The altcoin market is witnessing a notable resurgence, as the altseason index has surged to its highest level since late 2024. This trend marks the beginning of a growth cycle for alternative cryptocurrencies, with experts attributing various factors to this uptick, according to reports from DLNews.
Data from Blockchain Center highlights that 75% of the top 50 cryptocurrencies have outpaced Bitcoin in returns over the last 90 days. CoinGlass also reflects this upward movement, with its Altcoin Season Index climbing to 80 points on September 15. Bitcoin’s market share has dropped by 6% in the past six months, now standing at 58%, a decline that traditionally heralds a period favoring altcoin growth.
Shane Molidor, founder of Forgd, noted that as the market evolves, investors are realigning their portfolios towards alternative cryptocurrencies, moving away from Bitcoin’s earlier dominance.
A pivotal catalyst identified for this altseason is the anticipated reduction in key interest rates by the Federal Reserve on September 17. Market expectations are leaning towards a decrease in monetary policy rates, which could inject liquidity into the financial system and spur demand for higher-risk assets. Kyle Shass, founder of MV Global, suggested that a more substantial rate cut of 0.5% could ignite a vigorous rally in asset prices.
As risk appetite among investors grows, Molidor pointed out that Layer 2 tokens and ecosystem coins with high total value locked (TVL), trading volumes, and revenues are likely to become attractive for corporate reserves. This trend could significantly elevate demand for these assets. Sean Dawson, head of research at Derive, emphasized that corporate purchases of crypto assets could create a reflexive dynamic conducive to upward price momentum.
Annabelle Huang, founder of Altius, predicts that the accumulation of cryptocurrencies by public companies will persist, but this will primarily benefit those “quality altcoins” characterized by sustainable revenues and strong user engagement. Molidor identified Ethereum, Solana, and BNB as cryptocurrencies meeting these criteria.
Former Bloomberg exchange analyst James Seyffart also pointed to the emergence of a “corporate” altseason, indicating that only those cryptocurrencies that large companies hold as reserves are likely to experience significant growth.
Additionally, regulatory clarity is cited as another catalyst for the altseason. SEC Chairman Paul Atkins has indicated that most cryptocurrencies should not be classified as securities, putting forth the need for unified regulations in the crypto market. The SEC is currently reviewing over 90 applications for spot exchange-traded funds (ETFs) based on various altcoins, including Solana, XRP, and Litecoin. Analysts believe that approvals for these funds could act as a bullish signal for the respective underlying cryptocurrencies.
However, Bitfinex analysts caution that the growth phase for alternative coins may not commence until these new exchange-traded funds are validated. Previous insights by on-chain analyst Timo Oinonen suggested that the prevailing trend may signal the end of what he referred to as the era of “mass altseasons.”
As these developments unfold, the cryptocurrency landscape appears to be on the cusp of significant changes, driven by investor sentiment and regulatory advancements.
