Altcoin Seasons Over, Non-Traditional Cycles Ahead: Bitwise

What to Know

Altcoin seasons where every cryptocurrency rallies together are likely finished, according to Bitwise CIO Matt Hougan
Non-traditional cycles rewarding tokens with real-world traction will replace broad-based altcoin rallies
Bitcoin dipped to $60,000 in February but trades at $70,237, showing signs of bottoming
Altcoin social media mentions hit their lowest level in two years, per Santiment data

Altcoin seasons as the crypto market has known them are effectively over, according to Bitwise Chief Investment Officer Matt Hougan. In an interview on Wednesday, Hougan argued that euphoric rallies lifting every token indiscriminately have passed, replaced by non-traditional cycles benefiting only digital assets with genuine utility.

Are Altcoin Seasons Really Over?

Broad altcoin seasons where virtually every cryptocurrency surges together are not coming back, Hougan stated. The rotation from Bitcoin into Ether, then DeFi tokens, and finally speculative assets like NFT collectibles is no longer viable, he explained.

"I think that game is over. I think we'll see a non-traditional altcoin season," Hougan said. "An altcoin season that rewards assets with real-world traction and applications." Future cycles will see the market rerate specific tokens tied to what he described as huge businesses, making the next wave far more differentiated than previous ones.

The Bitwise investment chief emphasized that this upcoming cycle will be far more selective than any before it.

I don't think we'll see the sort of rising tide lifts all buckets where you rotate from Bitcoin to ETH to DeFi to NFT pictures of rocks.
— Matt Hougan, Bitwise CIO

Bitcoin Shows Signs of Recovery

Bitcoin, which fell as low as $60,000 during February, is starting to bottom and trend higher, according to Hougan. The flagship cryptocurrency was trading at $70,237 at the time of publication, per CoinMarketCap.

Traders have historically expected Bitcoin to hit new all-time highs first, then capital rotates into Ether and smaller altcoins, triggering a broad altcoin season. Hougan's thesis suggests this sequential pattern is breaking down in favor of selective rallies.

Industry Divided on Altcoin Outlook

The altcoin season debate has divided prominent crypto voices. Analyst Matthew Hyland argued in November that traders should remain confident an altcoin season was approaching, citing the Bitcoin dominance chart as bearish for many weeks.

BitMEX co-founder Arthur Hayes offered a contrarian view in December, declaring an altcoin season is always happening somewhere. "If you're always saying altcoin season isn't there, it's because you didn't own what went up," Hayes said.

Crypto sentiment platform Santiment reported on Wednesday that altcoin mentions on social media dropped to their lowest level in two years. Indicators suggest investors are concentrating on Bitcoin rather than rotating into smaller tokens. Roughly 38% of altcoins sit near all-time lows, worse than the FTX collapse aftermath, according to analyst data.