Bitcoin’s (BTC) share of the total crypto market, known as its dominance, tanked Thursday after a U.S. court complicated the Securities and Exchange Commission’s (SEC) plan to regulate digital assets and spurred hopes for a sustained outperformance of alternative cryptocurrencies, often called the “alt season.”

In a highly anticipated ruling in the SEC’s case against Ripple Labs for violating securities law through XRP sales, the District Court for the Southern District of New York ruled that XRP is not a security when offered to individuals through centralized exchanges, but is one when sold directly to institutions.

The distinction in the ruling essentially threw a spanner in SEC’s plan to paint all altcoins with the same brush and subject them to stringent oversight by categorizing them as securities.

Bitcoin’s dominance rate fell 2.6% to 50.14% after the court ruling, the biggest one-day decline since June 13, 2022, according to data from charting platform TradingView. Altcoins like XRP, SOL, MATIC and ADA chalked out double-digit gains, outshining bitcoin by a big margin.

Some observers foresee potential for a continue outperformance of altcoins over the near term.

“Alt season may be upon us following the Ripple news as indicators collectively suggest risk appetite is funneling down the risk continuum,” Decentral Park Capital said in a market update published Thursday. “With the U.S. dollar breaking down and the inflation battle nearing the end, it appears to be game on for investors.”

In contrast, Noelle Acheson, author of the Crypto Is Macro Now newsletter, said the ruling could help Coinbase in its legal tussle with the SEC, but cautioned against predicting an outsized altcoin rally.

Early last month, the SEC charged cryptocurrency exchange Coinbase and its offshore rival Binance for offering unregistered securities, a move that injected uncertainty into the market.

“The ruling should be enough to reawaken greater interest in the shifting market narrative, which itself could be enough to bring in new flows,” Acheson told CoinDesk.

“However, it’s premature to assume that a ‘win’ is in the bag – the SEC will likely appeal the decision, and given some of the inconsistencies, it might win. At best, the uncertainty will drag on for longer. So, it feels too soon for alt season; that will probably wait until we get greater clarity on the Coinbase case,” Acheson said.

In a note to clients on Friday, analysts at K33 Research voiced a similar opinion, saying, “the ruling will be appealed and might even be reversed, so we expect the ongoing battle to continue.”

The court also found Ripple violated securities law when selling XRP directly to institutions. So institutions that bought XRP can come under the regulatory scanner, injecting further uncertainty into the market.

“It is important to note that institutional investors who purchased directly from Ripple may find themselves subject to class-action litigation as potential underwriters. This is an area to watch closely, especially if big-name venture capitalists were involved,” CoinShares’ head of product, Townsend Lansing, said. “The legal landscape continues to change, and we urge all parties to stay informed of these important developments.”