Bitcoin Dominance Grows As Altcoins Post Another Losing Year: Analyst

Overview

In recent years, altcoins have consistently underperformed against Bitcoin, culminating in a fourth consecutive year of losses. This trend has prompted traders and fund managers to reassess traditional market behaviors, particularly the expectation that smaller tokens would rally following Bitcoin’s gains.

Altcoin Underperformance

The performance of altcoins relative to Bitcoin has been tracked using the TOTAL3/BTC ratio, which measures the value of all altcoins, excluding Bitcoin and Ethereum, against Bitcoin. This ratio has shown a downward trend for four consecutive years, specifically in the years 2022, 2023, 2024, and 2025. As a result, traders are now reconsidering the historical pattern of altcoins surging after Bitcoin rallies.

During the late 2025 selloff, Bitcoin’s dominance in the overall crypto market increased, reported at approximately 59–60%. This shift has created challenges for smaller tokens, which reached their lowest market value in four years as investors favored larger, more liquid assets. Although Bitcoin itself experienced a decline from its peak in October, it still managed to close the year in negative territory, marking its first annual loss since 2022.

Market Dynamics

The overall market landscape exhibited widespread losses in 2025, with the median performance among the top 30 altcoins reported as negative. The total market capitalization of the crypto sector saw a significant decline, with estimates indicating that over $1 trillion was lost during the downturn. This dramatic shift occurred in a year that began with optimism but ended with losses, as many smaller tokens that had initially gained value lost their momentum when risk appetite diminished.

Analysts have pointed to several factors influencing this trend. Institutional flows and a preference for liquidity among investors have been highlighted as key drivers. Additionally, macroeconomic pressures within the US and global markets have been noted as reducing interest in speculative investments. For altcoins to regain their footing and outperform Bitcoin, analysts suggest that new capital must specifically flow into smaller tokens rather than merely following Bitcoin’s price movements. Currently, this necessary shift has not yet materialized as 2026 progresses.

The TOTAL3/BTC measure has become a critical tool for traders to assess the strength of altcoins relative to Bitcoin. A persistent decline in this ratio signifies that Bitcoin is increasingly able to purchase a larger share of the altcoin market cap, which diverges from previous cycles where altcoins occasionally outperformed Bitcoin.

From author

The current landscape of the crypto market underscores significant challenges for altcoins, as evidenced by their four-year streak of underperformance against Bitcoin. The shift in investor behavior, driven by a preference for larger, more stable assets, has created a difficult environment for smaller tokens. As analysts continue to monitor market trends, it remains crucial to observe how capital flows and market sentiment evolve.

Impact on the crypto market

• Bitcoin’s dominance has increased, squeezing smaller tokens out of the market.
• The total market capitalization of the crypto sector has seen a sharp decline.
• Altcoins have demonstrated consistent underperformance, raising concerns among traders.
• Institutional flows and liquidity preferences are shaping investment strategies.
• The current market sentiment remains cautious, impacting the potential for altcoin recovery.
• A significant shift in capital flows towards altcoins will be necessary for any meaningful rebound.