Bitcoin is nearing record highs again, yet the crypto market’s total capitalization isn’t following the typical pattern. Historically, when Bitcoin hits new peaks, altcoins rise alongside it, driving up overall market value. But this time, there’s a major gap: with Bitcoin close to breaking its all-time highs, total market cap is still approximately $500 billion lower than previous cycles. So, what’s different?
Bitcoin’s Climb to New Heights
Bitcoin’s past rallies often lifted the entire crypto market. When Bitcoin peaked at $69,000 on November 10, 2021, crypto market cap surged to around $3 trillion. A similar spike occurred in March 2024 when BTC reached $73,738, with market cap again approaching $3 trillion. But today, despite Bitcoin’s strong performance, total market capitalization sits around $2.5 trillion, indicating that the altcoin sector is significantly underperforming.
Ethereum’s Performance Falls Short
Ethereum, the largest altcoin, has played a major role in the overall market cap decline. At its peak during the last bull market, Ethereum reached a $570 billion valuation with its price hitting $4,878. In March 2024, ETH rose close to a $490 billion market cap, with prices around $4,000. Now, Ethereum’s market cap sits at only $317 billion, with prices unable to rise above $2,650—down nearly 46% from its all-time high.
Despite this underperformance, some traders remain hopeful, considering the current level as an “accumulation zone.” TraderPA, for instance, is undeterred, noting that Ethereum makes up 30% of his holdings due to its steady accumulation pattern.
Altcoin Market Struggles
Ethereum isn’t the only altcoin struggling. Across the board, high-cap altcoins are far from their peaks. Here’s a snapshot of some top assets and their distance from all-time highs:
- Solana (SOL): 31% down
- XRP: 85% down
- Dogecoin (DOGE): 76% down
- Toncoin (TON): 39% down
- Cardano (ADA): 88% down
- Polkadot (DOT): 92% down
- Shiba Inu (SHIB): 78% down
Only Binance Coin (BNB) is within close range of its all-time high, currently about 16% lower. Overall, this altcoin slump has prevented the crypto market from reaching the heights of previous cycles, even with Bitcoin’s strong performance.
Stablecoins are Taking Market Share
Stablecoins have also shifted the market’s landscape, growing their capitalization to $177 billion—up from $120 billion at the end of 2021. Although stablecoins add liquidity and stability, they’ve drawn funds away from altcoins. Crypto analyst James Check points out that this shift to stablecoins is likely adding pressure on altcoins by pulling funds away from these assets.
Bitcoin Dominance Soars
Bitcoin dominance now exceeds 60%, reaching its highest level since March 2021. This increase highlights a growing preference for Bitcoin, particularly with large-scale investors. Institutional inflows into Bitcoin ETFs have surged, with over $2 billion in just the past week. The surge in Bitcoin’s dominance indicates that retail participation in altcoins may be limited right now, as investors focus more on Bitcoin. Still, some analysts remain hopeful that “altseason”—a phase where altcoins outperform Bitcoin—could be approaching.
Could Altseason Be Near?
Despite the current gap between Bitcoin and altcoins, many traders expect that altcoins will eventually gain momentum. Historically, altcoins often rally after Bitcoin stabilizes at a new high. Crypto analyst Mister Crypto recently hinted that altseason might be just around the corner, raising optimism for an eventual altcoin recovery.
Final Thoughts
The current crypto cycle appears different from previous ones. Bitcoin is leading the market with strong support from institutional investors, while most altcoins remain stagnant. Rising stablecoin market share also shows that many investors prefer safer assets in today’s volatile market.
While Bitcoin currently dominates, seasoned crypto investors know the market’s cyclical nature. If altseason does arrive, we could see the market cap return to $3 trillion, potentially pushing crypto into new territory. For now, Bitcoin remains in the spotlight, but the altcoin market may not be far behind.
