ETF, stablecoins, and the tokenization of physical assets mark the end of a four-year cycle, and the "altcoin season" may disappear forever.

The cryptocurrency market is undergoing an unprecedented structural transformation. With institutional capital pouring in on a large scale through ETFs, stablecoins, and the tokenization of real assets, the Bitcoin four-year Halving cycle that has dominated the market for over a decade, along with the subsequent "altcoin season," may have become a thing of the past. This shift not only redefines the investment logic of crypto assets but may also fundamentally change the development trajectory of the entire industry.

####Institutional Capital Reshapes the Market: ETFs Become the New Dominant Force

(Source: CryptoQuant)

The launch of Bitcoin and Ethereum ETFs in 2024 marks a new era for the crypto market. According to a report released by analyst Ignas on September 24, (https://www.ignasdefi.com/p/the-changing-crypto-order), crypto ETFs have led all asset classes with an astonishing inflow of $34 billion since April, fundamentally changing the market structure and participant composition.

The Bitcoin ETF currently manages assets exceeding $150 billion, controlling 6% of the total Bitcoin supply; the Ethereum ETF holds 5.6% of the ETH supply. These numbers may seem small, but considering that these products have only been launched for a few months, their impact is quite remarkable.

"We are witnessing a 'Crypto Assets Great Rotation,'" a senior market analyst said. "Ownership is shifting from short-term retail speculators to long-term institutional allocators, fundamentally changing market dynamics."

More importantly, the universal listing standards for commodity ETPs approved in September will accelerate this transformation, paving the way for ETF applications for Solana, XRP, and other digital assets. This means that institutional capital will no longer be limited to Bitcoin and Ethereum, but may expand into a broader range of Crypto Assets.

####The Shift in Supply and Demand Dynamics Between Institutions and Retail Investors

The traditional four-year cycle theory posits that Bitcoin Halving events lead to a reduction in supply, which in turn drives prices up, ultimately triggering speculative bubbles and crashes. However, the emergence of ETFs has completely changed this pattern.

"When traditional four-year cycle believers sell after the Halving, institutional investors are steadily absorbing this supply," the report states. "This not only resets the cost basis to a higher level but also establishes a new price floor, fundamentally altering the supply and demand conditions that have historically driven the cycle patterns."

####Stablecoin and Real Asset Tokenization: Building Permanent Financial Infrastructure

The role of stablecoins has evolved from a simple trading tool to a comprehensive financial infrastructure, encompassing various functions such as payments, lending, and financial management. This transformation has not only enhanced the practicality of the crypto ecosystem but also reduced the market's reliance on the spot demand for Bitcoin and Ethereum.

The U.S. Commodity Futures Trading Commission (CFTC) recently approved stablecoins as collateral for derivatives, a decision that creates demand channels beyond spot purchases for institutional participants. At the same time, payment-focused blockchain solutions, such as Stripe's Tempo and Tether's Plasma, are driving the application of stablecoins in the real economy.

"Stablecoins are no longer just tools for speculative trading, but have become a key bridge connecting traditional finance and the crypto world," explained a fintech expert. "This transformation has brought unprecedented credibility and stability to the entire industry."

####Real Asset Tokenization (RWA) Creates a True On-Chain Capital Market

The tokenization market for physical assets, currently valued at $30 billion, is rapidly expanding, with tokenized government bonds, credit, and commodities creating a real capital market on the chain. Products like BlackRock's BUIDL and Franklin Templeton's BENJI represent institutional bridges connecting trillions of dollars in traditional capital with crypto infrastructure.

These developments enable decentralized finance (DeFi) protocols to achieve relevance beyond speculative cycles through legitimate collateral and lending markets, providing a more solid foundation for the entire ecosystem.

####Digital Asset Fund Management (DAT): Paving New Paths for alts

Digital Asset Fund Management (DAT) companies are providing a pathway for tokens that have not yet received ETF approval to enter the stock market. These innovative frameworks allow projects with real revenue and users to reach stock market investors whose capital far exceeds that of retail crypto investors.

"The DAT mechanism provides exit liquidity for venture capital positions while bringing institutional capital into the altcoin market," the report stated. "This could fundamentally change the investment logic and value assessment methods of altcoins."

####New Era Investment Logic: From Speculation to Fundamentals

With the shift in market structure, investment logic is undergoing fundamental changes. Institutional capital demands sustainable business models and real value creation, rather than relying solely on narrative-driven price appreciation.

#####· Selective Token Performance Replaces Broad Market Rebound

In this new era, we may no longer witness the past phenomenon of all alts soaring simultaneously known as "altcoin season." Instead, specific tokens with real use cases, robust business models, and institutional recognition will attract selective capital favor.

"The future winners will be those who can prove that they are not just speculative assets, but projects that truly solve real problems," said a Crypto Assets investment fund manager. "Tokens that purely rely on hype and community sentiment may be eliminated by the market."

#####· New Valuation Standards and Investment Framework

With the influx of institutional capital, the valuation standards of crypto assets are also changing. Traditional technical analysis and cycle theories may give way to more rigorous fundamental analysis, including:

Actual Revenue and User Metrics: Active Users, Trading Volume, Fee Revenue, etc.

Governance Structure and Team Background: Professional management team and transparent governance mechanism

Regulatory Compliance: Adapting to or conforming to the evolving regulatory framework

Technical Innovation and Practicality: The ability to solve real-world problems and technological advantages.

Institution Adoption Potential: The likelihood of being accepted and integrated by traditional financial institutions.

####How should investors respond to this change?

In the face of fundamental changes in market structure, investors need to adjust their strategies to adapt to the new environment:

#####1. Reassess Investment Portfolio

Examine the current crypto assets held and assess their competitiveness in the new market environment. Projects with real use cases, robust revenue models, and institutional recognition may be worth more allocation.

#####2. Pay Attention to Institutional Trends

Pay close attention to the inflow of ETFs, announcements from institutional investors, and the cryptocurrency strategies of traditional financial companies, as these may become important indicators of market direction.

#####3. Understanding the New Market Cycle

Instead of simply relying on the four-year Halving cycle theory, we focus more on broader market drivers such as macroeconomic factors, regulatory developments, and institutional capital flows.

#####4. Investment in physical asset tokenization and infrastructure

Consider increasing allocations to stablecoin ecosystems, tokenization platforms for physical assets, and infrastructure projects that support institutional adoption.

#####5. Long-term Perspective

Adopt a longer-term investment perspective, reduce short-term speculative trading, and focus on projects that have the potential to become part of permanent financial infrastructure.

####Conclusion: Opportunities and Challenges in the New Era

The crypto assets market is undergoing a transition from a speculative asset class to a mature financial infrastructure. While this may signal the end of the traditional four-year cycle and altcoin season, it also creates a more sustainable and inclusive growth model.

For investors and projects that can adapt to this new environment, future opportunities may be broader than ever before. However, this also requires market participants to embrace change and develop new analytical frameworks and investment strategies to succeed in this institution-led new era.