Bitcoin gains 28% while mid-caps lose 74%
The figure deserves a careful look. Over two years, Bitcoin gained approximately 28%. At the same time, the median mid-cap altcoin lost 74%. BrefCrypto recently noted that spectacular gains in some altcoins do not mean the market as a whole is rising. The new data give that fragmentation a much longer-term perspective.
The important word is “median.” Glassnode and Bybit are not saying that every altcoin lost 74%, or that the average of all tokens in the market stands exactly at that level. They are looking at the median asset in the group studied—one way to prevent a handful of exceptional performances from completely distorting the market snapshot.
And the picture is harsh.
An asset can gain 150%, 300% or 1,000% and dominate attention on X for a few weeks. That changes nothing for the hundreds of other tokens that gradually lose their liquidity, narrative and buyers. The crypto market loves survivors. It talks much less about assets that fall from $10 to $2, then from $2 to 60 cents.
Over this two-year period, Bitcoin did not merely outperform mid-caps. The gap reached 102 percentage points between +28% and -74%.
That is enormous.
And even Ethereum, the world’s second-largest cryptocurrency, failed to keep pace: ETH ended the period broadly flat.
$1,000 tells the story better
Consider three hypothetical portfolios, each starting with $1,000.
The first buys only Bitcoin. With a return of +28%, it ends at around $1,280. The second takes comparable exposure to the median mid-cap altcoin tracked in the study. After a 74% decline, only about $260 remains. The third holds Ethereum and ends approximately around its initial capital, since the two-year performance was close to zero.
That is what the difference really represents.
The Bitcoin investor has nearly five times the remaining capital of the investor exposed to the median mid-cap. For $260 to simply return to $1,000, it would then require a gain of approximately 285%. Not to become wealthy—just to get back to the starting point.
This is a mathematical feature often underestimated during bear markets. A 50% loss requires a subsequent 100% gain to be erased. A 74% loss requires almost a fourfold increase. Deep losses therefore become increasingly difficult to recover.
The idea that “the altcoin will eventually recover” becomes particularly costly when capital remains tied up while Bitcoin advances.
Put differently, the comparison is not only about what Bitcoin gained. It is also about the opportunity cost incurred elsewhere.
Someone who waits two years just to return to breakeven has not only lost time. They have also missed the rise of the asset that was actually leading the cycle.
The expected altseason never really arrived
The traditional scenario was almost second nature.
Bitcoin rises first. Profits then move into Ethereum. Large caps follow, then mid-caps, small caps and finally the most speculative assets. This rotation fueled several major “altseasons” in previous cycles.
This time, the mechanism worked much less cleanly.
As of September 21, CoinMarketCap’s Altcoin Season Index stood at around 49 out of 100. For the aggregator to classify the market as “Altcoin Season,” 75% of the 100 largest eligible cryptocurrencies must have outperformed Bitcoin over the previous 90 days. We are still far from that threshold. Bitcoin dominance, meanwhile, remains around 58.5%.
BrefCrypto had already noted that the next altseason could be much more selective than previous ones. The two-year record reinforces that view.
A few tokens can explode without triggering a broad-based rally.
A small-cap cryptocurrency can gain 80% in a few days because a new narrative attracts a few tens of millions of dollars. To produce the same move in Bitcoin, hundreds of billions of dollars in market value would have to shift.
The two phenomena can therefore coexist: Bitcoin structurally dominates the cycle while a handful of altcoins occasionally deliver much higher returns.
The trap is confusing visible winners with the return of the median market asset.
The +100% gains make the screenshots. The -74% losses tell the story of the ordinary portfolio.
Wall Street is concentrating its money on Bitcoin too
This divergence is probably not unrelated to the arrival of ETFs.
Data from Farside Investors show that, as of September 18, U.S. spot Bitcoin ETFs had accumulated approximately $55.1 billion in net inflows. For Ethereum, the total was around $13.3 billion.
The ratio is greater than four to one.
This capital does not automatically flow from Bitcoin into altcoins. A manager buying BlackRock’s IBIT gains no exposure to Solana, Avalanche, Chainlink or a DeFi token. The money remains in a regulated product whose underlying asset is BTC.
This infrastructure changes part of the market’s historical mechanics. Previous cycles depended much more heavily on crypto exchanges, stablecoins and rotation among sector-native traders. Today, billions can enter Bitcoin directly from traditional markets without ever reaching the rest of the ecosystem.
BlackRock’s IBIT Bitcoin ETF had already outperformed the Vanguard S&P 500 since its launch, with approximately $60 billion in net assets in early September.
Bitcoin now has its own institutional channel.
Ethereum has one as well, but flows remain significantly lower. For mid-caps, this financial highway practically does not exist.
Capital concentrates where liquidity, regulation, institutional custody and financial products are already available. That concentration can then become self-reinforcing: greater liquidity attracts more large investors, who further strengthen liquidity.
Leverage remains more aggressive in smaller assets
That is the cycle’s paradox.
Bitcoin performed better, but speculative excess is not necessarily concentrated in Bitcoin.
The Glassnode and Bybit analysis estimates that Bitcoin futures open interest represents approximately 2% of its market capitalization. For PEPE, that ratio rises to around 24%. In other words, relative to the asset’s size, the weight of derivatives positions can be twelve times higher for this memecoin.
This helps explain why some altcoins produce spectacular moves even when the underlying trend remains poor.
Imagine a small market with a huge number of leveraged positions. An initial rise liquidates short sellers. The exchange automatically buys the tokens needed to close their positions. Those purchases push the price higher, trigger further liquidations and create a short squeeze.
The chart looks magnificent.
The market’s fundamentals may barely have changed.
The Glassnode and Bybit report goes further on derivatives. Options now account for nearly half of notional Bitcoin derivatives open interest on the crypto-native platforms studied, compared with roughly one-quarter previously. Dated futures have lost ground while perpetual contracts absorb more leverage. Glassnode details this transformation in its joint report with Bybit.
The market is becoming more sophisticated. Not necessarily less dangerous.
Ethereum holds up without really beating Bitcoin
Ethereum deserves separate treatment.
Seeing it nearly flat over two years may seem mediocre compared with Bitcoin’s +28%. Next to the median altcoin’s -74%, however, the picture changes immediately. ETH largely avoided the destruction of value seen across much of the middle of the market.
Its recent behavior also shows why time frames matter.
Ethereum recently briefly exceeded +67% in the third quarter of 2026. A spectacular quarterly performance can therefore coexist with an almost flat return over two years.
That is precisely why a single candle is not enough to establish a structural trend.
Ethereum has several advantages that mid-caps do not: enormous market capitalization, U.S. spot ETFs, a developed DeFi ecosystem, stablecoins, staking and infrastructure used by dozens of protocols. Yet even with all that, ETH did not outperform Bitcoin over the period analyzed.
The conclusion becomes fairly severe for the rest of the market.
If the second-largest crypto asset by market capitalization struggles to produce a return higher than BTC over two years, smaller projects must compensate for their much higher risk with significantly stronger performance. On a median basis, that did not happen.
Investors took on more risk.
They earned less in return.
That is exactly the opposite of what additional risk is supposed to reward.
Bitcoin has changed the definition of crypto diversification
It would be too simple to conclude that all altcoins are doomed or that Bitcoin will outperform forever. The Glassnode and Bybit data describe the past two years, not the next two.
A rotation remains possible. Some blockchain infrastructure will continue to generate value. New protocols will emerge. Ethereum may outperform. Mid-caps may still deliver 5x or 10x returns. The crypto market has never been uniform.
Nevertheless, the record forces investors to abandon a lazy assumption: owning more tokens does not necessarily mean being better diversified.
A portfolio made up of 20 assets that are highly correlated with Bitcoin, more volatile than Bitcoin and structurally weaker when liquidity disappears does not necessarily provide 20 different sources of return. It may simply multiply the ways to lose during a correction.
Some professionals are beginning to draw this line as well. Peregrine Capital recently distinguished Bitcoin from meme coins, which it equated with a particularly speculative form of gambling.
The past two years now provide figures for that distinction.
Bitcoin: +28%.
Ethereum: approximately 0%.
Median mid-cap altcoin: -74%.
For a long time, crypto sold the idea that the best returns were necessarily found further out along the risk curve. This cycle told a different story. The simplest capital allocation, placed in the market’s most liquid and oldest asset, significantly outperformed the more adventurous median portfolio.
It will take a genuine, lasting and sufficiently broad rotation to reverse this record. A few 30% pumps, one euphoric week or three memecoins up 100% are not enough.
For now, the past two years primarily support a strategy that seemed almost too simple for crypto: hold Bitcoin and let much of the rest of the market chase it.
