Traditional “altseason” market rallies are dead, replaced by shorter cycles and violent sector rotations, says Andrei Grachev, Managing Partner of DWF Labs.
Grachev attributes the shift to an explosion of tokens competing for limited capital, declining retail participation, and Bitcoin ETFs trapping liquidity. Institutional investors now favor large-cap assets like Bitcoin (BTC), Ether (ETH), and tokenized real-world assets (RWAs).
“The long tail of tokens will still exist, but will largely function as high-risk venture or casino-style plays,” Grachev said. “The market is moving away from broad altcoin rallies and toward more selective moves in specific sectors.”
Bitwise CIO Matt Hougan echoes this view, noting institutional focus has pivoted to yield-bearing or revenue-generating digital assets.
Since October 2025’s market crash, 38% of altcoins trade near all-time lows-worse than post-FTX conditions. Over $209 billion has exited altcoins in 13 months, shrinking their total market cap from $1.19 trillion to $719 billion.
Meanwhile, Bitcoin ETFs report strong inflows, while altcoin ETFs bleed capital.