- Hedge funds expect Bitcoin’s dominance to rise in the next six months.
- The amount of managers who see Bitcoin’s command rising is triple from 2024.
- There’s three reasons behind the thesis.
A majority of hedge fund managers are banking on Bitcoin’s dominance to surge over the next year and kneecap the budding altcoin season many investors were hoping for.
That’s according to a new report by Crypto Insights Group, which surveyed 50 hedge fund managers with more than $5 billion under management.
Of those, 70% said they expect Bitcoin to decouple from the rest of the cryptocurrency market.
That’s triple the figure it was last year.
They bet that Bitcoin will strengthen its grip due to its higher liquidity and the interest institutions have shown in it over the past year, the report said.
Bitcoin dominates over 61% of the total $3 trillion crypto market. The expectations of that dominance to grow punctures analyst expectations that the market was on the brink of a “full blown altseason” at the end of 2024.
The term altseason refers to a period when interest and prices surge for cryptocurrencies that aren’t Bitcoin.
But with Bitcoin’s dominance expected to increase that means the top cryptocurrency will capture a larger percentage of the flows entering the crypto space — hurting the potential for altseason to come to fruition.
It’s a disheartening outlook for retail investors who’ve positioned themselves for a repeat of previous cycles where altcoin seasons usually come just months after Bitcoin reaches new highs.
Three reasons
Hedge fund managers outlined three reasons behind why Bitcoin’s dominance will continue to surge — and potentially blunt any altcoin season.
First, Bitcoin has shown remarkable resilience despite US President Donald Trump’s trade war. That suggests investors view Bitcoin as a safer haven than more speculative altcoins during macroeconomic uncertainty.
In fact, while tech stocks tumbled in the past week during an escalation of the crisis between the US and China, Bitcoin surged 11% to $93,500 — prompting some to say a “decoupling” is underway.
This means that investors might be increasingly viewing Bitcoin as a safe haven asset akin to gold.
The second reason is that regulatory certainty — such as Bitcoin exchange-traded funds and a US strategic Bitcoin reserve — seems to be pushing institutional investors to Bitcoin.
However, the polled hedge fund managers argue that this does not translate to more clarity for altcoins, which threatens to erode confidence.
Finally, there’s the altcoins themselves.
Just a few select tokens have enjoyed boons in their prices — such as Ripple-linked XRP and Solana — while the majority have fared unfavourably in comparison to Bitcoin.
This suggests that investors have been underwhelmed by the performance of altcoins, and therefore choose to buy Bitcoin, further ballooning its value.
Don’t kill altseason yet
To be sure, not everyone is convinced that an altcoin season won’t happen.
“A higher Bitcoin weighting doesn’t kill altseason,” Crypto Insights Group CEO Andy Martinez told DL News.
Instead, capital has become “more selective, funnelling into projects with tangible revenues, transparent treasuries and tighter emission schedules rather than every new ticker that lists.”
Martinez also said that odds are stacked against Bitcoin leaving the entire crypto space behind.
“A full decoupling is unlikely while stablecoin growth, on-chain credit and tokenisation keep the conversation framed around the wider digital‑asset stack.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
