As Bitcoin approaches its all-time high, excitement is building around a potential “altcoin season” across the crypto market. In a recent ETMarkets live stream, Anush Jafer, Content Lead at Mudrex Research, shared insights into how Bitcoin’s price movement could shape the broader cryptocurrency landscape and spark opportunities for altcoins.

Jafer highlighted Bitcoin’s resilience in its climb toward previous highs, a journey that has reignited discussions about its role as a market driver. “When Bitcoin reaches these levels, the impact on the entire cryptocurrency market is significant,” Jafer noted, suggesting that Bitcoin’s strength often triggers a market-wide reaction. Historically, Bitcoin rallies have been followed by altcoin surges, known as “altcoin season,” where alternative cryptocurrencies gain traction and attract new capital.

Altcoins Positioned for Growth

According to Jafer, Bitcoin’s rise could bring altcoins into the spotlight, as altcoin prices often respond to Bitcoin’s performance. “As Bitcoin gains momentum, it could spark renewed interest in altcoins, especially those with unique technology or specific use cases,” he said. Jafer highlighted sectors within the altcoin market likely to benefit from this overflow of attention and capital, including decentralized finance (DeFi), layer-2 solutions, and blockchain gaming.

Key Market Drivers: Institutional Interest and Regulation

Jafer pointed to two key factors influencing the crypto market: growing institutional interest in Bitcoin and changing regulatory landscapes. Institutional investors are increasingly considering Bitcoin for their portfolios, a move that could stabilize the cryptocurrency and boost market confidence. “Institutional involvement can help sustain Bitcoin’s price, and combined with favorable regulatory developments, this could create a positive environment for altcoins,” Jafer explained.

He added that regulatory clarity around digital assets could attract investors to the crypto space. As global regulators intensify their focus on crypto, the market is both cautious and optimistic. Supportive regulations could alleviate perceived risks for altcoins, drawing in investors who have been hesitant due to legal uncertainties.

Caution Amid Market Volatility

Despite the potential for an altcoin season, Jafer advised caution due to the crypto market’s inherent volatility. “Altcoins have growth potential, but investors should remain cautious, especially as regulations evolve,” he said. Jafer recommended a diversified portfolio focused on solid projects rather than speculative tokens.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)