Bitcoin’s dominance is reaching new highs, possibly marking the beginning of a big altcoin rally phase, as per Raoul Pal. On May 8, the Bitcoin/S&P 500 ratio reached its all-time high of 17.725. This spike is a reminder of Bitcoin’s increasing value proposition over equities. This latest spike is a testament to how more investors are choosing crypto over traditional stocks. The change comes as US assets are experiencing historic inflows and amid some of the largest movements of Bitcoin by so-called whales.

In the process, the Bitcoin/S&P 500 ratio hit an all-time high. This increase demonstrates just how much value Bitcoin has gained compared to the growth of the S&P 500. This divergence highlights a broader changing investment landscape, with Bitcoin at the forefront as the most sought after and dominant asset class.

Bitcoin just pumped above $100,000. This boost set off a wave of market correction, forcing $970 million in liquidations—the highest since 2021. Despite this volatility, Bitcoin’s year-to-date performance still leads the pack versus traditional benchmarks.

Data further illustrates Bitcoin's robust growth. On every measured timeframe, Bitcoin has beaten the returns of the Nasdaq, proving once again that its financial market prowess is no fluke.

"Bitcoin has outperformed the Nasdaq over 1 day, 1 week, 1 month, Year-to-date, 1 year, 2 years, 3 years, 5 years, 10 years," - Matthew Sigel, head of digital assets research at VanEck

MicroStrategy’s Bitcoin holdings have exploded with a nice 50.1% increase. Recent additions, such as their $180.3 million purchase of 1,895 BTC, were a major catalyst for this increase. This strategic accumulation speaks to a deep conviction of Bitcoin’s long-term value.

The increasing pressure of traditional finance (TradFi) interests on the ecosystem is another factor determining the course of Bitcoin’s future. As institutional interest in Bitcoin increases, so too does the cryptocurrency’s dominance as an asset class in comparison to traditional equities.

More importantly, the recent data shows just how great those inflows into US assets truly are, especially since 2020. US equity funds alone snagged $1.2 trillion of these flows. Now over the 2022 bear market, they experienced a shockingly huge net outflow of $100 billion. Since 2007, US equity, corporate bond and Treasury funds have experienced a staggering $3.5 trillion in cumulative inflows. Remarkably, $2.5 trillion of that explosion happened after 2020 by itself. Kobeissi data underscore strong foreign investor appetite for US assets. This positive trend can mask a broader bullish market dynamic at play that benefits the price of Bitcoin.

Raoul Pal’s prediction that Bitcoin dominance has peaked to pave the way for altcoin season would tend to support that notion. In other words, the “Banana Zone” phase has the potential to invigorate altcoins with explosive growth. Increased liquidity and increasing investor demand in the overall cryptocurrency market will drive this growth.