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It's almost impossible to look around at any crypto related news right now on Twitter, Telegram, YouTube, etc. and fail to see the phrase "alt season" bandied about as if it were a national holiday. But what IS alt season? What are they talking about? I suppose we should first define it before looking at whether we're IN it or not.

What are "alts"?

Alts (or alternative cryptocurrencies) are basically everything that is NOT Bitcoin. From the $200B+ market cap Ethereum all the way down to the $4M+ mkt cap LeoFinance, alts include every blockchain using Bitcoin's groundbreaking financial network technology to create their own coin or token. Don't misunderstand me, they don't all USE Bitcoin's exact tech. But they are all cryptocurrencies and Bitcoin has paved the way for their creation. Think of it like Microsoft. They were (arguably) the first to come out with a mass-adopted operating system, thus paving the way for many different and competing, and some would say better, technologies. But for many, many years, there was Microsoft and there was everyone else.

Alt "season"

So then what is alt season? To answer that we have to look back into the past. Bitcoin has always led the way. In every market cycle since it's first block was mined in 2009, the price of Bitcoin has basically dictated the performance of the market as a whole. When Bitcoin goes up, wealth is created in Bitcoin and new money comes into the market. Some of that new money flows into Bitcoin as the leader, but another large (and growing) chunk doesn't want to buy Bitcoin at all time highs. They want the NEXT Bitcoin. So, dollars/pounds/euros etc. flow out of Bitcoin and into alts.

This chart shows what happened in the last bull run. As you can see, BTC started 2017 with over 90% of the overall market. Even as it went on its parabolic run to $20,000 at the end of the year, it's percentage of the crypto market as a whole dropped all the way down to 30%. Even as BTC grew from around a $20B mkt cap to over $350B, the market as a whole grew from roughly $22B to around $600B. In other words, BTC gained over $300B in mkt cap, but alts grew from around $2B to well over $200B of the overall market. That's 100x. Alt season.

The same thing is happening this time around. Bitcoin led the charge from the lows created by the lockdowns and reached roughly 75% dominance. It fell with the "summer of defi" and then spiked again as it broke the Dec 2017 all time high of $20,000 this past Christmas. It has since slowed down somewhat but what hasn't slowed down is market cap as a whole.

This chart shows that while Bitcoin has climbed to new highs, the overall crypto market has climbed even faster. Combine that with the first chart and you can see that the amount of money going into alts continues to grow. Quickly. So, to answer the second question: **yes, we are firmly entrenched in alt season*.

When will it end?

Now, the hardest of the three questions to answer: when will it end? Again, we need to go back and check the past. If history is any indicator, then we are just now beginning the parabolic phase of alt season. If you look back to 2017, August started with a $75B mkt cap. It peaked in January at $750B. That's a 10x. This year in August we started at a $340B mkt cap. It just hit $1.6T in the last 24 hrs. That's just shy of a 5x. So, if you compare apples to apples, we've got a long ways to go here. But this isn't apples to apples.

The case for alt season just getting started

There are many factors that can be pointed to that support this case.

1. The supply of Bitcoin on exchanges and available to the market continues to shrink.
2. The NUPL chart has not reached the insane levels it did in 2017.
3. The Fear/Greed index hasn't broached the Euphoria stage yet.
4. Bitcoin has only almost 3x'd compared to the 8-10x (and by some metrics, 20x) it did in 2017.
5. Large corporations continue to announce their entry into the cryptoverse. And last but not least...
6. My barber and cashier at the local grocer haven't asked me if I own Bitcoin yet.

All kidding aside, these are all very strong indicators that the best may be yet to come. Coupled with the fact that there are a growing number of well-known, far more intelligent people than me predicting prices in the low to mid six figures and a very compelling argument can be made that we're just getting started.

The case for alt season starting to peak

There are also quite a few factors that can be used to support this case as well.

1. While the supply is definitely shrinking, banks seem to be able to come up with ways to sell into the market, regardless of whether they hold actual Bitcoin or not. (a topic for a-whole-nother thread)
2. While the NUPL and Fear/Greed charts haven't topped out, they're not all that far away.
3. Bitcoin has almost 3x'd from it's all time high, IN THE LAST 50 days. And it's more than 15x'd from it's lows last March.
4. While there are a lot of companies making noise about "getting exposure", recent surveys have shown that the vast majority of CFO's aren't convinced. Plus, there are other ways for them to get that exposure without actually buying bitcoin itself. Buying Microstrategy stock, for example.
5. The fact that if you look at the top 500 coins on CoinGecko, you'll be hard-pressed to find one that hasn't already at least doubled in the last 60 days. Most of them have done better than that. And last but not least again....
6. While my barber and grocer haven't asked me about bitcoin, my neighbors and golf buddies are starting to.

*So, what does this all mean? Are we done or not? My opinion?

Not yet. The dynamics of the market have changed drastically from 2017. There are a far broader array of solid, tech driven "companies" (for lack of a better word) that have entered the space. In 2017 all you had to do was say ICO and your token mooned, regardless of whether there was any real tech behind it or not. While many lessons were learned the hard way by investors, an equal amount of lessons were learned by the tech teams bringing things to market. They need to have the tech already in place with an established use case for their tokens if they want them to work. And, for the most part, that's what we're seeing.

Over the last three years, **tens if not hundreds of billions of dollars have been spent/invested building the underlying infrastructure of the entire crypto world. And this is a global phenomenon. This isn't just the US or China or the UK or Germany. It's Venezuela, Korea, Japan, Vietnam, Australia, etc. On every continent across the globe billions of dollars are being spent to grow the space. That means that where last time around the network couldn't handle the heat, this time the industry as a whole is much more robust and prepared. Don't get me wrong, there are still many things that need to be built and improved, but it's certainly in a much better place to handle dynamic growth than it was three years ago.

I also believe that a second layer of "blue chip" entities have emerged over that same time frame. There's no question that Ethereum has become almost as mainstream as Bitcoin. With financial markets adding futures and other vehicles to grant access to institutions it is establishing itself as another lynchpin in the overall crypto markets. Right now, there's Bitcoin AND Ethereum and the rest.

With incredible volumes though, other entities have stepped in and now have a significant chance of growing the overall market and capturing market share as well. The "swap" companies, the "oracles", the "launching platforms" and more are all fleshing out and expanding the market in new and diverse ways. While many of them may end up struggling as the cream of the crop rises to the top, the amount of money continually flowing into the space means that there is probably room for almost everyone.

So, all that being said, while the market continues to reach new highs and the market as a whole continues to expand, I don't think we've seen the end of this yet. Going back in history, the "cycle" would predict another bear market starting towards the end of this year. Personally, I probably won't wait that long. No one ever sees the end coming and even when they start seeing the signs, they refuse to believe it. Take profits along the way and don't necessarily put them back in other things. When the market tanks, EVERYTHING tanks.

That was my biggest mistake from 2017. I took some profits, but then I immediately turned around and put them in new alt coins trying to grow it again. I mistakenly thought I was diversifying my risk when all I was doing was making it even harder to get out of things down the road and increasing my downside exposure even more. Lesson learned. As you get paper profits, make sure you hold onto some of them. Buy bitcoin, put them in stablecoins, add to your "blue chip" portfolio, or just put some cash back in your bank account if you feel safe with that. Whatever.

No one goes broke taking profits. That's the name of the game, right? Put money in and get more out? Don't forget that second part. It's really the only part that matters.

As always, these are just my opinions. I'm not a financial advisor and I'm not giving financial advice. This is for educational and informational purposes only. Cryptocurrencies are risky. The go up and they go down and you could lose all your money.

Thank you for reading! Feel free to comment. Good luck!

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