TL;DR:
- Over $800B has shifted from altcoins to Bitcoin, signaling a major liquidity exodus.
- Analysts warn this capital flight could permanently reshape the altcoin market.
- Rising Bitcoin dominance and ETF inflows are driving the ongoing imbalance.
The altcoin market is facing a deep liquidity squeeze after roughly $800 billion in capital migrated into Bitcoin, according to research from 10x Research. The firm’s latest report paints a stark picture of a crypto ecosystem increasingly dominated by Bitcoin as institutional investors and ETFs absorb a growing share of global crypto liquidity.
Bitcoin’s gravitational pull tightens
10x Research estimates that $800 billion has been drained from altcoins into Bitcoin since early 2024, intensifying concerns that smaller cryptocurrencies may never recover the lost liquidity. This shift comes as Bitcoin’s market dominance continues to climb, now exceeding 60%, boosted by strong institutional inflows through spot ETFs and corporate treasuries seeking stability in an uncertain macroeconomic climate.
The report warns that this reallocation may mark a structural change, not a temporary rotation. Altcoins, which rely heavily on speculative momentum and deep liquidity, are now struggling with thinner order books and widening spreads. “This capital shift could be permanent,” said 10x Research analysts, noting that Bitcoin’s appeal as a store of value is consolidating its status as the “reserve asset” of the digital economy.
Institutional preferences and regulatory clarity are compounding the trend. With clearer frameworks around Bitcoin ETFs and custodial security, large funds are opting for BTC exposure rather than navigating the fragmented altcoin landscape. Meanwhile, DeFi projects and Layer 1 tokens are witnessing a slowdown in network activity, as retail participation remains subdued amid declining volatility.
The implications extend beyond price dynamics. Analysts say the liquidity drought could accelerate consolidation in the altcoin sector, forcing projects to rethink tokenomics and utility. As Bitcoin continues to attract both traditional and crypto-native capital, 10x Research concludes that “the era of easy liquidity for altcoins may be over — and it might be forever.”
