Analyst Warns: Institutional Shift May End Cryptocurrency's 'Full Recovery'

As the market undergoes a fundamental restructuring, a senior analyst from a major South Korean securities firm has indicated that the era of all cryptocurrencies rising together—often referred to as a 'full recovery'—may soon come to an end. Choi Yoon-young, head of the digital asset research team at Hanwha Investment & Securities, pointed out in an interview with the Seoul Economic Daily on May 27 that the market is experiencing a fundamental change driven by institutional investment.

Bitcoin Dominates Market Restructuring

Choi believes that the digital asset market is restructuring around Bitcoin, with altcoins becoming more selective and unpredictable in their performance. In the past, market enthusiasm would drive nearly all tokens to rise together, but this pattern is breaking down. 'Institutionalization is the biggest change in the digital asset market,' Choi stated. He noted that while the four-year halving cycle used to dominate the narrative, the market is now much more sensitive to macroeconomic conditions and liquidity trends.

Macroeconomic Forces Replace Halving Cycle

According to Choi's analysis, Bitcoin is solidifying its position as an asset class sensitive to macro variables such as interest rate decisions and liquidity expansion. This marks a significant shift from its earlier reputation as a purely speculative or niche asset. 'Bitcoin is becoming an asset sensitive to macro variables like interest rate cuts and liquidity expansion,' he explained. This evolution aligns with the trend of increasing institutional participants in traditional finance viewing Bitcoin as a macro hedge or portfolio diversification tool.

Impact on Altcoin Investors

For investors holding small-cap cryptocurrencies, the impact is significant. The 'full recovery'—where even weak projects can gain value in a rising market—is unlikely to reoccur. Instead, capital is expected to flow more selectively into altcoins with strong fundamentals, clear use cases, or institutional support. Projects lacking these characteristics may struggle to attract sustained interest. Choi's assessment reflects a maturing market, with institutional participation reshaping price dynamics. The transition from a retail-driven, narrative-focused market to one influenced by macroeconomic factors and institutional behavior represents a structural change. For readers, the key takeaway is that the future of the crypto market may no longer resemble a lottery, but rather a traditional financial market, albeit still volatile.