Expectations vs. reality Cryptocurrency creators once envisioned a universe where countless tokens could compete for investors' money. In reality, aside from Bitcoin and a handful of digital assets, the rest have turned out to be unnecessary. In 2025 alone, altcoins have lost around $300 billion in market capitalization and have taken a nosedive since then. Even Ethereum, the second-largest token, is struggling to compete with the leader. While BTC/USD has broken several records, Ethereum remains far from its all-time highs.

Bitcoin vs. altcoin performance

Regulation, government support, and stronger institutional infrastructure have become the main ingredients for the success of digital assets. Although all tokens initially rallied after Donald Trump returned to the White House, by mid-year, it became clear how different they are in essence. The MarketVector index, which tracks the bottom half of the top 100 digital assets, plunged by 50%, while Bitcoin's dominance in the total crypto market cap rose by 9 percentage points, reaching 64%.

The BTC/USD rally has been strongly supported by the development of financial tools more typical of traditional markets. Derivatives and specialized ETFs have become essential to both Bitcoin and Ethereum. Capital inflows into these ETFs are among the key drivers of their price growth.

Capital flows into Bitcoin- and Ethereum-focused ETFs

Regulation plays a pivotal role in separating the leading digital assets from those heading toward extinction. New stablecoin legislation has fueled a $47 billion rise in their market cap over the past year. Some major players are now taking a closer look at this asset class. Amazon, for example, is exploring its potential. Coinbase, Kraken, and Robinhood are working to tokenize stocks in an effort to build a fast and user-friendly trading system.

As a result, the structure of the crypto asset market is evolving, driven by regulation, the emergence of new products and institutions, and a government stance increasingly favorable to digital assets. Interest in Bitcoin and stablecoins is rising, while many altcoins are at risk of turning to dust. A key part of this transformation is the clear separation of roles: stablecoins serve as payment instruments, while Bitcoin is a tradable asset.

The close correlation between BTC/USD and US stock indices also provides clues about Bitcoin's future trajectory. Global risk appetite is a critical factor in this dynamic. In that context, record highs in the S&P 500 are laying the groundwork for another potential Bitcoin rally.

Technically, the BTC/USD daily chart may be forming a broadening wedge reversal pattern. For that to play out, bears must defend resistance at 110,700. A breakout would signal a chance to add to long positions. A failed test, on the other hand, could trigger a reversal.