Altcoin Market Cap Surges 50% Since July—Is the Altcoin Season Finally Here?
Hold onto your wallets—altcoins are making a serious comeback. Coinbase just flagged a jaw-dropping 50% surge in altcoin market cap since July, sparking whispers of an altcoin season. But is this the real deal, or just another crypto head-fake?
The numbers don’t lie: altcoins are flexing. While Bitcoin’s been hogging the spotlight, the underdogs are quietly stacking gains. Ethereum, Solana, and a slew of smaller players are riding the wave—proving once again that crypto’s second act isn’t just a sideshow.
But let’s not pop the champagne yet. Traders chasing ‘the next Bitcoin’ have a knack for mistaking hype for momentum. Remember: even a dead cat bounces. Still, with institutional money sniffing around and DeFi innovations piling up, this rally might have legs. Or it’s just another pump before the dump—because in crypto, the only certainty is volatility.
Institutional focus shifts to ETH
Coinbase attributes much of the recent altcoin market strength to growing institutional demand for ethereum (ETH). Digital asset treasuries now hold nearly 3 million ETH, or just over 2% of supply. Bitmine Immersion Technologies alone has purchased 1.15 million ETH this year, supported by a $20 billion fundraising round.
This interest has spilled over into tokens with a high correlation to ETH’s daily returns, such as Arbitrum (ARB), Ethena (ENA), Lido DAO (LDO), and Optimism (OP). Of these, Lido has seen the strongest gains, rising 58% month-to-date.
Coinbase notes that LDO has historically been a straightforward way to gain ETH exposure via liquid staking. Its recent rally was likely helped by U.S. Securities and Exchange Commission guidance stating that certain liquid staking services may not be considered securities under current interpretations.
Liquidity recovery and retail capital potential
Coinbase points to over $7.2 trillion currently held in U.S. money market funds, an all-time high, as a key source of potential new inflows. Since the U.S. Federal Reserve is expected to lower interest rates in September and October, money market funds’ yield appeal may weaken, unlocking more retail participation in crypto and other risk assets.
In addition, the company’s liquidity index, which tracks stablecoin issuance, trading volumes, and order book depth, has begun to rise again after declining for six months. Coinbase expects this trend to continue, supported by a clearer regulatory path for stablecoins and other digital assets.
While the exchange stops short of declaring a confirmed altcoin season, it maintains a constructive outlook for Q3 2025. The combination of reduced bitcoin dominance, growing ETH-led institutional activity, and improving liquidity could set the stage for a more defined altcoin rally in the months ahead.
