Altcoin cycle still alive, but masked by BTC and ETH dominance

Hayes said the widespread belief that an altcoin season has yet to begin stems from expectations shaped by earlier market cycles, when price action tended to move sequentially from Bitcoin to Ethereum and then into smaller tokens. This time, he said, price increases in altcoins appeared in shorter bursts and in a narrower set of assets, leaving much of the market behind.

In recent comments in December 2025 podcast, Hayes argued that traders continued to wait for a broad-based rally across most altcoins, similar to previous cycles, even as capital was already rotating into select tokens. As a result, investors who held positions in assets tied to past narratives often saw limited returns while other parts of the market repriced quickly.

Since the 2022 market downturn, the flow of capital within crypto has become more concentrated. Bitcoin and Ethereum have absorbed a larger share of inflows, reinforced by the growth of exchange-traded products that channel institutional demand directly into the largest assets. This shift, Hayes said, reduced the scale of capital rotating outward into the broader altcoin market.

Liquidity that does move beyond Bitcoin and Ethereum has tended to target specific segments rather than lifting the market as a whole. Hayes pointed to risk-on pockets where capital flowed into tokens linked to high-activity blockchains, trading venues, and sectors viewed as immediate beneficiaries of renewed speculation. Traders relying on broad exposure missed these moves, he said.

Arthur also noted that Bitcoin dominance remained elevated for longer than many expected, limiting Ethereum’s traditional role as a stepping stone for capital moving into smaller assets. Without that intermediate rotation, altcoin gains appeared fragmented and harder to identify.

The gap between trader positioning and actual liquidity flows has fueled the perception that altcoins have underperformed. Hayes countered that returns have been concentrated rather than absent, with price action favoring assets that aligned closely with available liquidity and active narratives.