welcome to money is freedom
a podcast
exploring how finance and freedom connect in our lives
created from thoughtful research
and narrated by Notebook LM AI
this series brings you clear
meaningful insights into finance and beyond
in episode 27
we explore whether Bitcoin's rising dominance is
permanently changing crypto history
or if alt season is just delayed
with institutions favoring Bitcoin
and quantitative tightening
QT still in effect alt coins have struggled
leading some to declare the end of past cycles patterns
but does history suggest otherwise
join me as we break down Bitcoin's dominance
alt coin trends and key macro signals
that could determine if alt season will return in 2025
or never again
welcome to the deep dive today um
we're gonna be waiting into the waters
of the crypto market oh fun
you shared some research with me on alt season right
so that's that time when all the alt coins yeah
the alternative cryptocurrency is
are supposed to outperform bitcoin
uh huh and the big question everyone's asking yeah
is this cycle different
is alt season just delayed or is it just gone
yeah is it just gone
let's let's break it down
okay let's do it
so it's
it's definitely an interesting time to be watching
the markets yeah
you know we've got this historical pattern
the so called crypto cycle right
which is really heavily influenced by
Bitcoin's having event right
the having yeah
it's kind of like a built in scarcity
mechanism right it happens roughly every four years
yeah Bitcoin's production rate gets cut in half
and in theory that should drive up the price yeah
but but how does that impact all the alt coins
will historically when Bitcoin's price surges
after a having on early investors
you know they take profits right
they've been holding sometimes for years yeah
and this is their chance to cut a cash out sure
and then they look for the next big opportunity yeah
and that's where all coins come in make sense
so this flow of capital from Bitcoin into alt coins
right that's what has traditionally fueled these like
explosive alt seasons okay
so it's like a classic pump and rotate strategy
exactly bitcoin goes up
profits get taken
and then that money flows into the alt coins
creating another surge yeah
we've seen this play out before
haven't we absolutely like when uh
well 2017 OK
bitcoin dominance just plummeted wow
as as Ethereum and other
all coins just absolutely skyrocketed
and then again in 2021
we had like the meme coin frenzy
remember that oh yeah
the defi boom Nfts exploding like it was wild
it was wild it felt like every day
there was a new coin hitting the headlines
and here's where things get really puzzling this time
Bitcoin's dominance isn't dropping
in fact it's actually increasing right
so what's going on here yeah
what is going on is the cycle broken
that that is the million dollar question yeah
um a couple things stand out to me
for the research you shared okay
first
we've got this massive influx of institutional money
okay into Bitcoin interesting
the approval of spot Bitcoin etfs in the US right
has been a game changer oh really
these etfs make it way easier for large institutions
like who like pension funds
hedge funds okay to invest in Bitcoin
and and they're doing it they are in a big way wow
so it's like
Bitcoin has finally gotten
the Wall Street seal of approval yeah
you can say that
but the alt coins are still viewed as too risky yeah
too risky for those big players okay
yeah we're seeing these like
establish firms like Black Rock and Fidelity
those are big names launching Bitcoin etfs and I mean
these are the giants of the financial world yeah
that kind of legitimacy yeah
is a powerful driver for bitcoin price
so
he institutional adoption is definitely playing a role
big time but what about ethereum
hmm it's the second largest cryptocurrency right yeah
it's often seen as like the leader of the alt coin pack
yeah it's kind of sets the tone
what's happening with its performance
that's another fascinating piece of the puzzle okay
so while Bitcoin's market cap has been surging yeah
Ethereum's dominance has actually been shrinking
oh wow
this this suggests that Ethereum might be decoupling
from Bitcoin's trajectory interesting
now whether that's a good thing
or a bad thing for the alt coin market as a whole yeah
that's still up for debate okay
so it's like Bitcoin is becoming its own asset class
the digital gold everyone keeps talking about
exactly
but if Ethereum isn't following the same pattern
what does that mean
for all the other alt coins out there right
is alt season really over
well it's not quite that simple okay
there's another major factor at play here
and that's the macro economic environment okay
specifically the Federal Reserve monetary policy
wait the Fed
I thought crypto was supposed to be decentralized yeah
separate from traditional finance right
how does the Fed come into play
that's a common misconception okay
the reality is the crypto markets yeah
are still influenced by global economic trends okay
and right now
we're in a period of quantitative tightening or QT
where the Fed is reducing
the amount of money in circulation okay
so less money's sloshing around in the system exactly
how does that impact crypto and alt coins specifically
think of it this way okay
when money is tight investors become more risk of earth
sure
they're less likely to gamble on speculative assets
like alt coins like alt coins exactly
bitcoin on the other hand
is increasingly seen as this safe haven asset okay
this kind of digital gold right
so in a QT environment Bitcoin tends to benefit okay
while alt coins suffer interesting
so it's like a double whammy for alt coins yeah
they're not getting the institutional love
that bitcoin is right
and they're getting squeezed
by the Fed's tightening policy
that's right no wonder they're struggling
yeah they're having a tough time but
but what happens when the Fed changes course
that's where things get really interesting okay
historically
when the Fed shifts from QT to quantitative easing
right or Q E right
it's been like a green light for alt coins
Q E that's when the Fed
essentially pumps money back into the system
right exactly
making it easier for people to borrow and invest
yep yep
and that easy money tends to flow into riskier assets
uh huh like alt coins
like alt coins we saw this play out in 2019 and 2020
right yeah
ethereum and other alt coins were lagging behind
uh huh but then the Fed pivoted to Q E and boom
boom the alt coin market exploded
it was off to the races so
is that the key then
are we just waiting for the Fed to flip the switch
and turn on the Q E money printer
wow will that magically bring back alt season
it's certainly a factor to watch closely
okay but there are other things to consider as well
like what I mean
the crypto landscape is constantly evolving right
new technologies new projects
new use cases are emerging all the time
you're right it's not just about the money
yeah there's the whole innovation side of things too
exactly ethereum for example
has been working on some pretty major upgrades yeah
could those changes independent of the feds actions
uh huh drive a resurgence in alt coin interest
absolutely okay
the Ethereum merge for example
significantly reduced its energy consumption right
made it more appealing to environmentally conscious
investors and
and there's ongoing work on scalability and security
yeah
if Ethereum can successfully address these challenges
it could attract a whole new wave of adoption okay
so we've got this interesting dynamic developing yeah
on the one hand
you've got bitcoin increasingly seen as a safe haven
attracting institutional money
on the other hand
you've got Ethereum and other alt coins
potentially driving innovation
and attracting a different type of investor
it's a fascinating dichotomy
it is and it raises an important question
what's that is the traditional crypto cycle
with its clear dominance by bitcoin
yeah still relevant
hmm or are we moving toward a more multipolar market
with different cryptocurrencies
serving different purposes
and attracting different investor profiles okay
so maybe it's not about Alt Season being canceled
but about it evolving yeah
maybe maybe we won't see those massive
synchronized pumps across the entire alt coin market
like we did in the past that's a real possibility okay
we might see more nuanced sector specific rallies
interesting for example
if there's a breakthrough in decentralized finance
or defi uh huh
we might see a surge in defy related altcoins
so
it's not about betting on the entire alt coin market
right
but about identifying specific trends and projects
with strong fundamentals exactly
that makes a lot of sense
the key is to do your research yeah
understand the technology right
and assess the team behind each project okay
the days of blindly chasing mean coins
are probably over that's a good point
the market is maturing
and investors are becoming more sophisticated yeah
for sure but let's bring it back to the present moment
okay it's January 2025
and the Fed is still in tightening mode
interest rates are high liquidity is tight
and risk appetite is low yep
what does that mean for alt coins in the short term
well
it's certainly not the ideal environment for a major
alt coin rally okay
as we've discussed
QT tends to favor safe haven assets like bitcoin yeah
but that doesn't mean there aren't opportunities okay
so even in this less than ideal environment
there are still potential plays for savvy investors
for sure but what should they be looking for
what signals should we be watching for right
what could indicate a shift in the tide for alt coins
there are a few key indicators okay
first and foremost any sign
that the Fed is considering a pivot away from QT
would be huge that could be hints of interest rate cuts
yeah or even murmurs of a return to Q E
so we're back to Fed watching a little bit yeah
but with a more nuanced perspective this time right
it's not just about waiting for the money
printer to turn back on no no
we also need to keep an
eye on developments within the altcoin space itself
uh huh are there any major upgrades
or innovations on the horizon exactly
are there specific sectors showing strong growth
independent of the broader market conditions
those are all good questions
so it's about understanding both the macro
economic forces right
and the micro level
innovations happening within the crypto space
yeah it's a lot to keep track of
it is but that's what makes it so fascinating
yeah this is a dynamic
rapidly evolving market uh huh
and sting informed is crucial for success
you're absolutely right so
for our listener
who's trying to make sense of all this
what are the key takeaways
what should they be focusing on
as they navigate this complex landscape
I would say
the key takeaway is that the crypto market is maturing
the days of simple predictable cycles might be over
interesting we're moving towards a more complex
multifaceted market
influenced by a wide range of factors
so it's not just about Bitcoin anymore
exactly
while Bitcoin will likely remain a dominant force
uh huh alt coins are carving out their own niches okay
driven by innovation
and a growing understanding of their unique
value propositions
it sounds like the future of altcoins is less about
writing bitcoins coattails
and more about charting their own course
based on
real world utility and technological advancements
I think that's a great way to sum it up
it's like we're seeing the crypto ecosystem diversify
yeah bitcoin is becoming the bedrock
the digital gold right
while altcoins are exploring
all these different possibilities
from decentralized finance to NFTs in beyond
that's a great way to put it
in
this diversification makes the market more resilient
okay more adaptable interesting
it's no longer a monolithic entity
driven solely by Bitcoin's price movement
that's encouraging especially for someone like me
who's always been fascinated by the potential
of blockchain technology
to disrupt all sorts of industries
exactly and that's what makes this such an
exciting space to watch we're still in the early stages
yeah and there's so much innovation happening right
the key is to stay informed okay
stay curious yeah
and don't be afraid to dive deep into
the projects that peak your interest
okay I'm ready to dive
but before we wrap up yeah
I wanna circle back to the question we started with
okay is alt season canceled or just delayed
yeah or maybe transformed into something
completely different right
what's your take
I think it's safe to say that the traditional
all season as we've known it
might be a thing of the past
okay
those wild across the board pumps driven by bitcoins
price cycles yeah
are less likely in this more mature diversified market
so
no more easy money by just blindly following the herd
probably not
but that doesn't mean there won't be
opportunities for significant gains okay
the key is to be more selective
more strategic right
look for projects with strong fundamentals okay
real world utility and a dedicated team behind them
so it's about being an informed investor
not just a speculator exactly
it's about understanding the technology
the trends and the potential impact of these projects
precise and remember
this is still a volatile market yeah
don't invest more than you can afford to lose right
do your own research uh huh
and don't rely solely on hype or social media sentiment
solid advice so
as we emerge from this deep dive
into the world of alt coins
yeah what's the final thought
you wanna leave our listener with
what's the one thing they should keep in mind
as they continue their crypto journey
I would say this the crypto space is full of potential
okay but it's also full of risk
uh huh don't get caught up in the hype cycles right
focus on understanding the underlying technology
yeah the value propositions
and the long term vision of the projects
you're interested in and always remember
the future of finance is being written right now
wow and you have the opportunity to be a part of it
that's a great note to end on
thanks for having me
thanks for taking this deep dive with us
and thanks to ur
listener for joining us on this exploration
until next time keep learning
keep exploring
and keep diving deep into the fascinating world
of cryptocurrency