Altcoin Season is a name that crypto investors both love and hate. They love it because it feels like a grand carnival: once it comes, Bitcoin is no longer the only protagonist on stage, but steps back, leaving the spotlight for a group of altcoins to perform to their heart’s content, while a massive wealth effect unfolds, making sudden riches no longer seem like a distant dream. They hate it because the volatility of the Altcoin Season market is like a “poisoned apple” — even knowing it is toxic, people still cannot resist taking a bite.
Overall, for many people, Altcoin Season not only means new investment opportunities, but also a relay race of wealth effect. Every time someone shouts on social media, “Altseason is coming,” countless eyes immediately light up.
Recently, Coinbase directly pointed out in its latest market outlook: “With September approaching, Altcoin Season may be about to fully arrive.” This sentence was like a war drum, both exciting and alarming. After all, Altcoin Season has never been an empty slogan; behind it often lies changes in macro policy, secret shifts in capital flows, clues from on-chain data, and the early layout of institutions. In other words, the market’s atmosphere is brewing, and the valve of liquidity is slowly being turned open.
From the slow decline in Bitcoin dominance, to the rising institutional demand for ETH, to the subtle shift in the Federal Reserve’s monetary policy, all signals are pointing in the same direction — a new altcoin frenzy may be waiting not far ahead to be ignited.
What Is “Altcoin Season”? Why Does It Attract So Much Attention?
“Altcoin Season” usually refers to this state: among the top 50 altcoins by market cap, more than 75% of tokens have outperformed Bitcoin in the past 90 days. In other words, capital is gradually overflowing from BTC into the higher-risk, higher-potential-reward altcoin market.
Why is it important?
For retail investors: Altcoin Season often means higher profit opportunities. A 50% rise in Bitcoin may already look impressive, but some altcoins could see 3x, 5x, or even higher gains in the same cycle.
For institutions: Increased liquidity in the altcoin market represents more opportunities for portfolio diversification and arbitrage strategies.
For the entire industry: Altcoin Season means higher ecosystem activity, with more capital flowing into infrastructure, applications, and emerging projects.
In Coinbase’s outlook, it explicitly mentioned that Bitcoin dominance has already dropped from 65% to 59%, which is a typical “early rotation” signal.
Where Are the Signals of Altcoin Season?
1. Macro Environment: Fed Policy and Capital Returning
The core background variable affecting Altcoin Season is macro liquidity.
As of now, U.S. money market funds’ cash balance has exceeded $7.2 trillion, a historical high. This shows a large amount of capital is still staying in low-risk “wait-and-see” mode. Coinbase believes that as the Federal Reserve may start a rate-cutting cycle in September and October, the appeal of money market funds will decline, and some capital will begin to turn toward the crypto market.
The logic behind this is straightforward:
Lower interest rates → lower attractiveness of traditional assets → risk assets (cryptocurrency) regain favor.
Once retail capital “unfreezes” from money market funds, the crypto market may usher in a new wave of incremental inflows.
This is also why Coinbase does not agree with the view that “September rate cuts = market top.” On the contrary, it believes the rate-cutting cycle will push more retail participation in the medium term, thereby amplifying opportunities in the altcoin market.
2. ETH’s Key Role: The Rise of Institutional Demand
Although “Altcoin Season” seems like a comprehensive phenomenon, ETH is often the “starting point” of the rotation. Coinbase particularly emphasized ETH’s position among institutional investors:
Digital Asset Treasury (DAT) demand: Companies like BitMine have already purchased over 1.15 million ETH, worth $20 billion.
RWA and stablecoins: As a smart contract platform, ETH is naturally the foundational support for these narratives.
Liquid staking (Lido’s LDO): With the SEC stating that “under certain conditions, liquid staking tokens are not securities,” tokens like LDO have seen strong rallies.
Data shows that currently, top ETH treasury companies hold about 2.95 million ETH, already accounting for more than 2% of total supply. Such large-scale institutional holdings not only stabilize ETH’s position but also provide a “liquidity source” for the altcoin ecosystem.
3. Capital Rotation Signals: Bitcoin Dominance Declines
From the data perspective, Bitcoin dominance (BTC Dominance) is the most intuitive indicator.
May 2025: BTC dominance was around 65%, meaning funds were highly concentrated.
August 2025: Dominance has fallen to 59%, a clear sign of shifting.
Meanwhile, CoinMarketCap’s Altcoin Season Index is currently only 44, below the historical threshold of 75. But this does not mean the opportunity is far away — on the contrary, it shows the market is still in the early stage.
Why is this good? Because the earlier you enter, the easier it is to capture the full rally. For investors, if you wait until the index breaks above 75 to enter, you may have already missed the best profit window.
4. ETH Beta and the Gamble of High-Risk Altcoins
Outside of ETH, some altcoins have shown even higher market sensitivity.
ARB, ENA, LDO, OP: Their relative ETH Beta is greater than 1, meaning their price swings are stronger.
LDO: Closely related to liquid staking, combined with the SEC’s latest statement, LDO surged as much as 58% in one month.
This shows that during Altcoin Season, investment opportunities are not “universal rises,” but will concentrate on tokens highly related to core narratives (staking, stablecoins, RWA).
Risks and Uncertainties: Altcoin Season Is Not a Guaranteed Profit
It needs to be stressed that although Coinbase is optimistic about Altcoin Season, the market is not risk-free.
Regulatory risks: The SEC’s statement is a short-term positive, but the future policy direction is still uncertain.
Macro risks: If economic recession risks intensify, even with Fed rate cuts, market risk aversion may rise.
Bubble risks: Altcoins’ volatility is far higher than BTC and ETH, often accompanied by sharp rises and sharp falls.
Therefore, retail investors participating in Altcoin Season must pay attention to macro liquidity, control position sizes, and avoid blindly chasing tops.
Conclusion: The Turning Point of Altcoin Season Is Approaching
In summary, Coinbase’s view is not just “empty talk,” but based on the following facts:
The Fed’s monetary policy may release new liquidity;
A huge amount of funds are still sitting in money market funds, and once shifted, the scale will be considerable;
Bitcoin dominance is declining, showing early rotation has begun;
ETH as a core asset is attracting institutional demand;
Some altcoins (such as LDO) have already started, providing market samples.
Therefore, it can be said: September 2025 may become the true starting point of Altcoin Season’s outbreak. But at the same time, investors need to be aware of risks, especially under the uncertain backdrop of regulation and macroeconomics.
