The chief executive of blockchain intelligence platform CryptoQuant believes a potential incoming altseason will not be like prior ones for one key reason.
On-chain analyst Ki Young Ju tells his 381,200 followers on the social media platform X that, unlike past cycles, liquidity can no longer flow at the same levels from Bitcoin (BTC) into altcoins, sending them soaring.
The analyst says there is now massive traditional finance participation in Bitcoin, including through spot market BTC exchange-traded funds (ETFs) and increased buying by software company MicroStrategy (MSTR).
“This alt season won’t be what you expected. It’s going to be weird and challenging. Only a chosen few will win the game. Market sentiment is good, but there isn’t much fresh liquidity. Bitcoin is drifting away from the crypto ecosystem. Bitcoin has built its own paper-based layer-2 ecosystem through ETFs, MSTR, funds and more. In this paper-based L2 Bitcoin bridging to other altcoins is impossible.”
He also shares a chart showing Bitcoin’s price correlation with alts. A score of 1 is the highest correlation, whereas the lowest correlation possible is 0.
“Altcoins used to move together based on their correlation with BTC, but that pattern has now broken. Only a few are starting to show independent trends as they attract new liquidity.”
The analyst notes that spot market BTC ETFs have accumulated as much as is believed to have been mined by Bitcoin’s pseudonymous founder Satoshi Nakamoto in the early days of the cryptocurrency’s existence.
“Bitcoin spot ETFs now hold as much BTC as Satoshi Nakamoto (Patoshi).”
He also says that investor demand for the ETF product is returning to its historical high.
“Bitcoin ETF demand is as strong as at their initial approval this year.”
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