Large Cap Altcoins Are Stealing Bitcoin’s Crown – Here’s How

The king isn't dead—but the courtiers are getting restless. Ethereum, Solana, and BNB are leading a coordinated assault on Bitcoin's market dominance, fueled by institutional adoption and DeFi's relentless innovation.

DeFi Summer 2.0 is here

While Bitcoin maximalists nap on their cold wallets, altcoin protocols are eating the world. Yield farms now generate more daily revenue than some traditional banks—not that the banks would admit it.

The institutional shuffle

Hedge funds that once laughed at 'shitcoins' now hold seven-figure alt positions. Meanwhile, BlackRock's ETH ETF approval triggered a 40% surge—because nothing screams decentralization like Wall Street's stamp of approval.

Market share heist in progress

BTC's dominance slipped below 45% last quarter for the first time since 2018. The culprits? Smart contract platforms actually being used for something beyond 'digital gold' platitudes.

This isn't an altseason—it's a regime change. And the best part? The suits still don't get it.

The recent altcoin performance is seen as a potential turning point. In 2025, altcoins did not see a full season where all assets rallied. However, some of the top coins and tokens had periods of decisively outperforming BTC. 

Large cap altcoins challenge BTC’s dominance

One of the main concerns for an altcoin market is that assets from older cycles will never see liquidity allocations again. ETH proved the exception, recently recovering from its lows and showing its key role for DeFi, stablecoin activity, and decentralized trading. 

For the past month, 42 out of 56 large-cap altcoins outperformed BTC, signaling a potential return to a modified altcoin market. 

📈 Crypto Metric of the Day:  Altcoin Season Index.

Altcoin Season Index just tagged 75 percent – 42 of 56 large‑cap alts beat bitcoin over the last 30 days. Classic rule says alt season is on when at least 75 percent of the baskets outperform $BTC.

🔍 What it means ⤵️… pic.twitter.com/iS4Spm46Be

— IT Tech (@IT_Tech_PL) July 16, 2025

Over the last 90 days, multiple types of assets outperformed BTC. Some of the best performers included meme tokens, especially Pudgy Penguins (PENGU). Several memes also bounced from their lows with robust gains, including SPX, WIF, BONK, and MOG. 

The other class of outperforming tokens belonged to DeFi and DEX, including HYPE, AAVE, MORPHO, and others.

Unlike previous altcoin seasons, this time investors are following several clear trends. Blue chip tokens like ETH, SOL, and XRP, along with several other assets, are closely watched for signs of ETF launches. Even coins from older bull seasons can hope for a recovery in the case of an ETF approval. 

Assets from older cycles like IOTA and XMR also outperformed BTC on a quarterly basis. Appetite for risk is increasing, showing altcoins are never really abandoned. 

Altcoin seasons are still short-lived

Even with enthusiasm for altcoins, a full season may be short-lived. The expectation for peak valuations and rallies has ranged from 4 to 8 weeks historically. The last full altcoin season happened in 2023, with smaller rallies in between. 

Altcoins and tokens are also reassessing their strength. As of July 16, most crypto assets remain neutral based on their relative strength index. Few tokens are overbought or oversold. Some, like SUI, SOL, XRP, ARB, and JUP, are showing strength, based on their usage and utility. 

This time, the altcoin season may take into account real-world applications and usage. Apps and platforms producing significant fees remain preferable, as their tokens are supported by real economic activity. Fewer VC-backed tokens are launching on the market, removing some of the burden of value extraction. 

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