The K-line chart of Bitcoin flows with institutional funds, while the battlefield of altcoins is still filled with the cries of retail investors.
Three years ago, I regarded altcoins as 'high-multiple Bitcoin', and as a result, I experienced several roller coasters amid repeated surges and drops. Now, looking back on this experience, I can only smile wryly and admit: I made a classic mistake.
Until the arrival of spot ETFs, I finally understood: Bitcoin and altcoins have long embarked on two different paths, with players, driving logic, and cyclical rhythms that are fundamentally not in the same world.
01 The Split of Funds: Two Parallel Worlds
The buyers of Bitcoin are the traditional financial giants: family offices, pension funds, and hedge funds. They allocate assets through brokers or ETFs, with daily capital flows reaching tens of billions of dollars.
The preference of these institutional investors for Bitcoin is so obvious that a Goldman Sachs report in 2025 pointed out that institutional investors accounted for 47% of the cryptocurrency market trading volume, an increase of 22 percentage points from 2023.
The main buyers of altcoins are still those 'old players': venture capital firms, exchanges, on-chain big players, and retail investors willing to 'go all in.'
These two types of funds are like species from different planets. Institutional funds move slowly like glaciers but are unstoppable, while altcoin funds come and go quickly like thunderstorms.
02 The watershed of logic: macro narratives and hot speculation
The trend of Bitcoin is determined by macro factors: interest rate policies, ETF fund flows, and fluctuations in the US dollar index. It is a macro asset that is increasingly correlated with gold and the stock market.
Altcoins rely on 'narratives': new chains launching, airdrop expectations, or which sector suddenly becomes hot. It is a narrative asset that lives on the waves of topics and trends.
This has led to an interesting phenomenon: when Bitcoin is stagnant, a certain public chain may have quietly increased independently. Many people are still waiting for altcoins to follow Bitcoin's rhythm, but in fact, they have already started 'a new venture.'
The current market rhythm is so fast that it is dazzling, with almost 'new memes every week': this week AI concept coins, next week L1 public chains, and then Meme coins are hot again next week. By the time funds rotate through each sector, many retail investors have not reacted, and the altcoin season is already over.
03 Indicator signals: How to identify real opportunities
For me, the market capitalization ratio of Bitcoin (BTC.D) is the most critical barometer. When BTC.D falls from a high position, it often indicates that funds are starting to flow from Bitcoin to altcoins, which may be a precursor to altcoin season.
The ETH/BTC trading pair is another indicator I closely monitor. When ETH starts to consistently outperform BTC, it is usually a signal that market risk appetite is rising, indicating the possibility of a broader altcoin rally.
However, the validity period of these indicators is shrinking. The current market cycle has clearly compressed; what used to last for months now completes in just a few weeks.
04 The new survival rules for altcoins
Not all altcoins are worth paying attention to. My personal screening criteria are:
Projects backed by real cash flow, such as some DeFi protocols;
Technology with substantial breakthroughs rather than just white paper speculation;
Sufficient market capitalization to accommodate institutional fund inflows;
Clear compliance paths to avoid becoming a target of regulatory crackdowns.
Even for altcoins that meet these criteria, I only allocate a small amount of funds. Altcoins in my investment portfolio are like 'seasoning' rather than 'staple food.'
05 My personal investment framework
After years of practice, I have formed my own investment framework:
'Core-Satellite' strategy: Bitcoin as the core asset (accounting for 70%-80%), and altcoins as satellite assets (accounting for 20%-30%). This ensures a solid foundation while not missing out on excess return opportunities.
Regular rebalancing: When the gains of altcoins are too large, I will partially take profits and increase my position in Bitcoin. This mechanism of 'selling overvalued assets and buying undervalued ones' is actually a natural risk control.
No chasing hot trends principle: For those coins that suddenly become popular on social media, I usually remain cautious. Experience tells me that when you hear a wealth story about a certain altcoin, it is usually at the tail end of the market.
Conclusion: Recognizing the essence is key to survival
When you buy tokens like AI, modularization, or DePIN, you are not betting on whether Bitcoin will rise or fall, but on whether the next opportunity will land on your head.
Bitcoin is asset allocation, while altcoins are venture investments. The two are fundamentally different.
The current cryptocurrency market has left the 'barbaric era' of simultaneous rises and falls, entering a 'civilized era' of increasing differentiation. Only by recognizing this reality and adjusting strategies can one survive in this market.
Sometimes I miss the simple era when altcoins moved in tandem with Bitcoin, but the market will never go backward. As investors, we can only continue to evolve and adapt to new rules.
(The above is my personal opinion and does not constitute investment advice. The market has risks, and investment should be cautious. If you want to learn more about cutting-edge blockchain analysis, feel free to follow me~)
PS: What do you think the next crypto asset that institutions might focus on will be? Let's discuss your views in the comments section #巨鲸动向 $ETH
