Cardano bets $100 million Bitcoin: Is alt season threatened?

Traders are waiting for a stronger and broader bullish rally of altcoin but may face significant disappointment.

According to Bitwise's Head of Strategy Alpha, Jeff Park, and Blockstream founder, Adam Back, the sector may be affected by protocols jumping into the Bitcoin treasury frenzy. In a post on X, Park stated:

"The disappointing altcoins are abandoning their own assets to build BTC reserves not included in my 2025 plan. The world is recovering."

The reason for such a statement is to respond to the proposal by Cardano founder Charles Hoskinson regarding the swap of 100 million ADA for Bitcoin as part of the treasury diversification process.

Altcoin and Bitcoin

For Adam Back of Blockstream, Cardano's move will reinforce BTC and drive the collapse of the altcoin market.

"Not only is the altcoin season canceled, but surrendering altcoins is inevitable. Insiders are liquidating to buy Bitcoin to have their own slush fund," he said.

On average, the larger altcoin market has decreased by 50% compared to BTC since the brief altcoin season in November of last year.

For example, the chart below tracks the total crypto market excluding the top 10 assets compared to BTC or the altcoin/BTC ratio, which has decreased since 2021.

Altcoin/BTC ratio | Source: TradingViewDespite the notable bullish trend at the end of 2023 and the end of 2024, this sector still struggles to surpass Bitcoin.

After the bullish altcoin surge at the end of 2024, Bitcoin's dominance only increased – a sign that most investors prefer BTC over altcoin.

Bitcoin Dominance Rate | Source: TradingviewNotably, the dominance rate of BTC has dropped to 55%, but then surged to 63%. In other words, more than half of the market is focused on Bitcoin, compared to the rest of the crypto market.

However, it is worth noting that some selected altcoins have seen remarkable performance, despite the rising dominance of BTC. In fact, the altcoin season index has remained below 30 since Q1, emphasizing that the first half of 2025 will be Bitcoin's season.

In addition, around 10 assets have outperformed BTC in investor returns over the past 90 trading days. Leading the list is Hyperliquid (HYPE), up +200% compared to BTC's 22%. Aave (AAVE), Monero (XMR), Bittensor (TAO), and Pepe (PEPE) along with other coins have also recorded relative strength compared to BTC.

Source: Blockchain CentreIn simple terms, Bitcoin is strengthening against most altcoins, evidenced by the rising dominance of BTC. However, there are some exceptions that have outperformed BTC by approximately 2-10 times over the past 90 days.

Therefore, despite the sluggish altcoin sector, there are still some that outperform BTC in terms of profits.

Minh Anh