Despite the prevailing narrative that the Bitcoin and the broader crypto market is in a bull run, recent data suggests investors are becoming increasingly risk-averse.
In an X post on Tuesday, February 11, crypto analytics platform Glassnode shared data highlighting that Bitcoin‘s market cap hit a local peak of $2.1 trillion on January 21, while altcoins, excluding Ethereum and stablecoins, saw their peak well over a month before at $1.03 trillion on December 8.
At the same time, the firm noted that Bitcoin’s market cap has since dropped 8.2%, while the market caps of these altcoins have declined by a staggering 29.8%.
Glassnode noted that the contrast showed “a shift in capital preferences.”
Indeed, the data indicates risk aversion and a flight to relative stability in Bitcoin, which is more established and historically less volatile than altcoins.
The shift comes amid rapidly changing macroeconomic conditions.
For one, before mid-December 2024, investors were anticipating a rapid loosening of monetary policy in 2025, hoping that some excess capital would bolster the rally among crypto assets.
These hopes were, however, dashed. In December 2024, the U.S. Federal Reserve projected fewer than-expected rate cuts for 2025, arguing that inflation continues to linger.
The situation has been further complicated by trade war concerns, which have risen amid President Donald Trump’s largely unexpected barrage of tariffs in recent weeks.
Still, most analysts remain optimistic that the crypto bull market is far from over. One reason for this is the Trump administration’s significantly pro-crypto leanings.
From looming regulatory overhauls to talks of a strategic crypto stockpile or Bitcoin reserve, the administration seems set to support the industry like none before it, sparking hopes of long-term positive market effects.
As observers await these effects, the market continues to idle, with Bitcoin trading in a tight range just below the $100,000 price point.
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