“Alt Season Has Begun”, Said CryptoQuant CEO – Is It Really Here, and What’s Driving It?

Tags: altcoin

Key Takeaways:

• Investors are shifting focus as altcoin trading volume is much higher than Bitcoin’s.
• Stablecoins are now the primary driver of altcoin interest, rather than direct rotation from Bitcoin.
• This alt season is highly selective, requiring investors to do thorough research (DYOR).

The CEO of CryptoQuant, Ki Young Ju, ignited controversy with a statement that “alt season has begun”. Although others in the crypto community have been impatiently waiting for an altseason (a rising back of coins other than Bitcoin) to emerge, Ju claims that this time around, things appear to be different than in previous cycles. Is this real “alt season,” or something else?

Trading Volumes Tell a Story

As per Ju, altcoin trading volume is about 2.7x BTC (Bitcoin). Traders are increasingly interested in altcoins such as Ethereum (ETH) and Solana (SOL) more than the first cryptocurrency, according to this severe indicator. Quick example of a normal day on any crypto exchange, if BTC volume is $10b then total volume of all coins is ~$27b. This increase in traction bodes better for altcoins.

CEX Volume Ratio: Bitcoin vs. Altcoins. Source: CryptoQuant

“BTC Dominance no longer defines alt season – trading volume does,” Ju said on X (formerly Twitter).

Altcoin seasons were historically characterized by falling Bitcoin dominance as investors transferred profits from BTC into altcoins. Bitcoin dominance, which measures the market cap of BTC versus the rest of crypto assets, has historically been a key indicator of altcoin rallies. CoinStats data showed Bitcoin dominance at 58% as of Feb. 21, up from lows of 51.5% in December, suggesting a potentially different type of altcoin season is unfolding.

BTC-Alts Correlation Matrix (Yearly) Is Waning. Source: Ki Young Ju

But times have changed, says CryptoQuant CEO.

Stablecoins Take Center Stage

The biggest difference this cycle is the lack of a Bitcoin-to-altcoin rotation. In the past, this cycle included what was termed an alt season, where traders rotated profits away from Bitcoin and into the various available altcoins. According to Ju, stablecoin holders are favoring altcoins without trading Bitcoin, which marks a significant shift in market behavior.

Instead, stablecoins like Tether (USDT) and USD Coin (USDC) are being used as the primary trading pairs for altcoins. Traders are purchasing altcoins directly with stablecoins, effectively skipping Bitcoin entirely. This means stablecoins have increasingly become the base currency for altcoin trading.

While this trend has been brewing for a while, its acceleration happened among stablecoins. Market capitalizations for stablecoins have spiked. Currently, the total stablecoin market cap is around $232 billion as of February 21, 2025, according to statistics from CoinGecko. According to investment bank Citi, stablecoin adoption would continue to heat up digital asset performance in 2025, particularly altcoins.

A Selective Landscape

Then again, there’s an important caveat: Ju warns that this is a “very selective alt season” — even incoming volume comes with stablecoin activity. He points out that only a few coins are pumping, highlighting a lack of “fresh liquidity” entering the broader crypto market.

Consider the Solana ecosystem, for instance. While Solana-based memecoins have captured significant attention, rug pulls and insider schemes are driving investor outflows and reducing capital inflows on the network. That shows how quickly sentiment can turn, and how important the due diligence process is in this environment.”

This makes it a tougher environment for investors nowadays. The first one being that just leveraging any altcoin that you buy is pointless. Careful research and understanding of specific projects are essential.

Bitcoin’s Evolution: A Paper-Based Layer 2

The other key factor is Bitcoin’s decoupling from the wider crypto market. “Bitcoin has built its own paper-based Layer 2 ecosystem through ETFs, MSTR, funds, and more,” Ju said in a post on X in December.

$100 Billion In Bitcoin: US Bitcoin ETFs crossed $100 billion in Bitcoin holdings in November, indicating substantial institutional adoption. Moreover, according to BitcoinTreasuries, public companies have bought up more than $60 billion of Bitcoin so far, primarily as an hedge against inflation. NET. Take MicroStrategy, for instance, which is adding to its Bitcoin treasury and treating it like a multiyear store of value.

This “paper-based L2 Bitcoin,” as Ju calls it, is disconnected from the rest of the crypto ecosystem. “In this paper-based L2 Bitcoin, bridging to other altcoins is impossible,” he argues. In other words, as Bitcoin grows, as it is being adopted by institutions, this does not necessarily mean that we are seeing increased liquidity or support for altcoins.

The Need For Separating Trends

For the first time, this is a major development with Bitcoin decoupling from others. Ju said they still only see a handful of altcoins making independent moves as they are finding their own liquidity. It further highlights the need for altcoins to establish their ecosystems and use cases independent from Bitcoin.

This shift underscores the need for investors to focus on altcoins with strong fundamentals, unique technology, and growing user adoption. In this environment, altcoins that can create their own narratives and create fund flow independent of Bitcoin, tend to do well.

The Indecision: Is This Actually an Alt Season?

Ju’s analysis is provocative, but not without critics. This has led some in the crypto community to wonder if a “selective” alt season even constitutes an alt season. One of the users going by the name RobW pointed out that Ju’s claim regarding “a few tokens are pumping” is not equal to an alt season. And RobW believes that it may not be the real true alt season yet.

Altcoin Season Index. Source: Blockchaincenter

This discussion underscores the evolving nature of the crypto landscape and the urgency with which we need to rethink classification parameters. This alt season, however, is fundamentally different than previous cycles– whether you judge it to be a “true” alt season or not.

More News: Too many altcoins? Is the Altseason Era Over? Coinbase Re-evaluates Listing Criteria

What To Do Next?

As this is such a selective market, the individual investor is expected to research which altcoins are and will remain relevant.

Research is key in this environment. In these market conditions, investors should look for projects with solid fundamentals, expanding user bases and clear use cases. Finding altcoins that can succeed on their own apart from Bitcoin is the key.

A Changing Landscape

Markets continue to change in the world of crypto. Although the idea of an alt season is always exhilarating, we must be careful and flexible for today’s market. This “selective” alt season may not be a broad rally like we’ve seen in the past, but it does offer unique opportunities for those willing to do their homework.