Coinbase’s latest monthly market report, released on August 14, hints that the crypto market could be gearing up for an altcoin season. Since July, the total altcoin market cap has surged by 50%, while Bitcoin’s dominance has dropped from 65% in May to about 59% in August.
Although the Altcoin Season Index on CoinMarketCap is still in the low 40s — below the 75 mark often used to confirm a true altcoin season — Coinbase believes the signs are lining up for a potential shift as September approaches.
Big Money Moving to Ethereum
Coinbase says much of the momentum comes from rising institutional demand for Ethereum. Digital asset treasuries now hold nearly 3 million ETH, which is just over 2% of the total supply. One company, Bitmine Immersion Technologies, bought 1.15 million ETH this year alone, backed by a massive $20 billion fundraising.
This Ethereum hype has spilled into related tokens like Arbitrum (ARB), Ethena (ENA), Lido DAO (LDO), and Optimism (OP). Lido has been the star performer, jumping 58% so far this month. Coinbase notes that LDO is a popular way to gain ETH exposure through liquid staking, and recent SEC guidance — suggesting certain liquid staking services may not be treated as securities — has likely fueled the rally.
Liquidity Is Coming Back
Coinbase also points to a record $7.2 trillion sitting in U.S. money market funds as a potential source of fresh capital. With the U.S. Federal Reserve expected to cut interest rates in September and October, the lower yields could push more retail investors toward crypto and other riskier assets.
Their liquidity index — which measures stablecoin issuance, trading activity, and order book depth — is on the rise again after six months of decline. This recovery could accelerate with clearer regulations around stablecoins and digital assets.
While Coinbase stops short of declaring that altcoin season is officially here, it sees a strong setup for the months ahead. With Bitcoin dominance slipping, Ethereum attracting big institutional money, and liquidity improving, the stage may be set for a major altcoin rally in Q3 2025.
