Main Points :
- The shift from broad crypto rallies to a more selective “risk-on” phase driven by altcoins like XRP and Solana
- The decline in dominance of the major “core” cryptocurrencies (Bitcoin, Ethereum) paving the way for capital migration into altcoins
- Market maturity bringing investor focus to fundamentals and individual project growth stories
- Strategic implications for investors—especially in Japan—on portfolio structure (core + satellite) and criteria for altcoin selection
- Recent developments (ETF flows, regulatory clarity, TVL and ecosystem metrics) supporting the narrative of an alt-season in progress
1. Altseason Signals: XRP & Solana Leading While Bitcoin & Ethereum Stall
In recent months, the crypto market has begun to show what many analysts interpret as early signs of an “altseason” — a phase where altcoins outperform the traditional market leaders rather than simply riding the broader market tide. Coins like XRP and Solana are gaining traction, even as Bitcoin and Ethereum remain comparatively subdued.
For example, one article noted that while Bitcoin products recorded outflows of about US$719 million in a single week and Ethereum products US$409 million, altcoins began to capture interest elsewhere. Meanwhile, XRP recently traded around US$2.41 and analysts argue it could reach US$5 by late 2025 under favourable regulatory and institutional conditions.
The reason this is significant: when the largest coins stagnate, capital often seeks higher-risk/higher-reward opportunities elsewhere. These moves often herald deeper market rotations—and we may well be witnessing one now.
2. Altcoins’ Rise: Use-Cases and Fundamentals Gain Attention
Why are XRP and Solana capturing interest? Because their value propositions are more tangible compared to many speculative tokens. XRP is positioned for international payments/settlements, and regulatory clarity (such as its lawsuit settlement) has improved its standing. Meanwhile, Solana offers high-throughput, low-cost transactions, making it a backbone for decentralized apps (DApps) and NFTs.
This shift suggests that investors are increasingly emphasizing utility: “Does this project solve a real problem?” becomes a critical filter. As one analysis puts it, in 2025 altcoin season is being driven less by retail hype and more by tech innovation and narratives such as tokenised real-world assets (RWAs) or layer-2 scalability solutions.
If we consider the typical lifecycle of crypto bull markets, earlier phases tended to reward broad speculation (e.g., early ICOs, meme coins). What we’re seeing now is a more selective, narrative-driven phase where quality matters more, which is a hallmark of market maturity.
3. Mechanism: Core Currency Stagnation + Liquidity Rotation
One of the structural drivers of altseason is the stagnation (or slower growth) of the “core” cryptocurrencies and the consequent rotation of liquidity into altcoins. When Bitcoin and Ethereum are not rallying far, capital seeking higher returns often looks elsewhere. For instance, decreases in Bitcoin dominance tend to signal this.
An article notes that Bitcoin dominance dropping below 59% has echoed prior altseason patterns. The “fuel” here is two-fold: 1) large-cap coins becoming less exciting in the immediate term and 2) altcoins with strong stories becoming more interesting relative to “safe” assets in the crypto space.
For example, Bitcoin dominance charts triggered bearish technicals on monthly timeframes, which historically preceded altcoin breakouts. In short: while Bitcoin “sits,” the market doesn’t just stop—it rotates. And that rotation may be underway.
4. Market Maturity & “Selective Risk-On”: The Shift to Individual Growth Stories
In prior crypto cycles, there was often a broad “risk-on” sentiment: everything up, everyone wins. But now, we appear to be entering a phase of selective risk-on—where investors selectively deploy risk capital into projects with strong fundamentals, rather than indiscriminately across the board.
This reflects a maturing investor mindset. Instead of treating “crypto” as a single speculative category, investors increasingly analyse individual assets as potential growth plays. The result: more emphasis on things like real-world use, regulatory clarity, ecosystem activity, and unique value propositions.
For example, XRP’s legal clarity is cited as a trust driver for institutional capital. And Solana’s rapid growth in DApp and DeFi usage offers tangible metrics for investors. This isn’t just “crypto going up” — it’s “crypto projects being judged on business merit and utility”.
At the same time, investors remain cognizant of macro-risk (global inflation, regulatory shifts, equities volatility). The smart strategy is finding the balance between macro hedges (e.g., Bitcoin as “digital gold”) and growth bets (select altcoins). This is the logic behind many current portfolio discussions.
5. Strategy for Japanese Investors: Selection & Rebalancing in an Alt-Season
For Japanese investors (and more broadly any investor seeking growth in altcoins), there are key strategic take-aways given the current market dynamics.
5.1 The Core-Satellite Framework
A widely-recommended approach is the “core-satellite” portfolio structure. In this approach:
- Core assets (e.g., Bitcoin, Ethereum) provide long-term stability and foundational exposure.
- Satellite assets (select altcoins with strong fundamentals) provide the potential for higher return.
Given that Bitcoin and Ethereum remain dominant but facing slower growth, the satellite portion becomes the “alpha hunt”—who will emerge as the next leader? Using XRP and Solana as examples, their role is less about “holding forever” and more about “boarding the growth wave”.
Having a stable core allows you to take calculated risks in the satellite positions without jeopardising the foundation.
5.2 Filtering Altcoins via “Utility” and Growth Story
In this alt-season, not all altcoins will succeed. Therefore, a filter based on practical use-cases is critical. Some selection criteria:
- Does the project solve a known real-world problem (e.g., cross-border payments, scalability, tokenised assets)?
- Is the ecosystem active (TVL, DApps, developer activity)?
- Does the project have regulatory clarity or institutional backing?
- Is there measurable growth in adoption or network metrics (e.g., Solana’s TVL jump) or institutional flows (e.g., XRP’s ETF/ futures prospects)?
Investors should avoid relying solely on hype or memetic momentum. The narrative of the project must translate into measurable metrics.
5.3 Risk and Liquidity Considerations
Even in a maturing market, altcoins carry higher volatility and risk. The rotation into altcoins does not guarantee broad success; much will depend on timing and execution. Liquidity is another factor—being in higher-liquidity altcoins reduces execution risk, but many smaller coins remain extremely speculative.
Thus, investors should manage position size, maintain proper risk controls (stop losses, diversification) and stay alert for macro signals that could reverse momentum (e.g., regulatory crackdown, liquidity crunch).
6. Recent Developments Reinforcing the Narrative
To ground the above in recent developments:
- Institutional flows: Analyses show that in 2025, institutional capital has become an important driver of altseason rather than merely retail fervour.
- ETF/Derivatives developments: Reports indicate that futures and ETF products linked to altcoins like XRP are gaining traction, signalling mainstream financial infrastructure is expanding to include altcoins.
- Metrics of rotation: The “Altcoin Season Index” (which measures the share of altcoins outperforming Bitcoin) rose into the 50s and 70s, suggesting early altseason conditions.
- Market context: With Q4 2025 approaching, macro-factors such as seasonal momentum (crypto markets often strong in Q4) and institutional adoption are aligning.
These signs lend credibility to the idea that we are not just seeing isolated rallies in XRP or Solana, but a broader structural shift in the crypto market.
7. Summary — What This Means for Investors
In summary, the crypto market appears to be undergoing a transition from a cyclic broad rally into a more selective growth phase, where altcoins with strong fundamentals and real-world utility are taking the lead. The stagnation of the “king” assets (Bitcoin, Ethereum) is proving to be the catalyst for this shift, as capital rotates and investor mindset matures.
For the investor seeking new sources of returns and practical blockchain-based projects, this moment offers opportunity—but with caveats. The keys are:
- A portfolio structure that anchors in stability (core) and allows for targeted growth (satellite).
- A disciplined approach to selecting altcoins based on utility, ecosystem activity, and institutional interest—not just hype.
- Risk management, awareness of macro-drivers, and monitoring of market-metrics (dominance, ETF flows, TVL, etc.).
In the current environment, coins like XRP and Solana exemplify what the market is rewarding: real use-cases, institutional signals, ecosystem growth. If the broader altseason unfolds as signals suggest, being ahead in selection and timing could make a meaningful difference.
With capital rotating and infrastructure evolving, this may be the window for meaningful altcoin participation. But as always in crypto: higher potential rewards come with higher risks—and the disciplined investor will recognise that the upside lies not in chasing every pump but in choosing wisely and staying nimble.
