Bitcoin News Today: Bitcoin Maintains Market Dominance Amid Strong Institutional Demand

Bitcoin continues to maintain a dominant position in the cryptocurrency market, with institutional demand playing a key role in keeping its market share elevated. This trend has delayed the emergence of an "altseason"—a historical period where altcoins typically outperform Bitcoin—despite some recent gains by major coins like Ethereum [1]. According to a recent quarterly report by Bybit and Block Scholes, Bitcoin’s dominance remains on an upward trajectory, diverging from the usual pattern observed after a halving event [2]. In previous cycles, dominance typically dropped around 230 days after the halving, signaling a shift in capital toward altcoins. This time, that milestone passed in December 2024 without the expected decline [3].

The shift in market behavior is attributed to changing investor dynamics, particularly the growing involvement of institutional players. Corporate treasuries, pension funds, and other institutional investors have increasingly allocated capital to Bitcoin through spot ETFs and direct holdings. These investors tend to adopt a long-term strategy, reducing the volatility and capital turnover that historically fueled altcoin rallies [4]. With Bitcoin continuing to outperform traditional assets—posting roughly 79% gains over the past year compared to the S&P 500’s 16%—the incentive to reallocate to riskier altcoins remains limited [5].

Ethereum, however, has shown signs of potential leadership. It has outperformed Bitcoin by nearly 100% since April, driven by factors such as the May Pectra upgrade, clearer U.S. staking regulations, and rising inflows into ETH spot ETFs [6]. In July, ETH ETF inflows even outpaced BTC ETF inflows on several occasions [7]. Nevertheless, Ethereum’s performance has not yet sparked a broader market rotation or a significant decline in Bitcoin’s dominance [8]. Analysts suggest that a sustained shift in institutional flows from BTC to ETH ETFs—alongside regulatory advancements like tokenization—could eventually tip the balance [9].

Market sentiment and derivatives data reflect cautious optimism. Bitcoin’s perpetual futures funding rates remain consistently positive, indicating strong bullish sentiment [10]. Ethereum options, meanwhile, show a stronger skew toward out-of-the-money calls, suggesting growing demand for upside exposure [11]. However, this optimism has not reached the levels seen in previous altseasons. For now, Bitcoin remains the primary barometer of the market, with its price and volatility serving as key indicators for the broader crypto landscape [12].

While some analysts forecast the eventual arrival of altseason, particularly if Ethereum breaks key resistance levels and attracts more institutional capital [13], the current environment remains characterized by caution and consolidation. Until there is a clear and sustained shift in capital flows, Bitcoin is expected to maintain its dominance, with altcoin gains viewed as isolated rather than part of a broader market trend [14].

Source:

[1] This Week in Crypto, Full Written Summary: W2 August (https://app.santiment.net/insights/read/this-week-in-crypto-full-written-summary-w2-august-8845)

[2] Bybit x Block Scholes Quarterly Report: Altcoin season and the evolving role of Bitcoin

[3] Block Scholes x Bybit Crypto Derivatives July 25

[4] Block Scholes x Bybit Crypto Derivatives July 16

[5] Block Scholes x Bybit Institution Report: Drivers and Sentiments Behind Ether’s Recent Breakout and How Far It Can Go

[6] Block Scholes x Bybit Crypto Derivatives July 10

[7] Block Scholes x Bybit Crypto Derivatives June 27

[8] Block Scholes x Bybit Crypto Derivatives June 4

[9] Block Scholes x Bybit Institution Report: Drivers and Sentiments Behind Ether’s Recent Breakout and How Far It Can Go

[10] Block Scholes x Bybit Crypto Derivatives April 25 2025

[11] Block Scholes x Bybit Crypto Derivatives July 4

[12] Block Scholes x Bybit Institution Report: Drivers and Sentiments Behind Ether’s Recent Breakout and How Far It Can Go

[14] Block Scholes x Bybit Crypto Derivatives July 25