Bitcoin Price Breakout — Is the Altcoin Rally Next?
In today’s Crypto for Advisors, Gregory Mall, chief investment officer from Lionsoul Global, writes about bitcoin’s current rally, and how it historically has and could potentially impact altcoins.
Then, Kevin Tam looks at crypto trends, 13-F filings and institutional adoption in Ask an Expert.
Bitcoin's Breakout — Is the Altcoin Rally Next?
On May 22, bitcoin (BTC) marked a historic moment, reaching a new all-time high, briefly surpassing the levels seen earlier this year. While prices have since consolidated, BTC remains within striking distance of its all-time high — a feat achieved despite lingering macro uncertainties, low trading volumes, and general market skepticism.
Meanwhile, most altcoins remain far from their respective all-time highs. As of early June, Ethereum (ETH) is still about 20% below its November 2021 peak, and Solana (SOL) sits more than 30% below its former highs. This divergence highlights what some market observers are calling the "most hated rally"—a quiet, low-participation surge in bitcoin that caught many off guard.
What Drove the BTC Rally?
Three key factors contributed to the recent BTC breakout:
Central Bank Optimism: Futures markets suggest that rate cuts from the Federal Reserve are likely in the second half of 2025, with the eurozone even further ahead—now on its seventh consecutive rate cut. This easing backdrop has revived risk appetite across assets, particularly among institutional allocators. With tariff fears in the rearview mirror, the overall inflationary outlook has significantly improved in recent weeks.
Institutional Inflows: Spot bitcoin ETFs, approved earlier this year, continue to absorb flows. While daily volumes have tapered from launch-week highs, net inflows have remained consistently positive, particularly from fee-sensitive RIA and private wealth channels. Year to date, cumulative inflows exceed $16 billion, with May recording the largest inflow this year. At the same time, MicroStrategy and other companies have continued to pile corporate treasury assets into bitcoin.
Easing Political Risks: Fading tariff tensions and improving global trade sentiment helped stabilize broader markets, allowing risk assets like bitcoin to resume their upward trend.
Despite these tailwinds, the rally occurred on relatively thin volumes.
BTC Dominance Rising — But History Rhymes
Bitcoin dominance — the percentage of total crypto market cap made up by BTC — has now climbed above 54%, up from about 38% in late 2022. Historically, BTC dominance peaks before altcoins begin to outperform. During the 2017 and 2021 cycles, altcoin rallies lagged the BTC all-time highs by two to six months.
Source: TradingView
If history holds, the rotation from bitcoin into altcoins may already be underway. ether's recent outperformance — posting an 81% rally since its April lows — is a sign that sentiment is starting to spill over from bitcoin to the altcoin market.
Altcoin Season Ahead?
While the term "altseason" is often thrown around carelessly, there are some real indicators worth watching:
Institutional Broadening: Allocators who entered BTC via ETFs are now evaluating broader exposure. Equal-weight or smart beta indexes that offer diversified exposure to Layer 1s, DeFi, and infrastructure tokens are gaining traction.
L1 Innovation and Narrative Cycles: Layer 1 ecosystems like Solana, Avalanche, and Near continue to develop real throughput improvements, which are increasingly relevant as user demand for on-chain activity returns.
DeFi Resurgence: As of early June 2025, the total value locked in DeFi protocols has surpassed $117 billion, marking a significant recovery from the April slump. According to DeFiLlama, the total value locked across all DeFi pools has increased by 31% since its April lows.
Risk Rotation: In traditional markets, as the bull market matures, investors rotate from large caps to small/mid caps. Crypto is no different. Bitcoin may be the starting point, but not the end.
A Word of Caution
Although there are significant diversification benefits associated with crypto investing, it is also fair to say that crypto is still behaving largely as a risk-on asset class. As highlighted by the latest OECD report, the global economic landscape is becoming increasingly fragile. Heightened trade restrictions, tighter credit conditions, declining business and consumer confidence, and persistent policy uncertainty are all weighing on growth prospects and increasing the risks of a sell-off of speculative assets that includes crypto.
Key Takeaways for Advisors
Expect Rotation: If prior cycles are a guide, altcoins may lag BTC but tend to rally with a delay. Advisors should consider this when rebalancing portfolios.
Diversification Matters: Equal-weight crypto baskets or thematic exposures (e.g., Layer 1s, DeFi) may help capture upside without betting on a single asset.
Stay Objective: While price action often drives client interest, fundamentals — from network activity to developer momentum — should remain the north star for allocation decisions.
Bitcoin's new all-time high is certainly a milestone. However, it may also be a signal: the next phase of the cycle could belong to the broader crypto asset class. Advisors who understand the timing and mechanics of market rotations are best positioned to guide clients through the next leg.
Legal Disclaimer: Information presented, displayed, or otherwise provided is for educational purposes only and should not be construed as investment, legal, or tax advice, or an offer to sell or a solicitation of an offer to buy any interests in a fund or other investment product. Access to the products and services of Lionsoul Global Advisors is subject to eligibility requirements and the definitive terms of documents between potential clients and Lionsoul Global Advisors, as they may be amended from time to time.
- Gregory Mall, Chief Investment Officer, Lionsoul Global
Ask an Expert
Q: One year into the trend, how are Canadian banks and pension funds approaching bitcoin?
A: This recent quarters 13F filing reveal that Montreal based Trans-Canada Capital has made notable investments in digital assets. They manage the pension assets for Air Canada, as one of the largest corporate pensions plans Canada. The pension fund added $55 million in spot bitcoin ETF.
Institutional adoption of bitcoin has accelerated over the past year, driven by clearer regulatory guidance, the launch of spot ETFs and increasing recognition of bitcoin as a strategic asset. Schedule 1 banks in Canada are holding more than $137 million in bitcoin exchange traded funds, underscoring growing institutional demand and long-term positioning.
Q: How might institutional accumulation affect bitcoin’s market dynamic?
A: Last year ETFs bought approximately 500,000 bitcoin, while the network produced 164,250 new bitcoins through its proof of work consensus. This means ETF demand alone was three times higher than the newly minted supply. Additionally, public and private corporations purchased 250,000 bitcoin. As governments consider including bitcoin in their strategic reserve, other entities are exploring adding bitcoin to their corporate treasury.
Q: How will the Financial Conduct Authority (FCA) greenlighting retail access to crypto exchange-traded notes (ETNs) in the UK accelerate the retail & institutional adoption?
A: This marks an important moment for in crypto products in the retail market as asset class that reflects a broader shift in the UK’s regulatory stance toward digital assets. It is a complete reversal from a 2020 decision when the FCA banned crypto exchange trades notes. ETNs will need to be traded on an FCA-approved investment exchanges. The UK is shifting its approach to crypto as the government seeks to grow the economy and support a digital assets industry. They are sending a strong signal to institutional investors that the UK is positioning itself as a competitor player in the global crypto market.
Keep Reading
- The Digital Asset Month in Review for May provides highlights and insights on global crypto ETFs/ETPs. By Joshua de Vos of CoinDesk, in partnership with ETF Express and Trackinsight.
- Unlike many U.S. States that are creating crypto friendly laws, Connecticut says NO, with the recent bill HB702 that bans the state accepting or investing in crypto.
- For the first time ever, the price of bitcoin has stayed over $100,000 for 30-days, marking a new milestone for the cryptocurrency.
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