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Bitcoin is cooling off after hitting an all-time high of $124,000 last week. Ethereum has also retraced, consolidating near its previous cycle peak of $4,800 — a level not seen since the historic bull run of 2021.
With Q4 just two weeks away, investors are beginning to ask the perennial question: is an altcoin season (or “altseason”) around the corner? Traditionally, this is the time when capital rotates from Bitcoin and Ethereum into smaller-cap tokens, sparking euphoric rallies across the market. But this cycle feels different, and the question dominating crypto circles is: will there even be an altseason?
Historically, altseasons have been fueled by excess liquidity, retail speculation, and the search for “the next big thing” once BTC and ETH have already established strong uptrends. In 2017, it was ICO mania that propelled obscure projects into the stratosphere. In 2021, it was the explosion of DeFi and NFTs that drove the rally.
This time, however, the dynamics have shifted. Institutional inflows into Bitcoin ETFs have anchored BTC as the primary liquidity sink, while memecoins have absorbed much of the speculative excess that might otherwise have flowed into mid-cap altcoins. In fact, Ethereum’s performance relative to Bitcoin (ETH/BTC) has been on a steady decline since December 2021, only recently showing signs of stabilization.
If not for MicroStrategy (Nasdaq: MSTR) sparking the trend of digital asset treasury companies (DATs), this cycle might already feel like a bear market. These DATs have not only been accumulating Bitcoin but have also turned their focus to Ethereum, with buying patterns reminiscent of the ICO craze in 2017.
BitMine (NYSE: BMNR) launched its ETH treasury strategy just two months ago and has since acquired roughly 1.5 million ETH — valued at around $6.5 billion. SharpLink Gaming (Nasdaq: SBET), which entered the market around the same time, has accumulated approximately 1.1 million ETH (~$5 billion). But the phenomenon extends well beyond BTC and ETH.
New DATs are springing up across global equity markets, each designed to acquire specific cryptocurrencies. CEA Industries (Nasdaq: BNC) is accumulating Binance’s BNB, Verb Technology (Nasdaq: VERB) has launched a strategy focused on TON, and Mill City Ventures (Nasdaq: MCVT) has positioned itself around SUI.
These publicly traded DATs act as liquidity sinks for their chosen tokens, with capital inflows often driving up the underlying assets. But their investor base is largely composed of hedge funds and institutions seeking exposure where ETFs are unavailable, or looking for leveraged plays. As such, most flows are likely to remain concentrated in large-cap tokens with strong fundamentals, broad distribution, and deep market history.
Crucially, the sustainability of these inflows depends on whether DATs can maintain a meaningful mNAV premium — a metric comparing the value of the company’s stock to the value of its underlying digital assets. Should that premium shrink, their ability to raise additional capital through equity or debt issuance will diminish, limiting future buying power.
For now, gains from DAT-driven flows are unlikely to recycle back into the broader crypto market before this cycle resets. This leaves tens of thousands of smaller and mid-cap projects competing for a far more limited pool of retail capital — much of which has already been drained by memecoins and leveraged trading. Only the strongest will survive.
Still, the biggest forces shaping this cycle are not internal to crypto at all, but macroeconomic. Geopolitical stability, inflationary pressures from tariffs, and the Federal Reserve’s policy stance will ultimately determine whether capital continues flowing into risk assets like crypto. If conditions align, select cryptocurrencies may once again deliver life-changing wealth to early backers. But the era of “a rising tide lifting all tokens” is behind us. This cycle demands discernment, caution, and a sharp eye for fundamentals.
Disclosure: The author holds positions in BTC, ETH, Nasdaq: BNC, Nasdaq: VERB, Nasdaq: MCVT, as well as various memecoins and other cryptocurrencies not mentioned in this article.
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