Table of Contents
Introduction
“Altcoin season” used to mean a broad-based rally where capital rotated from BTC into ETH and then into smaller caps. Bybit Research argues that 2026 may not follow that script. The reason is structural: the market’s dominant buyer has changed.
ETFs and corporate crypto treasuries are now meaningful sources of demand. Macro conditions and regulation matter more than a halving-only narrative. And if BTC dominance remains high, any “altseason” may look less like a flood and more like a spotlight.
Table of Contents
• Why the 4-year cycle may no longer be the main model
• BTC dominance stays high and the classic altseason signal is missing
• ETFs changed demand and narrowed the “investable” universe
• Altcoin ETFs: early launches, weak participation, and what changes in 2026
• DAT companies: structural bid or systemic risk
• Is it halving cycles or liquidity cycles
• Macro catalysts and risks to watch in 2026
• Derivatives signals: what OI and options imply for risk appetite
• RWA tokenization and the “quality bid” for altcoins
• Quantum resilience becomes a competitive narrative
• What an “altcoin season” could actually mean in 2026
• Conclusion
Why the 4-Year Cycle May No Longer Be the Main Model
The classic model is familiar: sideways pre-halving, post-halving rally, then a deep bear market. Bybit’s framing is that this model is losing explanatory power, because the buyer base has changed.
In 2024, BTC reached new highs before the halving, which historically was unusual. The ETF channel created regulated access for capital that previously could not (or would not) buy spot crypto directly. That alone weakens the idea that supply shocks are the primary driver.
The key shift: demand is increasingly shaped by macro liquidity, regulated access, and policy conditions, not just by issuance schedules.
BTC Dominance Stays High and the Classic Altseason Signal Is Missing
The strongest historical “altseason” signal was a large drawdown in BTC dominance. That has not happened in this cycle in the way it did in 2016 or 2020.
There were two notable dips in BTC dominance (late 2024 and mid-2025), but they were smaller and shorter-lived than prior cycles. Bybit’s interpretation is blunt: capital rotation has been muted, and when BTC dominance softens, a meaningful portion of flows tends to end up in ETH rather than spreading broadly to alts.
If BTC + ETH keep hovering around a large share of total market cap, broad-based altseason becomes mathematically harder.
ETFs Changed Demand and Narrowed the “Investable” Universe
In earlier cycles, access was simple: if a token listed on major exchanges and caught narrative attention, capital could reach it quickly. ETFs created a different world.
ETF-driven demand is not “crypto-native.” It is regulated, constrained, and often mandates-driven. That means the new marginal buyer is less likely to rotate into long-tail alts. The practical result is what Bybit describes as an “enclosed garden” of regulated exposure.
This single dynamic can explain two things at once:
• BTC dominance remaining sticky
• alt moves becoming more selective and fragmented
Altcoin ETFs: Early Launches, Weak Participation, and What Changes in 2026
Bybit points out that the first wave of altcoin ETFs (examples cited include XRP, SOL, LTC, DOGE) did not deliver sustained outperformance. One obvious explanation is timing: many launches happened during a broader market selloff window.
But the more important structural point is participation. Even if a product exists, it needs real allocation volume to become a meaningful driver. Bybit’s framework implies that altcoin ETFs matter only when they reach a scale where they influence spot demand consistently.
In 2026, more altcoin ETFs may launch, but the barrier remains higher than exchange listings ever were. That reduces the odds of a “rally in everything” and increases the odds of “rally in what institutions can easily buy.”
DAT Companies: Structural Bid or Systemic Risk
Digital Asset Treasuries (DAT) are a second new pillar of demand. Bybit highlights how concentrated this phenomenon is around large names like Strategy (BTC) and Bitmine (ETH), with meaningful holdings relative to their chosen asset.
The bullish case: DAT creates a persistent bid that dampens drawdowns and extends cycles.
The risk case: leverage, refinancing needs, and equity-market dynamics can turn that bid into a forced seller during stress.
One specific overhang in your text is index eligibility (MSCI review). The key takeaway for the longrid is not the headline itself, but the mechanism:
If equity market structure restricts DAT financing (or forces selling via index-related flows), crypto demand becomes more fragile than it looks on price charts.
Is It Halving Cycles or Liquidity Cycles
This is one of the best parts of the narrative: the idea that “halving cycles” may have been “liquidity cycles” wearing a halving mask.
Bybit’s framing links BTC’s major expansion phases with periods of global liquidity expansion (global M2 proxies and easing regimes). ETFs add a twist: BTC can decouple upward even when liquidity is flat, because access-driven demand can front-run macro.
The practical implication for 2026 is simple:
If liquidity expands and access remains open, the downside case weakens. If liquidity tightens or risk shocks hit, crypto can still behave like a high-beta risk asset.
Macro Catalysts and Risks to Watch in 2026
Your text contains three clear “watch items” that make the article feel alive and practical:
• Fed easing expectations and the potential for a more dovish chair
• Japan policy tightening risk, JGB volatility, and carry-trade unwind spillovers
• regulation staying supportive, but still capable of surprising markets
For BTC and alts, macro doesn’t set the narrative anymore — it sets the range of possible outcomes.
Derivatives Signals: What OI and Options Imply for Risk Appetite
Bybit emphasizes derivatives positioning as a real-time sentiment gauge.
Key points worth keeping in the longrid:
• implied volatility being structurally suppressed can reflect institutional option-selling strategies
• but liquidation events still happen and reshape skew and risk appetite
• open interest failing to recover after a shock suggests retail participation is weaker
That combination supports the “K-shaped” thesis: the market doesn’t disappear, it concentrates.
RWA Tokenization and the “Quality Bid” for Altcoins
If 2026 has an “altseason”, Bybit’s strongest candidate driver is not memes. It’s tokenization infrastructure.
RWA growth is a narrative that institutions can justify, regulators can frame, and builders can monetize. That tends to favor:
• chains with compliance-friendly positioning
• ecosystems with deep liquidity and settlement credibility
• projects with clear enterprise rails (stablecoins, tokenized treasuries, tokenized equities)
This aligns with the idea of “flight to quality” within alts, rather than a broad mania.
Quantum Resilience Becomes a Competitive Narrative
This is an excellent differentiator for BTCUSA: most sites won’t connect “market structure” with “post-quantum roadmap” in a coherent way.
The article should treat quantum-resilience as a medium-term moat narrative:
• bigger onchain value means bigger incentive to attack
• even if Q-Day is not imminent, migration planning becomes part of institutional due diligence
• chains that demonstrate credible cryptographic roadmap can win mindshare and partnerships
In 2026, “security posture” becomes part of valuation narratives, especially for infrastructure chains.
What an “Altcoin Season” Could Actually Mean in 2026
Here’s the clean, memorable framing:
Altcoin season 2026 is less likely to be a flood and more likely to be a K-shaped market.
That means:
• winners break out hard (quality, access, ETF wrapper, RWA rails)
• many alts chop sideways or bleed (no institutional access, weak liquidity, no durable use-case)
• rotations may happen later and more selectively than past cycles trained people to expect
In practice, “altseason” becomes “selective alt outperformance,” not “everything pumps.”
Historically, the strongest altcoin rallies followed Bitcoin halving events with a short delay. Capital rotated out of BTC and into higher-risk assets, driving broad “altseasons”.
The chart below shows TOTAL2 — the total crypto market capitalization excluding Bitcoin — plotted against halving dates. Unlike previous cycles, the current cycle has failed to produce a sustained breakout in altcoin market cap.
BTCUSA Insight
The biggest 2026 mistake may be using 2017 and 2021 playbooks in a 2026 market.
ETFs and corporate treasuries didn’t kill cycles — they changed who holds the keys to marginal demand. If regulated access keeps narrowing the investable universe, then altcoins won’t rise as a group. They’ll compete for inclusion.
Conclusion
Bybit Research makes a credible case that 2026 will be driven less by halving mythology and more by liquidity, regulation, and the structure of institutional access.
If that’s true, the key question is not “Will there be an altcoin season?” The better question is: “Which altcoins are positioned to be bought by the new dominant buyer?”
