Ethereum News Today: Altcoin Momentum Builds as Bitcoin's Dominance Wanes

Global interest in altcoins has shown signs of cooling after a brief surge in the second half of 2025, according to recent market data. Despite a 50% rise in the total altcoin market cap since early July, reaching $1.4 trillion as of August 12, the CoinMarketCap Altcoin Season Index remains in the low 40s, below the historical 75 threshold typically associated with a full-scale altcoin season. This discrepancy highlights a divergence between market capitalization growth and broader retail participation [1].

Bitcoin's dominance in the crypto market has dipped from 65% in May 2025 to approximately 59% by August 2025, signaling an early phase of capital reallocation into altcoins. Analysts suggest that while this trend has not yet translated into a full-blown altcoin season, it may set the stage for one in the coming months, particularly as market conditions evolve and regulatory clarity continues to improve [1].

Ethereum (ETH) has emerged as a central player in this reallocation, with institutional demand for digital asset treasuries (DATs) and growing interest in stablecoins and real-world assets driving much of the momentum. For example, Bitmine Immersion Technologies recently secured $20 billion in funding to purchase 1.15 million ETH, with the company now having the capacity to acquire $24.5 billion worth of ETH in total. Additionally, the former leader in ETH DATs, Sharplink Gaming, currently holds around 598,800 ETH [1].

Tokens with a higher beta to ETH—such as ARB, ENA, LDO, and OP—have shown increased volatility relative to Ethereum. Among these, LDO has seen the most significant performance, posting a 58% monthly total return. This rise has been attributed to both institutional and regulatory developments, including a U.S. SEC staff statement on August 5 indicating that certain liquid staking activities do not constitute securities, provided they remain "ministerial" in nature. However, the guidance is not legally binding and could be subject to change with future regulatory shifts [1].

The broader macroeconomic backdrop also supports a potential shift in market dynamics. Over $7.2 trillion remains in U.S. money market funds, the highest level on record, with cash balances rising by over $200 billion since June despite recent gains in crypto markets. Analysts suggest that this liquidity could be drawn into risk assets like altcoins following anticipated Federal Reserve rate cuts in September and October. Historical patterns indicate that such cuts have historically led to increased retail participation in crypto markets [1].

Moreover, signs of crypto liquidity recovery have emerged, as measured by a custom z-score of weighted liquidity factors including stablecoin issuance, spot and perpetual trading volumes, and orderbook depth. The data indicates that liquidity has started to rebound after six months of decline, partly due to a clearer regulatory environment for stablecoins [1].

Source: [1] Monthly Outlook: Altcoin Season Cometh (https://www.coinbase.com/institutional/research-insights/research/monthly-outlook/monthly-outlook-aug-2025)