Altcoins Come and Go — Only Bitcoin Remains｜Matrixport Research

Since the launch of Ethereum Spot ETFs in the U.S. last summer, Ethereum’s dominance has declined by nearly 50%. If Ethereum is the “oil” that powers the crypto economy, then the current state of that economy resembles a deep recession. But Ethereum isn’t the only altcoin losing ground to Bitcoin. Over the past year, countless altcoin narratives have come and gone — from Dogwifhat to Virtual tokens to Trump-themed coins. These tokens often follow a familiar pattern: a steep, euphoric rally followed by an equally sharp crash, forming pyramid-like price structures with long, drawn-out tails.

However, for a sustained rally to occur, Bitcoin still requires a catalyst in the form of one of three types of liquidity:

(1) dovish Fed signals or rate cuts,

(2) micro-liquidity, such as stablecoin growth and increased futures leverage, or

(3) macro-level liquidity, including growth in money supply or other forms of government-driven stimulus. Historically, we have seen meaningful spillover into altcoins only during periods of abundant liquidity.

For altcoins to gain meaningful upward momentum, we would need to see either increased demand driven by real-world use cases or a liquidity surge similar to that during the 2020–2021 cycle. However, based on the indicators we track, a significant liquidity influx into the crypto market appears unlikely — making an altcoin rally improbable in the near term.

The U.S. Federal Reserve will likely keep interest rates unchanged through the summer as it evaluates the inflationary impact of Trump’s proposed tariffs. While markets are pricing in four rate cuts for 2025, Fed Chair Powell has emphasized a cautious approach in assessing the economic effects of these proposals.

More recently, stablecoin minting has sharply declined, and this micro-liquidity signal supports the view that Bitcoin will likely remain around the $80,000 to $90,000 range for now. However, it’s unlikely to stay completely stagnant. Trading volumes, including in Bitcoin ETFs, remain subdued, suggesting limited speculative activity. Investors appear preoccupied with their underperforming equity portfolios, as Trump’s push to renegotiate trade agreements and reshape the global order weighs heavily on markets.

Interestingly, this has weakened the U.S. dollar. Since the global money supply is often measured in USD terms, a weaker dollar mechanically inflates the money supply. This effect has historically been supportive of Bitcoin prices.

Bitcoin’s survival was often questioned in past bear markets, mainly due to fears of regulatory crackdowns or outright bans. That risk has now diminished significantly, which helps explain why Bitcoin is holding up far better during the current correction than in previous cycles.

Disclaimer: The above content is for informational purposes and reference only. The content does not constitute investment advice. Digital asset transactions can be precarious and volatile. Investment decisions should be made after carefully considering individual circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.

Download Matrixport Official APP: https://invest.matrixport.com/downloadPage/en

Matrixport Official X: https://x.com/Matrixport_EN

Matrixport Official Community: https://t.me/Matrixport_EN