Coinbase report explained - uncover why analysts see altcoin season coming soon, with key data on BTC, ETH, and $7T sidelined cash.
Author: Tanishq Bodh
Coinbase Institutional just dropped a bold forecast: an altcoin season could be around the corner. Their August 2025 report, “Altcoin Season Cometh,” outlines why September might mark the start of a major shift in capital from Bitcoin into altcoins. With Bitcoin dominance slipping, Ethereum gaining strength, and trillions of dollars parked in money markets, the stage looks set.
David Duong, Coinbase’s Head of Research, highlights that the earlier 2025 thesis is holding true. The market bottomed in the first half of the year, and macro conditions remain favorable. Now, fresh tailwinds are forming for altcoins. Retail investors, sidelined for much of this cycle, could return if the U.S. Federal Reserve begins cutting rates.
The report defines altcoin season clearly: it happens when 75% of the top 50 altcoins outperform Bitcoin over 90 days. The index currently sits in the low 40s but is climbing.
| Metric | Current Data | Signal |
|---|---|---|
| Bitcoin Dominance | Down from 65% (May) to ~59% (Aug) | Falling dominance signals rotation into alts |
| Altcoin Market Cap | $1.4T, up 50% since July | Strong demand despite lagging index |
| Altseason Index | Low 40s (needs 75) | Momentum building, not there yet |
| Money Market Funds | $7.2T record high | Cash pile that could rotate into crypto |
| ETH in Treasuries | 2.95M ETH held |
| Institutions betting on ETH-driven growth |
The significance of Coinbase report outlook goes beyond a simple prediction of altcoin price moves. It highlights a structural shift in the way capital is flowing across crypto. Bitcoin has historically been the first stop for institutional inflows, acting as a safe, liquid entry point. Once BTC stabilizes or slows in momentum, that capital often rotates into altcoins as investors search for higher returns.
This rotation is not random, it usually starts with Ethereum. ETH remains the backbone of decentralized finance, stablecoin settlements, and tokenized real-world assets.
At the same time, macro conditions are creating a fertile environment for this shift. Over $7 trillion is sitting in U.S. money market funds, waiting for more attractive opportunities. If the Federal Reserve cuts rates, as markets widely expect, some of this sidelined cash could flow into risk assets — crypto being one of the prime candidates. Pair that with improving liquidity in stablecoins and clearer regulations, and you have the recipe for altcoins to outperform.
In short, this matters because it signals a turning point. Altcoins are no longer just speculative side bets; they are becoming central to narratives around DeFi, RWAs, and the broader Web3 ecosystem. If Coinbase report forecast proves right, September 2025 could mark the start of a capital rotation that defines the next leg of the cycle.
The backdrop is equally important. The Fed is widely expected to cut rates in September. With over $7 trillion parked in cash funds, easing could push sidelined money back into risk assets. Coinbase argues this won’t mark a local top but rather a retail-led inflow cycle for crypto.
Liquidity is also recovering. Stablecoin regulation has improved, and trading depth is bouncing back after months of decline. Together, these factors make conditions ripe for altcoins.
If these align, September could mark the official start of altseason.
Coinbase’s outlook is optimistic: while the altcoin season index hasn’t hit its threshold, market signals are converging. Bitcoin dominance is sliding, altcoin caps are surging, and liquidity is improving. If the Fed delivers rate cuts as expected, altcoins may see a breakout rally into Q4 2025.
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