The Surprising Shift in Crypto Momentum
Throughout 2025, Ethereum and select altcoins have delivered strong performances, yet a full-scale altcoin season has struggled to materialize. Analysts suggest that the unexpected rally in gold is one of the main reasons why risk-taking capital is being diverted away from crypto markets. Investors appear to be adopting a cautious, risk-off strategy, allocating more money into precious metals while keeping crypto exposure limited.
Crypto analyst Michael van de Poppe has been vocal about this connection, noting that as long as gold continues to climb, investors remain hesitant to fully embrace altcoins. Yet, he emphasizes that the gold chart is showing signs of a local top, which could mark the turning point for altcoins.
Altcoin Season and Gold Correlation
Historically, gold has acted as a barometer of investor risk appetite. When gold rallies strongly, it signals risk aversion, drawing liquidity away from riskier assets like cryptocurrencies. Conversely, when gold stabilizes or retraces, investors often rotate back into high-risk/high-reward assets such as altcoins.
Van de Poppe explains that Ethereum has been the key driver of altcoin gains this year, but the broader market has been unable to take off. Gold’s strength, returning over 8% in September, highlights investors’ preference for safety. For comparison, Ethereum managed to outperform gold with 15% gains, but most altcoins have lagged behind.
Meanwhile, Bitcoin has shown mixed results. According to data from ecoinometrics, Bitcoin ended August with -15% returns, while gold maintained its steady upward trajectory. This divergence has kept traders cautious, delaying what many are calling Altcoin Season 3.0.
Performance Snapshot: Gold vs. Crypto in 2025 (YTD)
Here’s a quick look at how gold, Ethereum, Bitcoin, and altcoins have fared so far in 2025:
| Asset Class | 2025 YTD Performance | Key Drivers | Investor Sentiment |
|---|---|---|---|
| Gold | +30% overall / +8% in September | Fed rate cut expectations, geopolitical uncertainty, inflation hedge | Strong demand as a safe-haven asset |
| Ethereum | +15% in September / +50% YTD | Ethereum network upgrades, AI & DeFi adoption | Positive, seen as the leader of altcoin momentum |
| Altcoins (ex-ETH) | +5–12% average | Limited liquidity, reliance on ETH momentum, cautious risk appetite | Mixed, awaiting broader breakout |
| Bitcoin | -15% in August / +17% YTD | Institutional accumulation, ETF flows, macro uncertainty | Neutral, consolidating after record highs |
What Happens to Altcoins in September and Beyond?
The upcoming FOMC meeting on September 17 could play a decisive role. If the Federal Reserve moves forward with a rate cut, it would inject new liquidity into financial markets, potentially setting the stage for a crypto resurgence.
Analyst Crypto Patel believes the altcoin rally is still in its early innings, predicting that once Bitcoin dominance drops to 40-45%, altcoins could see explosive upside potential — with many high-quality projects delivering 5x or more returns.
Similarly, commentator 0xNobler highlights that altcoin supercycles have historically kicked off in September. In previous cycles, low-cap altcoins delivered 100x–125x returns, and he suggests that Altcoin Season 3.0 could replicate similar gains.
The Bigger Picture: Market Cycles and Patterns
If history is any guide, altcoin seasons tend to follow a four-year cycle, often aligning with major shifts in Bitcoin’s dominance and broader macroeconomic liquidity.
- In 2017–2018, altcoins surged up to 100x as Bitcoin consolidated.
- In 2021, smaller-cap tokens delivered 125x returns for early investors.
- Now in 2025, with Bitcoin consolidating, Ethereum leading the charge, and liquidity expected to expand post-Fed rate cuts, conditions appear ripe for a similar breakout.
However, unlike earlier cycles, today’s market also faces new challenges: rising competition from AI-driven investment strategies, tighter regulatory oversight, and stronger correlation with global macro events such as gold rallies and currency fluctuations.
Why Gold Matters More Than Ever
For many traders, gold’s rally is more than just a competing asset class — it’s a psychological barrier. As long as investors feel safer in gold, altcoins may struggle to gain significant traction. But if gold indeed reaches a short-term peak, capital could rotate quickly back into crypto markets, particularly Ethereum and high-potential altcoins.
Michael van de Poppe calls this a pivotal moment, noting that the next three to six months will determine whether altcoins enter a parabolic rally phase or remain stuck in sideways consolidation.
Final Outlook: Altcoin Season 3.0 May Just Be Delayed
While gold’s surge has temporarily delayed the onset of Altcoin Season 3.0, the structural setup for altcoins remains strong. With Ethereum outperforming and Bitcoin dominance trending lower, the conditions are aligning for a broad-based altcoin breakout — just not immediately.
As macroeconomic events unfold, particularly the Fed’s rate decision and potential gold retracement, altcoins could find themselves at the center of the next major crypto rally. For now, patience, positioning, and risk management remain the keys for investors eyeing the next big wave in crypto markets.