"Alt season may be less vigorous than in the past" - Signum's latest market analysis

## The structure of the cryptocurrency market is changing

The cryptocurrency bank Sygnum announced an analysis report on the altcoin market on the 25th.

In this cycle, it is suggested that the altcoin season is arriving late and is likely to be much milder than in previous cycles.

As a background, unlike in the past, there is a strong driving force behind Bitcoin (BTC) at present, and it was noted that the market structure is changing, increasing the role of traditional financial institutions.

Source: CoinMarketCap

According to CoinMarketCap, at the time of writing the article, Bitcoin's relative market share (Bitcoin dominance) in the entire cryptocurrency sector is 60.6%. Ethereum (ETH) accounts for 11.8%, while others make up 27.7%.

Bitcoin dominance has been on an upward trend since the end of 2022. Historically, it is viewed that when it clearly falls below the 60% range, the altcoin season arrives.

Signum pointed out that the recent slight decrease in Bitcoin dominance is partly due to the progress in the adoption of stablecoins and tokenization use cases, as well as favorable factors such as legal regulations and the entry of major financial institutions, which have increased the optimistic outlook for Ethereum and major Layer 1 projects.

What is a stablecoin?

A cryptocurrency whose price is always stable (stable). Stablecoins are a type of crypto asset, and unlike volatile assets such as BTC, ETH, and XRP, they are backed by the US dollar and aim to maintain their value. In addition to stablecoins backed by the US dollar (USDT, USDC), there are also stablecoins that use algorithms.

On the other hand, looking at each indicator, it is still far from suggesting the arrival of an alt season, and the inflow of funds into altcoins other than major coins has already seen some reversal.

This suggests that the market is still hesitant to make judgments and is reluctant to commit to projects other than those with high revenue growth rates.

As an example of a project with a high revenue growth rate at this time, Hyper Liquid is mentioned.

Signum pointed out that most of the new funds that have flowed into the cryptocurrency market over the past year and a half have been limited to investments in traditional products such as ETFs (Exchange Traded Funds) and cryptocurrency-related stocks.

Furthermore, it is stated that the current bull market is distinct from past markets that were dominated by the behavior of individual investors. It was suggested that the continued passive stance of individual investors could limit the potential for an altseason rise.

It was also argued that one potential factor that could change sentiment and fundamentals in the future is the clarification of regulations. The most important point mentioned is that there is a high likelihood that the Digital Asset Market Clarification Act (Clarity Act) will pass through Congress and be enacted within the next few months.

If this is realized, cryptocurrency projects will have a foundation to build and provide a strong tokenomics model without fearing lawsuits or regulatory penalties.

With the support of regulations from the SEC (U.S. Securities and Exchange Commission), it is expected that the speculation of tokens will decrease, making cryptocurrencies easier to invest in for traditional financial institutions.

Without such legal developments, it is possible that the catalyst for an altcoin season will be liquidity supply by central banks and others.