HashKey Capital: Altcoin Season Is About To Begin
In Brief
HashKey Capital released a market analysis highlighting the key factors potentially driving the altcoin resurgence.
Hong Kong-based digital asset group HashKey Capital released a market analysis highlighting the key factors to keep an eye on ahead of the altcoin resurgence.
The firm notes that historically, increasing dominance of Bitcoin, rising to between 62% and 70% often marks the start of an altcoin season afterwards. As Bitcoin gains market share early in a market cycle, capital typically starts to flow into altcoins once Bitcoin’s dominance begins to wane. This shift creates opportunities for altcoins, as investors tend to pursue assets with higher risk and potential for greater returns.
Another important factor driving this trend is the correlation between Bitcoin’s price surge and the performance of exchange-traded funds (ETFs). When crypto-native funds lead the rally, capital tends to rotate out of Bitcoin and into altcoins. However, if ETFs are the primary drivers of the market, capital is less likely to flow into altcoins because mainstream investors often lack direct access to them. In these cases, funds are more likely to move into other crypto-related stocks, which operate in a different space.
A critical aspect is investor risk appetite. In order to fuel an altcoin rally, two risk preferences must be addressed. First, investors generally prioritize profitability, and given that cryptocurrency institutions have seen limited profits, there has been a growing reliance on Bitcoin. Furthermore, the altcoin sector has been underperforming, with few projects standing out.
To shift the focus back to altcoins, Bitcoin needs to see further price increases. Current Bitcoin price levels are not sufficient to offset losses in altcoins. Analysts are predicting that Bitcoin must surpass the $80,000 mark for altcoins to regain momentum.
Moreover, emerging sectors such as Ethereum (ETH), Solana (SOL), Real World Assets (RWA), AI, and Decentralized Physical Infrastructure Networks (DePIN) need to demonstrate strong performance. Recent quantitative easing measures in both the US and China have helped improve risk appetite to some extent. However, it still remains the most considerable challenge in the current market.
HashKey Capital Emphasizes Investment Rationale Behind Altcoins
HashKey Capital observes that Ethereum’s current underperformance can be attributed to several factors, including increased competition among blockchains, lower transaction fees, and the rise of Layer 2 solutions, which divert value away from Ethereum’s core network. It is anticipated that Ethereum’s performance will remain subdued until it enters a deflationary phase.
HashKey Capital also views Solana as a key player in the market. Solana operates without the need for Miner Extractable Value (MEV) or Layer 2 solutions, concentrating value within its Layer 1 tokens. Rising activity on the Solana network has led to higher transaction fees, signaling increased usage and adoption. Solana is building a strong narrative in the cryptocurrency space, particularly within the meme community, and is gaining institutional trust due to its focus on high network activity.
Additionally, the firm highlights the potential of Chainlink, which has made substantial progress, securing a Total Value Secured (TVS) of approximately $25 billion—about half of its peak value. Despite this, the price of LINK remains at only 25% of its all-time high, suggesting considerable underlying value. As the largest oracle provider, Chainlink is well-positioned to capitalize on the growth of RWA projects, which are rapidly emerging in the sector.
HashKey Capital also notes the potential for narrative-driven altcoins, including those focused on AI, RWA, DePIN, and memecoins.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
