Persistent institutional investment through Bitcoin ETFs and corporate treasuries is maintaining Bitcoin's market dominance at historically high levels, disrupting typical post-halving capital rotation patterns and delaying the anticipated altcoin season, according to a joint quarterly report from Bybit and Block Scholes. Historically, Bitcoin dominance peaked around 230 days post-halving before investors shifted to altcoins for higher returns, but this pattern failed to materialize in December 2024 as institutional 'sticky capital' remained locked in Bitcoin.
Bitcoin has risen approximately 79% over the past year, far outpacing the S&P 500's 16% gain, reducing incentive for riskier altcoin investments. While Ethereum has shown strength with nearly 100% gains against Bitcoin since April—fueled by the Pectra upgrade, clearer U.S. staking regulations, and occasional ETH ETF inflows surpassing Bitcoin ETFs in July—its market share remains below historical altseason thresholds.
Analysts note that potential staking-enabled ETH ETF approvals could eventually trigger a selective altcoin season favoring higher-quality projects, but derivatives markets currently lack the euphoric sentiment seen before past altcoin rallies. The report concludes that without a significant decline in Bitcoin dominance or surge in institutional ETH allocations, a broad altcoin season remains unlikely in the near term.