TL;DR
- Altseason setup: Bitcoin dominance has fallen toward 59% while altcoin market cap is up more than 50% since July, with indexes rising but still below the 75% definition of a full rotation.
- Ethereum momentum: Coinbase places Ethereum at the center of the move, citing treasury demand, stablecoin activity, and real-world asset narratives as drivers of stronger participation and improving ecosystem breadth.
- Macro and liquidity: Softer inflation and high odds of a September rate cut could pull money off the sidelines as Coinbase’s liquidity index starts to recover from a multi-month dip.
Coinbase says the crypto market is tilting toward a full altcoin season as September nears, citing falling Bitcoin dominance, rising altcoin capitalization, and improving liquidity. In its August institutional outlook, research head David Duong says conditions are aligning for rotation, even though popular altseason indexes remain below their threshold. The firm also flags Ethereum as the core momentum driver amid growing treasury demand and yield narratives.
Altcoin Season is coming
As September approaches, the transition to a full-scale altcoin season is likely.
Our positive 3Q25 outlook stems from macro trends such as potential Fed rate cuts and expected regulatory advancements.
More key themes in this Monthly Outlook report ↓
— Coinbase Institutional 🛡️ (@CoinbaseInsto) August 14, 2025
Market signals
Bitcoin’s share of total crypto capitalization has slipped from over 65% in May to roughly 59% in August, which Coinbase views as early rotation into alts. The market cap of altcoins has increased by over 50% since early July, reaching around 1.4 trillion dollars by mid-August. Coinbase defines altseason as when at least 75% of the top 50 altcoins outperform Bitcoin over the prior 90 days.
Altseason gauges are rising but remain below signal levels. CoinMarketCap’s index is around 44, Blockchain Center’s is near 53, and CryptoRank’s is near 50, suggesting rotation is early.
Ethereum at the core
Coinbase singles out Ethereum as the hub of momentum, powered by growing demand from digital asset treasuries, stablecoin activity, and real-world asset narratives. Ethereum’s market cap has jumped roughly 50% since early July, and related ecosystems show improving breadth, even as leadership within that cohort remains uneven.
Macro backdrop and liquidity
Macro conditions may be the match. With United States inflation running at about 2.7% year over year in July and futures implying roughly 92% odds of a September Federal Reserve rate cut, Coinbase argues that falling yields could pull sidelined money into risk assets. Its internal liquidity index is also beginning to recover after a multi-month decline.
What could flip the switch
Coinbase’s constructive third-quarter view hinges on three elements that outside analysts echo. A friendlier macro backdrop, continued slippage in Bitcoin dominance, and a convincing new narrative have powered prior cycles, from the 2017 initial coin offering boom to the 2021 DeFi and NFT wave. For now, Coinbase frames the setup as early, not complete, but says the pieces for a broader altcoin phase are increasingly in place as September nears.
