Welcome to August. 🫡

Since this month started, I’ve seen everything and its opposite on CT, and every bear woke up from their nap.

July brought solid performances, but August has historically been quite bearish, for $ETH, and by extension for altcoins as well.

That’s why I don’t think we’re looking at the "end of the cycle" or an "I missed the window" moment. This feels more like a pause and it's not something bad.

✦ Let’s rewind for a second

Yes, $BTC is growing and bringing new money into crypto.
But the truth is that in terms of capitalization, the altcoin market hasn’t grown at all since 2021.

TOTAL3 was around $1T in November 2021 and still sits near $1T in July 2025.

On paper it looks like we’re holding the line, but in reality, we lost liquidity in altcoins because TOTAL3 includes stablecoin supply, and that has exploded since 2021.

As of March 2025, stablecoins reached about $232B, up nearly 45x since 2019.

By May 2025, supply hit $247B, a 54% year‑over‑year increase, now close to 10% of all U.S. currency in circulation.

So while the chart suggests stability, most of that "growth" is just stablecoins piling up. We’ve basically been playing with the same stack of money for four years, rotating it around like kids, while a chunk of it is parked in $USDT and $USDC rather than fueling alts.

So the real question: are altcoins just short‑term bets to eventually rotate into BTC?

Right now, yes, and here’s what the data shows.

BTC dominance rose from ~40% in mid‑2021 to 62% today. A 20‑point gain while TOTAL3 stayed flat shows exactly where liquidity went: out of alts, back into Bitcoin.

History proves that most alts can’t hold value once hype fades, even DeFi leaders and metaverse tokens from the last cycle still trade 60–90% below their 2021 peaks. This market runs on attention, with narratives rotating and few winners surviving more than a cycle. That’s why most people play alts as short‑term bets, rotating gains into BTC.

$BTC crushed 2024 and 2025 so far, becoming a digital reserve for both institutions and governments. That, of course, fueled ETH and the altcoin market, but BTC has outperformed throughout.

In my view, the Fed remains the only true catalyst that can reignite full‑blown mania in the market.

When the Fed cut rates near zero in March 2020, $BTC went from ~$5k to ~$69k and $ETH from ~$110 to ~$4.8k within 18 months. Liquidity rushed into risk assets because the risk‑free yield collapsed, forcing investors out the curve.

Even a shift from 5% to 3% on T‑bills makes a DeFi pool yielding 7% far more attractive and lowers leverage costs across exchanges, giving traders room to scale up.

Are we in a Bull Market right now?
For $BTC, yes, of course.
For Altcoins, doesn't look like one.

Can we top without having a true Bull Run for Alts, maybe.

For now, retail still hasn’t returned. And the Liquidity is still in $BTC.
It’s mostly institutions, traders, and a handful of degens, all focused on pumping their bags. Fundamentals barely matter to anyone, they just hodl to get back to their entry, just to avoid losses.

We also need fresh blood. Making crypto more accessible, but more importantly through making it genuinely interesting, something that draws people in and makes them want to understand it.

I'm not sure we'll have again the kind of "degen" mass adoption we got with memecoins & NFTs, it's hard to predict, but we could have more adoption through DeFi, RWA, and other projects with realy utility.

And that’s where real on‑chain traction matters more than Google Trends. If you want to know whether real liquidity is coming, a few things you can watch:

• Stablecoin issuance versus on‑chain usage
• DeFi TVL and unique active wallets
• L2 transactions and fees
• ETH burn and issuance dynamics
• ETF inflows into BTC and ETH

If the Fed signals a rate cut into year‑end, the setup mirrors 2020: cheaper leverage, stronger risk premiums, and the spark retail needs to come back.

September will be a turning point. With a dovish Fed, this pause won’t be the end of the cycle, it could be the real beginning of the next one.

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Anyway, all that yapping to say I don't think we've hit the market top yet, but there is always stuff to monitor and the situation can change quickly.

And we’re still seeing a strong $BTC with high dominance, and almost no real trust in altcoins.

That’s why I don’t invest long-term in tokens, except for a few that are truly undervalued and likely can’t go much lower, since their valuations are already below what their fundamentals justify.

Usually I consider the R/R is good enough, but a whole shift in the Market can also make me reconsider these positions.

NFA & DYOR, let me know what you think of this Market 🫡