Altcoins Gain Traction With Institutional Investors, But Challenges Remain

Bitcoin’s (BTC) market influence has declined slightly, resulting in a shift of funds towards altcoins. Glassnode reported on X that Bitcoin’s market capitalization dominance fell from 63.76% to 60.78% over the past week. This 2.98% point drop marks one of the largest weekly declines this year. #Bitcoin dominance fell from 63.76% to 60.78% over the past week – a 2.98 percentage point drop. One of the sharpest weekly declines this year, as capital rotated into altcoins. pic.twitter.com/aPpZtZsTQ9 — glassnode (@glassnode) July 22, 2025 Institutional Investors Show Interest in Altcoins At the time of writing, BTC dominance has gone up by about 0.5%, demonstrating a slight comeback after nearly hitting 60%. While this may be the case, some market analysts believe that recent data demonstrates institutional interest in altcoins . Mati Greenspan, CEO of Quantum Economics, told Cryptonews that while spot Bitcoin exchange-traded funds (ETFs) are seeing some outflows after an epic run , the industry is witnessing rising institutional interest in Ethereum (ETH), Solana (SOL), and Ripple (XRP). Greenspan explained that one of the most important metrics to watch to identify the onset of “altcoin season” is the Bitcoin dominance chart. This measures Bitcoin’s market value relative to the rest of the crypto space. “Just a month ago, Bitcoin dominance stood near 66%. As of Monday this week, it had dropped to nearly 60%, with most of that move happening over the past week,” Greenspan said. “The message is clear: after a prolonged period of consolidation into Bitcoin, altcoins are back in style.” Danny Nelson, analyst at Bitwise Asset Management, further told Cryptonews that Bitcoin’s recent rally and Ethereum’s recovery have renewed investor interest in some sectors of the altcoin market. “At Bitwise, we’re certainly fielding more questions on Cardano (ADA), Ripple, Polkadot (DOT), Solana, and other altcoins,” Nelson said. According to Greenspan, this is a sign that “mature capital is diversifying into broader blockchain infrastructure plays.” Altcoins Dominating the Crypto Market This appears to be the case, as altcoins like Ethereum are being bolstered by institutional inflows and successful spot ETH ETFs . Over the past several weeks, these ETFs have recorded positive flows totaling more than 100,000 ETH. A new research report from the Binance crypto exchange also shows that BNB hit a historic all-time high this week. The report notes, “BNB has shattered its previous all-time high of $794, decisively breaking the key psychological barrier of $800 to establish a new peak.” The report points out that this has pushed the token’s total market capitalization to $112 billion. According to Binance Research, a new wave of “BNB Treasury” strategies appears to be emerging among publicly traded companies. Corporations are apparently beginning to hold BNB as a reserve asset to enhance treasury returns, improve liquidity, and gain strategic exposure to the crypto ecosystem. According to Binance founder CZ, at least 30 teams are actively exploring this strategy. Source: Binance Research In addition, Cardano is becoming a leading platform in the decentralized finance (DeFi) space. The total value locked (TVL) in DeFi on Cardano surged from $1.2 billion to $2.5 billion this year. This week, Cardano’s ADA surged 1.31% as 2025 ETF approval odds rose to 90%, attracting institutional capital. Altcoin Interest Meets With Challenges Yet while institutional interest in altcoins is evident, Nelson remains somewhat skeptical. “I’m doubtful institutions are anchoring an upswing for altcoins,” he said. “Despite the great strides crypto’s taken in 2025, we haven’t yet reached a critical mass of understanding.” Altcoins are showing broad strength following #Bitcoin ’s lead, but surging open interest across the sector suggests speculative froth may be building, raising the risk of sharper volatility ahead. Discover more in the latest Week On-Chain below https://t.co/VgyjojciA6 pic.twitter.com/7fRdW4BgEU — glassnode (@glassnode) July 23, 2025 Even more importantly, Nelson remarked that the crypto industry doesn’t yet have the funnels that most institutional capital needs to flow into altcoins. He believes this won’t happen until the launch of additional altcoin exchange-traded products (ETPs). Jake Claver, CEO and Founder of asset management firm Digital Ascension Group, told Cryptonews that he thinks a large rotation for Bitcoin ETFs will eventually flow into XRP ETFs once approved. This may take longer than expected, though. For instance, while an XRP ETF approval was expected this week, the US Securities and Exchange Commission (SEC) abruptly reversed the approval for Bitwise Asset Management’s crypto ETF. Two theories from @JSeyff on why SEC holding up Grayscale & Bitwise crypto index ETFs… I lean towards the latter theory. Both of these were approved by SEC Division of Trading & Markets and then immediately stayed. Doesn't make sense. via @isabelletanlee @nicola_m_white pic.twitter.com/UdmGG6TF9H — Nate Geraci (@NateGeraci) July 23, 2025 On July 23, the SEC’s Division of Trading and Markets initially greenlit the Bitwise 10 Crypto Index Fund’s transition to an ETF, which would have marked the first US multi-asset spot crypto ETF. However, the decision was suspended by Assistant Secretary Sherry R. Haywood, citing the need for a full commission review under Rule 431. What’s Next For Altcoins? While it appears that a new altcoin season is underway, Greenspan commented that, as of writing, the crypto industry is seeing a noticeable pullback in many altcoins. “This is likely due to a correction after the massive run-up of the last week. Bitcoin has remained fairly stable in contrast, consolidating near its all-time highs,” he said. Alex Tapscott, managing director of Ninepoint Digital Asset Group, added that if Bitcoin dominance continues to decline, a true altcoin season will likely emerge. He also added that this may slightly mute Bitcoin ETF inflows as capital rotates into other assets. “Given crypto’s inherent reflexivity, flows into cryptoassets, whether from ETFs or public companies, are a net positive for the ecosystem,” Tapscott commented. “Access for investors to gain exposure to crypto has never been more democratized than it is today.” The post Altcoins Gain Traction With Institutional Investors, But Challenges Remain appeared first on Cryptonews .