The Great Crypto Divide : Bitcoin Soars While Altcoins Struggle

The crypto market is undergoing a profound transformation, and bitcoin is more than ever the central element of the digital financial landscape. While previous cycles saw altcoins benefiting from BTC’s rise, the current dynamics are taking an unprecedented turn. Institutional investors are massively favoring bitcoin, while neglecting the thousands of tokens that are still increasing in number. Its dominance index jumped by 15.5 % in January 2025, reaching nearly 59 %, a level that illustrates a clear imbalance between BTC and the rest of the market. This rising power is not only due to the influx of capital. Political decisions, ETF performances, and the exhaustion of altcoins are strengthening the supremacy of the king of cryptos. In the face of these transformations, is bitcoin in the process of permanently detaching itself from the traditional crypto market?

Bitcoin, an essential asset for institutional investors

The crypto market is experiencing exponential inflation of new tokens, a situation that worries some major players. Brian Armstrong, CEO of Coinbase, lamented on social network X (formerly Twitter) on January 26, 2025, the creation “of about one million tokens per week”, a number that is constantly increasing, thus calling for a reform of the crypto listing process in the United States. While altcoins are multiplying without real control, bitcoin is following a radically opposite trajectory and is attracting ever more substantial institutional capital.

The rapid ascent of bitcoin is no accident. The approval of Bitcoin ETFs has opened the door to an unprecedented influx of institutional capital, which is profoundly transforming the market’s structure. In just one year, the assets under management of bitcoin funds have increased from $1.17 billion to $39.57 billion, illustrating a massive enthusiasm from traditional investors.

This interest extends beyond private players. Several U.S. states, such as Wyoming, Arizona, and New Hampshire, are considering integrating bitcoin into their public reserves, a project that could redefine its status within economic policies. Such political adoption enhances the perception of bitcoin as a strategic asset, independent of the usual speculative cycles of cryptos.

The impact is even more visible in the market as whales continue to accumulate significant amounts of BTC. This dynamic reduces supply and lowers the probabilities of a sharp correction. Sam Wouters, an analyst at River Financial, observes that “in this cycle, bitcoin is leaving crypto behind”, while strategist Tuur Demeester bluntly asserts in a post on January 29 on X (formerly Twitter) that “altseason is dead”. More than just a simple cyclical phenomenon, this trend reveals a major structural change: bitcoin is establishing itself as a fully-fledged asset, detached from the rest of the crypto market.

Ethereum and altcoins struggling against bitcoin

This situation results from several factors. Ethereum’s transaction fees remain high, making its use less attractive for investors and everyday users. Meanwhile, alternatives like Solana are gaining ground and offering faster, cheaper solutions. Uncertainty around upcoming developments in Ethereum also fuels this trend. Internal debates on scalability strategies and changes in leadership within the ecosystem undermine investor confidence.

Capital flows confirm this growing imbalance. In 2024, bitcoin captured 90 % of institutional investments in the crypto sector, leaving Ethereum ETFs lagging behind. This divergence reveals a grim reality for ETH. If the ETH/BTC pair crosses the critical threshold of 0.030 BTC, a new downward phase could begin, further weakening its status as a leader among altcoins.

In this context, a major question arises: Can Ethereum still reverse the trend, or is it doomed to lose its influence to bitcoin? The history of the crypto market has already proven that volatility can reshuffle the cards, but this time, the dynamics seem more structural than cyclical.

Ultimately, bitcoin’s ascent rests on three solid pillars: massive institutional adoption, increased political support, and a market of altcoins struggling to compete. In the face of this dynamic, some analysts, such as those at Standard Chartered, predict a BTC at $200,000 by the end of 2025, driven by increasing flows to ETFs and public reserves. However, this dominance is not an absolute certainty. The history of cryptos has always been marked by cycles of innovation and reversals. If bitcoin continues to institutionalize, its role could evolve into that of a fully-fledged financial asset, detached from the traditional crypto market. Conversely, a new generation of altcoins, driven by technological advances, could attempt to challenge its supremacy. In either case, the bitcoin has never been so dominant. It remains to be seen whether this position will be definitively secured or still contested in the years to come.