Large-cap altcoins could lead Bitcoin as institutional demand shapes the next rally

Institutional demand could put large-cap altcoins ahead of Bitcoin in the next crypto rally, with activity concentrated in assets supported by tokenization and real transactions, according to Canary Capital CEO Steve McClurg.

In a November 1 interview with Altcoin Daily, McClurg argued that institutional buying through exchange-traded funds and digital asset treasury companies would define the market’s next phase. His view challenges the familiar sequence in which Bitcoin advances before capital rotates into altcoins.

McClurg identified active protocols with substantial transactions and ongoing development as the strongest candidates for institutional interest. He warned that many inactive altcoins could lose their value, arguing that institutions were unlikely to buy obscure assets outside the top 20 without vehicles such as ETFs or corporate treasury holdings.

Tokenization was central to that assessment. McClurg said large banks and asset managers were building products and platforms, with adoption potentially accelerating over the next one to two years. But putting an asset on a blockchain does not automatically create buyers, he said. Issuers would initially need to provide distribution themselves, while lower costs than traditional transfer agents offered a more immediate benefit.

He highlighted XRP Ledger, Hedera, Injective, Sui and Solana as networks attracting institutional development or interest. McClurg described XRP Ledger’s approach as a gradual expansion through large-bank partnerships. He characterized Hedera as an enterprise data proposition, while pointing to interest in Injective, Sui and Solana for financial tokenization.

Institutional requirements for control could also influence adoption, he said. Financial companies want the ability to freeze or recover tokens, approve eligible participants and verify customer identities. McClurg argued that these capabilities matter to institutions even when they conflict with crypto’s emphasis on decentralization.

For Bitcoin, McClurg described institutional risk management as a force that could dampen volatility. Investors may buy Bitcoin while selling call options with strike prices 5–10% above the market, he said, limiting potential gains in exchange for option income.

Among privacy-focused assets, McClurg singled out Zcash and Litecoin. He described Zcash as the current leader in privacy but said it would not suit every user. Litecoin, he said, was being used for everyday transactions in emerging markets, with its MimbleWimble privacy feature providing another potential source of utility.

Turning to the U.S. midterm elections, McClurg said reduced political uncertainty could support risk appetite. He expected Democrats to win the House and Senate, while arguing that the Trump administration’s continued control of the executive branch, including the SEC and CFTC, could sustain a supportive policy environment for crypto.