Bitcoin Dominance Wanes, 'Altcoins' Rise...Solana, Ethereum, Rally Expectations Spread

▲ Altcoin/AI generated image

While Bitcoin (BTC) holds strong, the market's funds are shifting to altcoins, and bullish sentiment surrounding Solana (SOL) and Ethereum (ETH) has once again come to the forefront of the cryptocurrency market.

On May 31 (local time), the crypto-specialized YouTube channel Altcoin Daily reported that while Bitcoin's price shows strong resilience, Bitcoin dominance is rapidly declining, and liquidity is moving into altcoins. The video likened Bitcoin's price to a “beach ball held underwater,” explaining that even with continued upward pressure, the market's real interest is spreading to altcoins.

Mike Novogratz, founder of Galaxy Digital, asserted that altcoin season has begun, and it's particularly Solana's time. Novogratz stated that Solana can process 14 billion transactions per day, a volume greater than the combined total transactions of stock, bond, commodity, and foreign exchange markets. He explained that Solana is a fast enough network to be designed as a blockchain for financial markets, and coupled with the U.S. Securities and Exchange Commission chairman's remarks on on-chain development, a “Solana season” could emerge.

The macroeconomic environment was also presented as a factor bolstering bullish crypto sentiment. The video explained that the Chicago Purchasing Managers' Index (PMI) significantly exceeded expectations, indicating an Institute for Supply Management (ISM) manufacturing index above 55. Bitwise's Head of European Research opined that if Bitcoin continues to follow growth stocks and risk-on asset preferences, it should be revalued higher than its current level. Furthermore, the S&P 500 hitting an all-time high, showing nine consecutive weeks of gains for the first time in three years, and rising approximately 16% in April and May, were also cited as background for the overall strength in risk assets.

The U.S. Crypto Market Structure Bill (CLARITY Act) has also emerged as a key market variable. The video referred to June as “the month of CLARITY,” pointing out that if significant progress isn't made before the midterm elections, the likelihood of its passage could decrease. Representative Tom Emmer warned that without a market structure bill, crypto capital and entrepreneurs could leave the U.S. He emphasized that crypto companies need clear guidance on which agency—CFTC, SEC, FDIC, or Treasury—supervises them, likening a situation with only a stablecoin bill and no market structure bill to a “cell phone without a base station.”

Bullish sentiment for Ethereum was also clearly presented. The video evaluated Ethereum around $2,000 as one of the biggest opportunities in the market, explaining that as asset tokenization expands, Ethereum's usage and burn rate will increase, making its supply scarcer. Tom Lee predicted that as Wall Street seeks to tokenize all assets, Ethereum's utility will grow, potentially reaching beyond $9,000 to $20,000 in the long term. Joseph Chalom, a former BlackRock executive, claimed that Ethereum possesses the trust, liquidity, and security required for institutional adoption, with over 50% of the world's stablecoin value settled on Ethereum, and that 70% of future tokenized assets could enter the Ethereum ecosystem.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*