Spot Bitcoin ETFs weaken altcoin season by limiting capital rotation

Spot Bitcoin ETFs have bolstered BTC’s price but have reduced capital flow into altcoins, altering the traditional market cycle, according to The Crypto Basic. Analyst Miles Deutscher noted that ETF investors hold Bitcoin differently, with funds often exiting into fiat rather than rotating into Ethereum or smaller altcoins. Glassnode data shows that altcoin market capitalization has dropped by $234 billion in two weeks, highlighting a major shift in liquidity distribution within the crypto market.