Altcoin Buzz Slows as Institutional Investors Set Bitcoin Targets

Highlights:

• Altcoins are crawling compared to Bitcoin and their performance in the last bull season.
• Institutional demand and macro factors have pushed Bitcoin prices to new all-time highs. 
• Donald Trump’s win at the US Presidential polls also increased Bitcoin’s dominance in the crypto market. 

Altcoins have seen only a percentage of previous gains with new crypto investors setting sights on fundamentals. The maturity of the digital asset market over the years led to the status quo, with more flows moving towards Bitcoin. A new Bloomberg report shows the drifting correlation compared to other bull cycles.

According to the report, while Bitcoin hit multiple all-time highs this month, several altcoins hit that target. In previous cycles, these assets outperform Bitcoin and make huge corrections due to high volatility. Altcoins tend to rebound into the altcoin season which can spring up towards the end of bullish swings.

Institutional Bitcoin Sentiments Slows Altcoins

Amid macro sentiments, the inflows to Bitcoin can determine the market’s direction. While an upward trajectory for crypto leaders is good for the overall health of assets, present figures are taking another turn. Bitcoin price gained traction in the last 30 days taking up altcoins and meme coins.

While altcoins have seen increasing inflows this month amid Bitcoin’s record-breaking rally, the shadow of the 2021 crypto bubble still hangs over much of the sector. https://t.co/uogLWhySqR

— Bloomberg Crypto (@crypto) November 27, 2024

However, excess institutional capital in Bitcoin will lead to a disparity, as seen in the past couple of weeks. BTC soared above 93K, while Ethereum has failed to reach its previous highs. The approvals of spot Bitcoin ETFs remain a major factor in the present price cycle. 

The Jan 11 approval opened up a new window for traditional investors. Although Ethereum products received the SEC’s green light, other altcoins need a similar institutional push to soar to new all-time highs. Bitcoin dominance has grown to 57% while Ethereum ranks at 12.9%. Whale inflows to ETH are necessary for a full-scale altcoin season.

Potential US Policies Adds to Bitcoin Drive

Donald Trump’s win in the US Presidential election spiked Bitcoin sentiments. The Republican candidate was hailed as a pro-Bitcoin candidate, rolling out several promises and clear rules. The Biden administration’s crypto policy slowed growth, with investors setting sights on new milestones. 

Senator Cynthia Lummis proposed the Bitcoin Act, which would lead the US government to acquire 1 million BTC if passed. CoinShares James Butterfill noted that this will lead to a Bitcoin resurgence.

Butterfill said:

“It will just be different this time and that’s partly because there’s still a lot more potential positive price effects on the political dividend, the election dividend, particularly around the BITCOIN Act. If  that gets enabled, I think that will lead to resurgence in the Bitcoin dominance.”