading to Altcoins
Consider allocating funds across different crypto categories
Big money isn’t just looking at Bitcoin anymore. In 2025, we’ll see institutions spreading their bets across many different cryptocurrencies. It’s already starting with Ethereum, but soon it’ll include other Layer-1 blockchains like Solana, Avalanche, and newer platforms that solve specific problems.
These alternatives to Bitcoin are getting better all the time. They’re faster, cheaper to use, and offer things Bitcoin can’t. For example, Ethereum and its competitors let developers build applications right on the blockchain. Bitcoin was never designed to do that. Many big investors have noticed that these platforms have strong economic models too, creating demand for their native tokens.
“I used to only recommend Bitcoin to our clients, but now we suggest a basket of cryptocurrencies,” said a wealth manager I talked to recently. “The innovation happening on some of these other chains is too important to ignore.”
The approval of Bitcoin ETFs was just the beginning. By 2025, we’ll likely have ETFs for Ethereum and possibly other major cryptocurrencies. This makes it way easier for traditional investors to get exposure to these assets without the technical hassle. When the Morpho launch on Bitget and similar products happen, they open doors for institutional money that previously only considered Bitcoin. As investment options expand, Bitcoin’s share of the institutional crypto pie will naturally shrink.
3 ➤ Macroeconomic Factor #3:
Evolving Regulations and Compliance
Track where large investors are putting their money
Regulation is coming for crypto — and surprisingly, this might hurt Bitcoin more than help it. By 2025, many countries will have clearer rules for digital assets. These rules won’t just focus on Bitcoin, but will create frameworks for all kinds of cryptocurrencies and tokens.
As regulations get clearer, altcoins that were designed with compliance in mind could have an advantage. Some newer projects are building KYC (Know Your Customer) and AML (Anti-Money Laundering) features right into their protocols. Bitcoin, with its anonymous creator and decentralized nature, wasn’t designed with these regulatory considerations in mind.
“Bitcoin was the first, but not the last,” a regulatory expert told me. “Newer cryptocurrencies can adapt to regulatory demands in ways Bitcoin structurally cannot without major changes.”
In places like Singapore, UAE, and even parts of Europe, regulations are evolving to embrace compliant crypto innovation. Projects that help with regulatory reporting, identity verification, or transaction monitoring are getting more attention from both investors and institutions. The chains and tokens that make it easiest to follow the rules will likely see increased adoption from businesses that need to stay compliant. Projects with innovative tokenomics like Memefi are designing their systems with these regulatory realities in mind from the start.
4 ➤ Macroeconomic Factor #4:
Tech Innovation and Real-World Use
smaller-cap cryptos may offer higher growth potential.
Let’s face it — Bitcoin is kinda slow and expensive compared to newer blockchains. It processes maybe 7 transactions per second and sometimes costs a lot in fees. In 2025, this tech gap will become even more important as faster, cheaper options gain traction.
Bitcoin’s energy use is another big problem. While many miners are switching to renewable energy, the network still uses more electricity than some entire countries. Newer protocols use different methods that need way less power. As environmental concerns grow, this could push more users and investors toward greener cryptocurrencies.
The real game-changer, tho, is how other blockchains are being used for actual stuff.
DeFi (decentralized finance) lets people borrow, lend, and trade without banks.
NFTs create new ways for artists and creators to make money.
Web3 applications are starting to replace traditional internet services but with users owning their data.
None of these things work well on Bitcoin’s blockchain without extra layers.
“Bitcoin is digital gold, but these other crypto assets are more like digital oil — they power actual economic activity,” explained a blockchain developer I interviewed.This utility creates natural demand for tokens beyond just speculative value.As more real-world adoption happens through platforms that offer copy trading and other practical services, the cryptocurrencies that power these ecosystems will naturally gain market share.
Market Impacts of Declining Bitcoin Dominance
What happens to the crypto market when Bitcoin isn’t the only big player? First, we’ll see changes in how prices move together. Historically, when Bitcoin goes up or down, almost everything follows. But as dominance drops, this link weakens. Different crypto sectors might follow their own trends instead of just copying Bitcoin.
Volatility could actually increase in the short term. With money spread across more assets, market movements might get more unpredictable. When no single asset controls the market narrative, price swings can happen based on project-specific news rather than just macro trends.
We’re also likely to see more pronounced “altcoin seasons” where certain non-Bitcoin cryptocurrencies outperform Bitcoin for extended periods. These cycles might become more regular and predictable as the market matures. Investors should watch for early signs, like when midcap altcoins start outperforming both Bitcoin and the largest alternatives.
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The distribution of wealth in crypto will change too. Early Bitcoin investors hold a huge percentage of all crypto value today.
As dominance falls, we’ll see wealth spread more evenly across different crypto communities and ecosystems.
New projects like Sender AI launching on Bitget will create fresh opportunities for wealth creation outside the Bitcoin ecosystem.
There’s also a psychological impact when Bitcoin isn’t seen as the only “safe” crypto investment. More institutional and retail investors might become comfortable exploring beyond Bitcoin, further accelerating the trend of declining dominance. This creates a feedback loop where more investment in alternatives leads to more legitimacy, which attracts even more investment.
How Investors Can Prepare for 2025
So how do you get ready for a world where Bitcoin isn’t the only crypto king? Start by thinking about your portfolio differently.
In 2025, a crypto portfolio with just Bitcoin might be seen as too concentrated, like only owning one stock. Consider allocating portions to different crypto categories — perhaps 40–50% to large-caps like Bitcoin and Ethereum, 30–40% to established mid-caps, and 10–20% to smaller, promising projects.
What To Do With Bitcoin Dominance Top Formation
Risk management becomes super important. As money spreads to smaller projects, the chances of picking some losers goes up. Never invest more than you can afford to lose, and consider using stop-loss orders for more volatile holdings. A good strategy is to take partial profits when altcoins make big moves up, then reinvest during downturns.
“I protect my crypto portfolio by thinking in terms of risk buckets,” shared a successful investor. “Higher risk assets get smaller allocations, and I rebalance regularly to keep my exposure in check.”
The timeframe of your investments matters too. Bitcoin still works great as a long-term hold, while some altcoin positions might need more active management. Consider what portion of your crypto investments you won’t touch for years versus what portion you might trade more actively. Different cryptos serve different purposes in a well-designed portfolio.
Don’t forget about taxes! If you’re rebalancing from Bitcoin to other cryptocurrencies, those transactions are usually taxable events. Spread your rebalancing over time to avoid a big tax bill all at once. Some investors find value in joining trading communities where they can learn from others about managing these transitions efficiently.
FAQs About Bitcoin Dominance in 2025
Is Bitcoin’s Dominance Set to Drop in 2025? Here’s What You Need to Know
What exactly is Bitcoin dominance, and why should I care? Bitcoin dominance is Bitcoin’s market cap divided by the total crypto market cap, expressed as a percentage. It shows Bitcoin’s strength relative to other cryptos. You should care because it affects portfolio performance, market cycles, and helps predict which crypto sectors might perform well.
Could Bitcoin dominance actually increase instead of decrease? Yes! If there’s a major financial crisis, war, or crypto regulation crackdown, investors might flee to Bitcoin as the “safest” crypto. Also, if Bitcoin adopts new technology that addresses its limitations, dominance could rise instead of fall.
Which types of altcoins might benefit most from declining Bitcoin dominance? Look at cryptocurrencies that solve real problems, have strong user growth, and aren’t just copycats. Layer-1 alternatives with their own ecosystems, DeFi platforms with actual usage, and projects with institutional backing have the best chance of gaining market share.
How quickly should I diversify my Bitcoin holdings? Don’t rush it. Spread your diversification over months or even quarters, watching for good entry points on other assets. Bitcoin will still be important, so think of this as expanding your crypto exposure, not abandoning Bitcoin.
What warning signs should I watch for that indicate Bitcoin dominance is truly declining? Watch for large institutional investments going directly into altcoins rather than Bitcoin. Look for extended periods where Bitcoin price moves sideways while altcoins rise. Pay attention to developer activity shifting to other blockchain platforms, and notice when mainstream financial media starts covering non-Bitcoin cryptos regularly.
Will a decline in Bitcoin dominance make the overall crypto market more or less stable? In the short term, probably less stable as money flows between different assets. But in the long run, a market not completely dependent on one asset should theoretically become more mature and stable. Think of it like an economy diversifying from being dependent on a single industry.
Should I completely sell my Bitcoin if dominance is expected to drop? No! Bitcoin will remain an important crypto asset regardless of dominance percentage. Most experts recommend maintaining significant Bitcoin exposure while expanding to include other cryptocurrencies with different use cases and growth potential.
As seen on https://digitalcurrencytraders.com
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Four Macroeconomic Factors That Favor Bitcoin Dominance Dropping in 2025 and How to Prepare was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.