Bitcoin Gained 28% in Two Years While the Median Mid-Cap Altcoin Lost 74%

Bitcoin rose 28% over the past two years while the median mid-cap altcoin fell 74%, according to a joint report from analytics firm Glassnode and crypto exchange Bybit.

Decrypt reported the findings on 20 September. Ether, the second-largest cryptocurrency, ended the period roughly where it started, underlining how narrowly the gains were concentrated at the very top of the market.

A cycle without an altseason

The report describes the gap between bitcoin and everything else as the defining feature of the current cycle. While bitcoin compounded higher, mid-cap tokens lost half their value and then lost half again.

The choice of the median is significant. It reflects the experience of a typical mid-cap token, rather than an average that a handful of large winners could pull upwards.

That reverses a pattern many investors had come to expect. In earlier cycles, as a bitcoin rally matured, capital tended to rotate into smaller tokens, producing a so-called altseason in which riskier assets outperformed. Over the two years covered by the report, that rotation did not arrive.

For holders of diversified crypto portfolios, the result has been a long stretch in which owning almost anything other than bitcoin dragged on returns.

Leverage in the riskiest corners

The concentration also shows up in derivatives positioning. Bitcoin's futures open interest is worth about 2% of its market capitalisation, the report found. For speculative small caps the ratio is far higher, with PEPE near 24%.

Open interest measures the value of outstanding futures contracts. When it is large relative to an asset's market value, price moves can be amplified as leveraged positions are forced to close.

The figures suggest speculative froth has collected in the most volatile tokens, even as the market's largest asset has delivered most of the price gains.

Money follows performance

Institutional flows tell a similar story. Spot bitcoin ETFs have taken in roughly $55.2bn in cumulative net inflows. Ethereum funds have drawn about $13.1bn, though they recently recorded several consecutive days of outflows. Solana's newer and much smaller spot ETFs have attracted only a fraction of either amount.

Spot ETFs give advisers and institutions a regulated way to gain exposure without holding tokens directly. That channel has been far deeper for bitcoin than for any other asset, which helps explain where the money has gone.

The report's framing is that flows concentrate where performance concentrates. That can become self-reinforcing: strong returns attract fund money, and fund money supports returns.

Caveats and signs of a turn

The figures need some context. The report is a collaboration between Glassnode and Bybit, and its data run to the settled close on 23 August. Glassnode's venue coverage is limited, so the numbers describe the exchanges it tracks rather than the whole market.

Whether the rotation is now changing is the open question. Days before Decrypt's article, bitcoin climbed back above $80,000 following a dovish Federal Reserve forecast, and the rally lifted the wider market. Total crypto market capitalisation rose 4.6% in a single day to about $2.85tn.

Solana gained roughly 10% that day, and NEAR and Uniswap rose further, a breadth that Decrypt said had been missing for a year.

One strong session does not establish a trend. The signals to watch are whether altcoins can hold gains beyond a single day, whether ether funds return to steady inflows, and whether leverage in small caps unwinds or builds further.