Asset management company Grayscale has indicated that the third quarter of 2025 could signify an altcoin season that differs from previous periods, primarily attributed to Bitcoin’s underperformance in comparison with other cryptocurrencies and growing activity on centralized exchanges.
In a recent report, Grayscale observed that while overall returns in crypto-related markets, including Bitcoin, Ether, artificial intelligence (AI) projects, and smart contracts, remained positive during Q3, this quarter may specifically be recognized as an “alt season.” Notably, Grayscale highlighted that the smart contracts sector saw enhanced performance following the introduction of stablecoin legislation—the GENIUS Act, signed into law in the U.S. in July—which indicated a legislative boost for this segment. However, Bitcoin and several altcoins fell short of expectations.
According to the report, “Bitcoin underperformed other market segments, and the pattern of returns could be considered a crypto ‘alt season’—although distinct from other periods of falling Bitcoin dominance in the past.” This underperformance may reflect ongoing shifts in market dynamics and investor sentiment.
Additional themes identified in the report included a marked increase in the number of crypto treasuries that hold a diverse array of tokens, heightened adoption of stablecoins in the U.S. market, and a rise in trading volumes on centralized exchanges. Looking ahead, Grayscale speculated that additional U.S. policies, particularly a digital asset market structure bill currently under consideration in Congress, might further energize crypto markets as they approach the fourth quarter of 2025.
Despite Bitcoin’s price reaching an all-time high of over $120,000 in August, it still appeared to lag behind other asset classes such as gold and stocks when it came to setting new high price records. Some research indicated that both Bitcoin and altcoins were experiencing slower growth than expected, partially due to stablecoins being withdrawn from exchanges.
Grayscale remains optimistic about the potential for cryptocurrency exchange-traded funds (ETFs) to influence market trends. As one of the leading asset managers in this domain, Grayscale has been proactive in creating digital asset investment vehicles. The firm noted that the recent approval of new listing standards for crypto ETFs by the U.S. Securities and Exchange Commission (SEC) could contribute positively to market movements in the upcoming months. The SEC has already authorized one of Grayscale’s multi-asset crypto ETFs, which provides exposure to Bitcoin, Ethereum, XRP, Solana, and Cardano, showcasing the evolving landscape of cryptocurrency investment options.
