This autumn marks the full-scale onset of the altcoin season = Coinbase analysis

## Initial Phase of Fund Circulation to Altcoins

The major U.S. cryptocurrency exchange Coinbase released its monthly report on market outlook on the 14th. The current market suggests a transition to a full-fledged altcoin season.

The definition of altcoin season refers to the situation where at least 75% of the top 50 altcoins by market capitalization have outperformed Bitcoin over a 90-day period. Currently, that ratio is stated to be 40%.

Bitcoin's market dominance has decreased from 65% in May 2025 to about 59% in August, indicating that it is in the early stages of capital circulation into altcoins.

In the market, there is a discussion that the interest rate cut by the FRB in September could be the peak of the cryptocurrency market in the short term, but Coinbase has shown a different perspective.

Coinbase analyzes that the situation where more than $7 trillion (approximately ¥1,030 trillion) of individual investor funds are stored in money market funds (MMFs) may lead to increased participation from individual investors in the medium term due to monetary easing by the Federal Reserve.

The accumulation of cash is thought to be influenced by factors such as rising uncertainty in traditional markets due to Trump tariffs, the perception of market overvaluation, and persistent concerns about economic growth.

On the other hand, as the possibility of interest rate cuts by the Federal Reserve in September and October is increasing, it is expected that the attractiveness of MMFs will diminish due to low interest rates, leading to an increase in capital inflows into high-risk assets such as cryptocurrencies.

Source: Coinbase

It was stated that the liquidity of the cryptocurrency market has begun to recover in the past few weeks, as suggested by trading volume, order book thickness, and the net issuance of stablecoins.

Growing interest in Ethereum

Coinbase states that interest from institutional investors in Ethereum (ETH) is increasing. It continued that this is supported mainly by demand from digital asset treasury companies (DAT) and the rising conversation around stablecoin and real-world asset (RWA) tokenization.

Source: Coinbase

According to data as of August 13, major Ethereum financial strategy companies hold approximately 2.95 million ETH. This accounts for over 2% of the total Ethereum supply (120.7 million ETH).

In particular, the liquid staking protocol Lido (LIDO) has benefited from the recent rise of Ethereum, experiencing a 58% increase on a monthly basis.

Coinbase pointed out that the backdrop of the rise in Lido is that the U.S. Securities and Exchange Commission (SEC) issued a statement saying that liquidity staking tokens are not considered securities under certain conditions. It should be noted that this guidance is still the staff's view and may change in interpretation in the future.

What is liquid staking?

A DeFi (Decentralized Finance) mechanism that allows you to manage alternative assets (staking proof tokens) while receiving staking interest on cryptocurrency. At the largest service provider, Lido Finance, you can stake ETH to receive the bond token stETH, which can be used as collateral for lending or managed on DEX (Decentralized Exchange), etc.

Ethereum (ETH) News & Price

Thorough explanation of investment benefits and risks.

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