Four Years of Bitcoin Dominance: Why 2021 Marked the End of the Alt Season

As we examine the cryptocurrency landscape, the 2025 cycle has unveiled some significant market trends and differences.

Key Takeaways

Bitcoin has historically surged after halving events, but 2025 deviated from that pattern, closing the year down 6%.
The total market cap for altcoins has seen four consecutive years of decline compared to Bitcoin, indicating the end of the altcoin season.
Bitcoin's dominance has increased from about 40% in 2022 to over 60% in 2025, signifying its growing influence in the market.
In 2021, altcoins experienced a massive rally, with a notable 541% increase in market cap, marking the peak of altcoin season.
Currently, rising funding rates and a shift in market dynamics have made altcoins more vulnerable to volatility.

4 years of Bitcoin winning - Here’s why 2021 was the last alt season!

Analyzing the 2025 Cycle: The Shift in Market Dynamics

Bitcoin (BTC) has traditionally enjoyed strong rallies following each halving, with the first four cycles characterized by a balance of supply scarcity and demand excess. However, in 2025, Bitcoin closed the year with a 6% loss, breaking this established trend.

Altcoins are experiencing a similar divergence. The market cap of the broader altcoin space, represented by TOTAL3 (excluding BTC and ETH), marked its fourth consecutive year of decline relative to Bitcoin. This trend effectively concludes what many have termed an "altcoin season," which has been diminishing for four years.

BTC altcoins Source: TradingView (TOTAL3/BTC)

This ongoing divergence points to Bitcoin’s increasing market dominance. Bitcoin’s dominance, indicated by BTC.D, has witnessed four successive upward trends, jumping from around 40% in 2022 to over 60% in 2025. This represents an impressive 100% gain in market cap, translating to roughly $900 billion added to Bitcoin's valuation.

Over the same timeframe, the overall market cap rose to $1.11 trillion, meaning that nearly 80% of the new capital was funneled into Bitcoin. This raises an important question: Is the concept of an altseason now a relic of the past?

Reflecting on the 2021 Rally: Indicators of a Key Altcoin Season

Revisiting the 2021 cycle, it was the epitome of an altcoin season.

By the end of 2021, Bitcoin’s market cap had increased by 64%, surpassing the notable $1 trillion mark. However, during the same period, TOTAL3 showed extraordinary performance, soaring by an impressive 541%.

This surge led to a peak in the Altcoin Season Index, confirming a robust altcoin season with significant capital flowing into the altcoin market. Yet, since then, Bitcoin has resumed its dominance. What’s the real reason behind this transformation?

TOTAL3 Source: TradingView (TOTAL3)

The underlying answer is straightforward: altcoin funding rates have surged.

In simple terms, there is an oversaturation of leveraged long positions in altcoins, which may seem bullish at first glance. However, this situation has placed altcoins in a precarious position, susceptible to volatility. Even minor fluctuations can trigger a wave of liquidations.

With Bitcoin's rising dominance, altcoins are now highly exposed to dramatic price swings. Thus, the evidence showing a growing divide between Bitcoin and altcoins suggests that 2021 was likely the last significant altcoin season.

Final Thoughts

In conclusion, the cryptocurrency landscape is shifting, with Bitcoin solidifying its position at the forefront. As we move forward, understanding these trends will be crucial for navigating the evolving market.