Bitcoin Lag in Q3 Points to a “New Type” of Altcoin Season, Says Grayscale
Altcoins Outpaced BTC as Policy Shifts Boosted Select Sectors
Grayscale says the third quarter of 2025 may have marked an altcoin rally unlike previous cycles – driven not by collapsing Bitcoin dominance but by policy catalysts and shifting liquidity.
In a report released Thursday, the firm noted that while Bitcoin, Ether, AI-linked tokens and smart contract platforms all posted gains in Q3, BTC was the clear laggard compared to other sectors.
Smart contract platforms were among the strongest performers, helped by the passage of U.S. stablecoin legislation – likely the GENIUS Act signed in July. Meanwhile, AI-related cryptocurrencies, various currency tokens and Bitcoin trailed behind.
“Bitcoin underperformed other market segments, and the pattern of returns could be considered a crypto ‘alt season’ – although distinct from other periods of falling Bitcoin dominance in the past,” the report said.
Grayscale also pointed to three other Q3 trends:
- A rise in corporate treasuries holding diverse crypto tokens
- Accelerated U.S. stablecoin adoption
- Growing trading volume on centralized exchanges
The firm added that new U.S. policies – including a pending digital asset market structure bill – could further energize markets heading into Q4.
Even though Bitcoin hit a new all-time high above $120,000 in August, it still lagged major altcoins and even non-crypto assets like stocks and gold. Analysts have partly blamed that slowdown on stablecoins leaving centralized exchanges rather than being deployed into BTC and ETH.
ETF Tailwinds Could Fuel Q4 Momentum
As a leading crypto ETF provider, Grayscale also highlighted recent SEC approvals as a potential spark for continued growth.
The SEC’s greenlight of new listing standards for crypto ETFs is expected to speed up product launches, and the regulator has already approved Grayscale’s multi-asset product that offers exposure to Bitcoin, Ether, Solana, XRP and Cardano.
With policy momentum building and Bitcoin trailing other sectors for the first time in years, Grayscale suggests Q3’s market structure may signal a broader shift in how alt seasons play out going forward.
