Institutional investors could be blocking the path for altcoin season
Bybit analysts think that the entrance for such a large institutional crowd has changed the way capital flows in crypto
Bitwise chief investment officer Matt Hougan | Ben Solomon Photo LLC for Blockworks
This is a segment from the Empire newsletter. To read full editions, subscribe.
I’m going to be honest with y’all: I’ve been down bad with the flu this week but from where I’m sitting, CT’s vibes are still off.
And, unfortunately, Bitwise’s crypto asset sentiment index is echoing the same vibes we’ve picked up on.
Everyone’s left wondering — unless you’re David — where altcoin season is and if it’s even possible at this point. (If you didn’t read yesterday’s Empire, then you’re in for a somewhat optimistic surprise about altcoin season’s potential.)
Is this potentially a sign that we’re still early in the cycle? Perhaps, given that historically altcoin season comes at the tail end of the bull market, but we can’t ignore that things are different this time around.
For Bybit, one potential difference is the institutional entry because they’ve changed the way that capital has traditionally flown. And, to add to that, Bitwise’s Matt Hougan said that the institutional sentiment in crypto is “the most bullish I’ve ever seen.”
But those institutional investors? They’re not going to swap out their bitcoin holdings for altcoins even with a friendlier regulatory environment, which could explain some of the down bad energy we’re seeing.
Though Bybit’s not willing to throw in the towel just yet, with analysts noting that “robust stablecoin supply growth and record exchange volumes point to ongoing retail engagement, suggesting that while the script may have changed, an altseason-like frenzy could yet materialize if the right confluence of events aligns.”
This could be likely, especially when looking at Robinhood’s earnings from last night. Revenue from crypto trading in its last quarter surged 700%.
I obviously have to caveat that this data is from the prior quarter before we saw the market selloff, but I don’t think that actually makes a huge difference here.
The point remains that retail has come running back.
Vibes are one thing, but data is another and I’m more inclined to lean into the data personally.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
