‘Trickle-Down Effect Ends’... Altcoin Winter Continues Amid Institutional-Led Market [Crypto Briefing]

[Financial News] The overall Altcoin market, excluding Bitcoin (BTC), remains in a bearish phase. The Altcoin Season Index has stayed in the high 30s, with most Altcoin returns trailing those of Bitcoin (BTC). Analysts point to the inflow of institutional funds through Exchange-Traded Funds (ETF) and the fundamental limitations of Altcoin projects as key factors.
According to Coinglass, a digital asset data platform, the Altcoin Season Index stood at 39 as of the 31st. This means that only about 39% of the top 100 Altcoins by market capitalization have outperformed Bitcoin (BTC) over the past 90 days.
The Altcoin Season Index measures the percentage (0–100) of the top 100 Altcoins by market cap that have outperformed Bitcoin (BTC) in the last 90 days. The Upbit Altcoin Index also plunged 38% over the past three months, recording 3,910.93.
A major reason for the lack of an Altcoin rally this year is the change in the nature of capital flowing into the market. Hyeon Kyeong Yang, a researcher at iM Securities, explained, “In the past, Altcoin bull markets were fueled by speculative retail funds rotating from Bitcoin (BTC) to Altcoins. Recently, however, the inflow structure has shifted to focus on Digital Asset Financial Companies (DAFC), institutional investors, and ETFs.”
In particular, funds entering through spot Bitcoin (BTC) ETFs are being reallocated during Bitcoin (BTC) corrections to traditional assets such as Artificial Intelligence (AI)-related stocks, gold, and silver ETFs, rather than to Altcoins. According to Samsung Securities, there was a net outflow of about $780 million from spot Bitcoin (BTC) ETFs recently, yet Bitcoin Dominance actually increased.
The fundamental limitations of Altcoin projects themselves have also been cited as a major reason for the weakness. Most Altcoin projects have failed to clearly demonstrate viable revenue models or practical use cases. Yang noted, “Previously, price increases were possible based on new technology narratives and expectations, but now more practical standards such as technological maturity, real-world utility, and regulatory compliance are required.”
The outlook for Altcoins remains bleak into the new year. The trickle-down effect, where funds flow from Bitcoin (BTC) to Altcoins after a Bitcoin (BTC) rally, is now seen as unlikely. A Tiger Research official emphasized, “As the digital asset market becomes more institutionally driven, capital flows have become more conservative. Institutions are avoiding unverified assets and focusing on major assets such as Bitcoin (BTC) and Ethereum.” The official added, “Over 85% of projects listed this year have experienced price declines, and those relying solely on short-term trends are quickly being pushed out by new trends.”

elikim@fnnews.com Kim Mi-hee Reporter