Bitcoin News Today: September Altcoin Shift: Capital Favors ETH-Linked High-Beta Coins

The altcoin market is showing early signs of entering a potential "altcoin season," a phase historically defined by a significant outperformance of alternative cryptocurrencies over Bitcoin (BTC). According to Coinbase Institutional's latest monthly outlook, conditions are aligning for a market shift toward altcoins as we approach September 2025. Bitcoin’s dominance has decreased from 65% in May to approximately 59% by August, signaling a gradual rotation of capital into altcoins [1]. This trend is further supported by a 50% increase in the total altcoin market cap since early July, which now stands at around $1.4 trillion [1].

The evolving dynamics are driven by three main factors: falling Bitcoin dominance, improved liquidity, and increased investor risk appetite. As Bitcoin consolidates, capital is increasingly flowing into large-cap altcoins like Ethereum (ETH), Solana (SOL), and others. This is evidenced by the rising ETH/BTC ratio and the performance of the CoinDesk 20 index, which tracks the top 20 cryptocurrencies. ETH has surged by 5.8% as of mid-August, outpacing Bitcoin’s 1.4% gain [4]. The growing institutional interest in ETH is attributed to demand from digital asset treasuries and the broader narrative around stablecoins and real-world assets [1].

Liquidity conditions are also showing improvement, with tighter bid-ask spreads and deeper order books on major exchanges. These developments make it easier for traders to execute larger trades with minimal slippage, potentially encouraging more institutional participation in the altcoin market [3]. Additionally, the recent SEC guidance on liquid staking tokens—suggesting they do not constitute securities under certain conditions—has further supported altcoin performance, particularly for tokens like LDO, which has seen a 58% monthly total return [1].

Retail investor behavior also plays a role in shaping the altcoin market. With over $7.2 trillion in U.S. money market funds, many investors remain on the sidelines due to traditional market uncertainties and expensive valuations. However, as the Federal Reserve prepares to cut interest rates in September and October, the attractiveness of money market funds is expected to wane, potentially leading to a shift in capital toward riskier assets like altcoins [1]. This shift is anticipated to be supported by a broader recovery in crypto liquidity, as indicated by metrics such as stablecoin issuance and spot/perp trading volumes [1].

While some analysts have suggested a full-scale altcoin season is still weeks away, the early indicators point toward a more selective and concentrated movement into higher-beta assets, particularly those with exposure to ETH [3]. Tokens such as ARB, ENA, and OP have shown a higher beta to ETH returns, meaning they tend to be more volatile and thus more susceptible to sharp price swings [1]. Notably, LDO has outperformed, with its beta standing at 1.5, indicating its amplified sensitivity to ETH price movements [1].

In Asia, emerging markets are playing a key role in shaping the altcoin landscape. Countries like South Korea, Japan, and Thailand are implementing regulatory measures and infrastructure to support crypto adoption. South Korea's financial authorities have proposed a spot Bitcoin ETF and a trial of a KRW-pegged stablecoin, while Japan has greenlit its first yen-pegged stablecoin, JPYC [5]. These developments are attracting international attention, with firms like Circle participating in JPYC’s Series A funding round [5]. Meanwhile, Thailand has launched a regulatory sandbox called TouristDigiPay to encourage crypto-based tourism spending, allowing tourists to convert crypto into Thai baht for e-commerce and cross-border transactions [5].

Despite the positive developments, the altcoin market remains subject to macroeconomic and regulatory uncertainties. While the current conditions support a potential rotation into altcoins, the duration and magnitude of the move will depend on both market dynamics and broader economic factors. Analysts caution that this is not yet a broad "altseason" but rather a targeted shift into ETH and select altcoins driven by macroeconomic catalysts [4]. As the market approaches a potential inflection point in September, investors are advised to remain cautious and focus on fundamental and regulatory developments that could shape the trajectory of the altcoin market in the coming months.

Source:

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

[2] 3 Reasons Why Altcoins Are Likely to Outperform Starting ... (https://www.coindesk.com/markets/2025/08/15/altcoin-season-could-begin-in-september-as-bitcoin-s-grip-on-crypto-market-coinbase-institutional)

[3] Altcoin Season Could Begin in September as Bitcoin's Grip on ... (https://finance.yahoo.com/news/altcoin-season-could-begin-september-061652116.html)

[4] Asia Morning Briefing: BTC Demand Cools While “Crypto ... (https://www.coindesk.com/markets/2025/08/21/asia-morning-briefing-btc-demand-cools-while-crypto-capital-is-getting-more-selective-okx-s-gracie-lin-warns)

[5] Could Asia, Not Wall Street, Spark the Next Crypto Rally? ... (https://pintu.co.id/en/news/195387-asia-ready-to-spark-next-crypto-rally)

[6] Asian Shares Mixed As Tech Stocks Track Declines In US ... (https://www.nasdaq.com/articles/asian-shares-mixed-tech-stocks-track-declines-us-peers)