Sygnum Bank states that institutional inflows will drive Bitcoin’s price to new highs in 2025, while altcoin growth depends heavily on supportive US regulatory changes.
A new report from Sygnum Bank forecasts a seismic shift in Bitcoin’s market dynamics by 2025, driven by surging institutional inflows. The bank outlines how growing participation from sovereign wealth funds, pension funds, and other large-scale institutional investors could create major “demand shocks”, potentially pushing Bitcoin prices to unprecedented levels.
The Thursday report reveals that every $1 billion in net inflows to spot Bitcoin exchange-traded funds (ETFs) has the power to drive Bitcoin price BTC $82 307 24h volatility: 3.1% Market cap: $1.63 T Vol. 24h: $48.48 B up by 3-6%. This multiplier effect, already visible in the market, is expected to further intensify as regulatory clarity in the United States improves and Bitcoin inches closer to recognition as a national reserve asset.
Altcoins Have to Wait
While Bitcoin’s dominance appears set to grow, Sygnum’s report warns that altcoins may struggle to gain similar traction unless the US government enacts regulations tailored to their unique attributes. The report highlights the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Payment Stablecoin Act as crucial to the broader adoption of alternative cryptocurrencies.
Sygnum argues that this situation underscores the need for clear rules on self-custody, crypto mining, and decentralized finance (DeFi) operations.
Despite these challenges, some analysts remain optimistic about altcoins. Market watchers predict that the altcoin market cap could reach new highs by 2025, fueled by emerging sectors like artificial intelligence. However, Bitcoin’s continued dominance, currently hovering around 56%, has delayed major altcoin rallies.
Bitcoin Price Ahead
Bitcoin has maintained its dominance since spot ETFs debuted earlier this year. According to data by SoSoValue, US-based Bitcoin ETFs now manage over $113 billion in net assets, reflecting institutional confidence in the asset.
Investor enthusiasm surged further after crypto-friendly President-elect Donald Trump’s victory early in November. The report stated:
“Numerous crypto advocates nominated to cabinet positions, personnel changes at the SEC, the likely extended role of the CFTC in regulatory oversight and a new White House post dedicated to crypto policy suggest a highly favourable environment ahead for innovation and growth.”
As of writing, Bitcoin trades just below $101,000, recovering 3% in the last 24 hours despite a sluggish start to the week. It boasts a market cap of $1.99 trillion, according to data by CoinMarketCap.
Currently, the Crypto Fear and Greed Index sits at 83, indicating extreme greed and heightened demand among investors. Such elevated levels were last observed earlier in March when Bitcoin reached its prior all-time high of $73,000.
The prospect of “demand shocks” driven by growing institutional involvement offers a promising outlook for Bitcoin. However, the trajectory for altcoins remains uncertain.
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