Coinbase has updated its forecasts regarding altcoins, indicating the potential onset of a full-scale altcoin season despite shifts in Bitcoin's dominance.
Overall Market Condition
Coinbase noted that Bitcoin's market dominance has decreased from 65% in May 2025 to around 59% by August. These changes suggest a potential capital shift into altcoins. The Altcoin Season Index from CoinMarketCap also remains low in the 40s, below the 75 threshold that typically indicates an altcoin season, while the total altcoin market cap has risen over 50% since early July, reaching $1.4 trillion as of August 12.
Divergence and Institutional Investor Interest
The noted divergence between the Altcoin Season Index and total altcoin market capitalization reflects growing institutional interest in Ethereum (ETH). This demand is partly driven by the presence of digital asset treasuries and the broader discussion surrounding stablecoins and real-world assets. For example, Bitmine Immersion Technologies acquired 1.15 million ETH through a new $20 billion funding round, potentially increasing its holdings to $24.5 billion.
Impact of Institutional Demand on Altcoins
Institutional demand for ETH, combined with regulatory clarity on liquid staking, continues to influence market behavior and altcoin performance, particularly for tokens like LDO. According to Coinbase, LDO's recent 58% growth followed a SEC statement on liquid staking, indicating that such activities do not constitute a sale of securities if they are primarily ‘ministerial’ and rewards are transmitted one-for-one from the protocol.
Given the market shifts and increasing institutional interest, Coinbase predicts that altcoins may take a more prominent position in the cryptocurrency market in the near future.
