Ki Young Ju, CEO of blockchain analytics firm CryptoQuant, has provided a detailed analysis on why the much-anticipated "altcoin season" remains delayed despite Bitcoin's recent market rally. According to Ju, the shift in the nature of capital inflow into Bitcoin, dominated by institutional investors and spot ETFs, is a significant factor.‍

Institutional Demand Dominates Bitcoin Market

Unlike retail traders who often rotate assets from Bitcoin into altcoins, institutional investors and ETF buyers typically hold their Bitcoin long-term without reallocating funds to altcoins. Additionally, institutional participation primarily occurs outside traditional crypto exchanges, making asset rotation into altcoins less practical.

Ju highlighted that while institutions may invest in major altcoins through ETFs or other vehicles, the liquidity for smaller altcoins continues to depend heavily on activity from crypto exchange users.

For altcoins to achieve new all-time highs in market capitalization, a substantial influx of fresh capital to crypto exchanges is required. However, Ju noted that the current altcoin market cap remains below its previous peak, reflecting reduced liquidity from new exchange users.

This lack of liquidity contrasts with previous market cycles when retail-driven FOMO (fear of missing out) spurred significant trading activity and asset rotation within the crypto space.‍

Potential Triggers for Altcoin Growth

Ju suggested that if retail interest in Bitcoin surges again, potentially driven by renewed FOMO, activity on crypto exchanges might increase, creating opportunities for an altcoin resurgence. However, he pointed out that Bitcoin's future growth is expected to be driven more by institutional and ETF-related demand rather than retail traders.

Ju emphasized that altcoins need to develop independent strategies to attract capital rather than relying on Bitcoin's market momentum.