TL;DR
- Sygnum confirms altseason ignition as Bitcoin dominance collapses 6% in weeks, with regulatory clarity redirecting billions toward utility-driven altcoins and sustainable token economies.
- Bitcoin ETFs hit $160B AUM while Ethereum stakes 30% of liquid supply post-Pectra upgrade, attracting $1B+ institutional allocations and Wall Street tokenization projects.
- DEXs capture 30% of spot volume ($530B) and DeFi lending surges to $70B TVL, signaling a self-sustaining altcoin ecosystem fueled by leverage and real-world asset adoption.
Swiss digital bank Sygnum has sounded the altseason alarm, declaring capital is flooding into altcoins as regulatory breakthroughs shatter institutional hesitations. Its Q3 2025 Investment Outlook reveals Bitcoin’s dominance plunged 6% in weeks amid surging altcoin liquidity, DeFi’s record-shattering growth, and Ethereum’s staking metamorphosis.
This tectonic change indicates that the “Great Crypto Rotation” is speeding up, as projects with real-world applications are taking in billions that were once stuck in Bitcoin’s influence. Geopolitical fears once crushed alts, but Sygnum confirms “sustainable token models and regulatory clarity” now override macro anxieties, igniting the long-anticipated altcoin supercycle.
Regulatory Spring Unlocks Altcoin Floodgates
The SEC’s landmark clarification that protocol-level staking escapes securities classification has dismantled institutional barriers. Combined with precise tokenomics frameworks emerging globally, capital now targets “projects with real economic use cases,” Sygnum emphasized.
Bitcoin reached its highest dominance of 58.3% in May during trade wars, but then it fell as altcoins recovered. This regulatory spring thaw coincides with memecoin manias funneling retail liquidity into overlooked ecosystems, creating a perfect storm for altcoin revaluation.
Bitcoin’s Bullish Bedrock Fuels Alt Expansion
Despite rotation, Bitcoin’s foundations remain unshaken. Spot ETFs now hold $160B AUM after swallowing 110,000+ BTC last quarter. This demand tsunami propelled BTC to $123,000 ATHs in July. “The supply-demand imbalance is structurally bullish,” Sygnum noted, framing Bitcoin not as competition but as the rising tide lifting all crypto vessels. With ETF inflows averaging $1.2B weekly, Bitcoin provides the liquidity runway for altcoin breakouts.
Ethereum: Staking Revolution Attracts Wall Street
After the Pectra upgrade, Ethereum “conclusively broke its long-term downtrend.” Nearly 30% of ETH’s liquid supply is now staked. Wall Street’s embrace intensifies: SharpLink confirmed a $1B ETH allocation, while BNY Mellon and Société Générale launch tokenization projects alongside a Trump-endorsed stablecoin on Ethereum.
The SEC’s staking exemption has transformed ETH into institutional-grade yield infrastructure, with liquid staking derivatives surpassing $120B TVL.
DeFi & DEXs Shatter Ceilings in Rotation Surge
DEXs captured 30% of all crypto spot volume last quarter, a historic $530B milestone fueled by Solana’s PumpSwap dethroning Raydium and PancakeSwap’s BNB Chain dominance.
Simultaneously, DeFi lending vaulted to $70B TVL, with Ethereum-based loans hitting records as leverage demand explodes. “DeFi isn’t ancillary; it’s the engine of altseason,” Sygnum declared, noting real-world asset tokenization and on-chain derivatives drive 65% of activity.
