Coinbase believes crypto markets could also be on the cusp of a full-scale altcoin season, with institutional demand for Ethereum taking part in a central position and a possible Federal Reserve charge lower in September setting the stage for retail inflows.
In its August analysis outlook printed Thursday, the change mentioned the market has largely adopted the trail it predicted earlier this 12 months, when it anticipated new highs within the second half of 2025. Stronger-than-anticipated macro situations and clearer regulatory frameworks have helped gasoline that momentum.
Bitcoin’s market dominance has slipped from 65% in Might to about 59% in August. Coinbase mentioned the decline factors to the early levels of capital rotation into altcoins. On the similar time, altcoin market capitalization has jumped greater than 50% since July to $1.4 trillion.
Altcoin Season is coming
As September approaches, the transition to a full-scale altcoin season is probably going.
Our optimistic 3Q25 outlook stems from macro traits reminiscent of potential Fed charge cuts and anticipated regulatory developments.
Extra key themes on this Month-to-month Outlook report ↓— Coinbase Institutional
(@CoinbaseInsto) August 14, 2025
ETH Market Cap Jumps 50% Since July on Treasury Buys
The Altcoin Season Index, a metric that tracks whether or not alts are outperforming Bitcoin, stays within the low 40s, under the 75 threshold that indicators a full rotation. Nonetheless, Coinbase famous that situations are aligning for a broader rally as September approaches.
Ethereum has been the principle beneficiary of this shift. Its market cap has grown 50% since early July, powered by demand from digital asset treasuries and a rising narrative round stablecoins and real-world belongings.
Bitmine Immersion Applied sciences alone has acquired 1.2m ETH after elevating $20b, with capability to buy $24.5b value. The agency has overtaken Sharplink Gaming, the previous chief amongst Ethereum-focused treasuries. Collectively, prime institutional holders now management almost 3 million ETH, about 2% of the availability.
Supply: Coinbase
Tokens linked intently to Ethereum, together with Arbitrum, Ethena, Lido DAO and Optimism, have all moved in line with ETH. Of those, solely Lido has rallied sharply, gaining 58% this month.
Coinbase mentioned Lido’s rise mirrored each its publicity to ETH and a US SEC employees assertion earlier in August that liquid staking tokens are usually not securities beneath sure situations.
Alt Season Not Absolutely Right here, However Circumstances Are Constructing
Whereas institutional flows dominate the ETH story, Coinbase mentioned retail capital can be ready to maneuver. Greater than $7.2 trillion at present sits in US cash market funds, the biggest stockpile on document.
These balances characterize what the agency referred to as “missed alternative prices” brought on by excessive conventional valuations, commerce uncertainties and lingering doubts about progress. It expects the upcoming Fed cuts to scale back the enchantment of cash market funds and redirect capital into crypto and different danger belongings.
The agency’s liquidity index, which tracks stablecoin issuance, buying and selling volumes, orderbook depth and free float, has additionally begun to get well after six months of decline. Coinbase mentioned that is an early signal that liquidity is returning to the crypto market.
“Our 3Q25 outlook stays constructive, although our view on an altcoin season has developed,” the report mentioned. “The current lower in Bitcoin dominance suggests an early rotation of capital into altcoins moderately than a full-scale altcoin season at this stage.
With the Fed anticipated to ease in September and the SEC signaling flexibility round some token fashions, Coinbase mentioned the situations for a deeper altcoin season are starting to fall into place.
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