Expect a ‘massive altcoin season’ once bitcoin dominance hits 65%

HashKey Capital’s Jupiter Zheng highlighted three success areas he’s watching: Ethereum, Solana and certain tokens in DeFi

article-image

Nimoii/Shutterstock modified by Blockworks

share

We’ve asked ourselves one question over and over again: Wen altcoin szn?

To be fair, David’s done a very good job of setting up what it would take to see the next altcoin season take off. But to get some clarity on how bullish folks should be, I turned to HashKey Capital’s Jupiter Zheng. 

Zheng and David see eye-to-eye when it comes to when we could see the next altcoin season, with HashKey putting together a report on why the team is so bullish on altcoins right now. 

Part of it is the potential for bitcoin’s dominance to peak, which — if you’re a regular Empire reader — you know is one of the necessary ingredients for altcoins to take off. 

Once we get that bitcoin dominance over 60% or even 65%, that’s when Zheng expects a “massive altcoin season” to begin. BTC dominance is currently sitting at 61.64%.

Zheng highlighted three success areas he’s watching: Ethereum, Solana and certain tokens in DeFi, such as UNI and SKY (formerly MKR). 

Let’s start with Ethereum, especially because it feels like more and more people are dropping off the bull train right now. 

There are three factors bringing down Ethereum, HashKey argued: Increased competition (duh), value diversion and lower transaction fees. 

A look at past altcoin seasons courtesy of HashKey

“Currently, the Ethereum community is developing metrics to measure ‘Ethereum alignment,’ and it is anticipated that best practices will emerge from these efforts, further consolidating Ethereum’s ecosystem and ensuring long-term success,” the report stated.

As for Solana, it’s a “major fundamental play,” unlike Ethereum’s role as the “distressed play.”

“Solana has been achieving a lot of things this year, and — compared to Ethereum — Solana is a little bit centralized, but it’s very efficient. So, Solana is strong in its operational capabilities. Ethereum is more focused on the tech …  technical layers and decentralized layers and security layers, but Solana is more focused on how to deliver mass adoption,” Zheng explained to me.

And to add to that, Zheng believes it’ll be the next coin to be selected for an ETF following the ETH and BTC funds.

To round it out, “many DeFi projects from the last cycle have gradually become foundational infrastructure and have crossed cycles, forming a ‘must-have’ landscape,” HashKey wrote. 

But it’s not all bulls and daydreams, there are a few things that Zheng’s not feeling so optimistic about. 

Layer-2s for example. There can only be so many that investors can focus on. And, even beyond that, only the “top 5 or top 10 will be valuable,” he explained. 

To solve this, he has a suggestion: “If we try to select the best layer-2s from the 100 [on offer], It’s quite hard, so maybe just pick the top ones, just like we picked the Magnificent Seven from the US stock market.”

Who wants to pick the name?

Updated Nov. 22, 2024 at 11:45 am ET: Replaced mentions of Hashkey with Hashkey Capital.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (8).png

Research

Meta-aggregators like Titan and Kamino Swap improve price execution for users, making the Solana swapping landscape more competitive. Jupiter has incorporated meta-aggregation features into its latest routing engine to keep users on its front end (own the user, own the flow). At large, teams are treating swaps as a commoditized complement, offering incredibly cheap or free swaps to own the end-user and increase demand for high-margin product offerings (multi-product DeFi). On another note, the divergence in the concentration of aggregator volume between DEXs suggests increased specialization at the DEX layer by asset type.

article-image

Investors moved to safe assets like the US dollar and gold, but bonds faltered

article-image

The Amex offers up to 4% bitcoin back, but the deal is a bit ironic considering crypto’s goals

article-image

Short answer: Subnets are now cheaper to bootstrap than a Celestia rollup

article-image

Few things are more cypherpunk than keeping keys in your brain wallet

article-image

Many community banks and credit unions feel like they missed the fintech craze — and they don’t want to miss stablecoins

article-image

BlackRock COO Rob Goldstein noted that the firm had been looking into crypto since 2017