Originally published on: December 12, 2024
Sygnum Bank, a leading crypto-focused asset manager, has forecasted that Bitcoin’s price could experience a significant increase in 2025 due to what they refer to as “demand shocks” caused by surging institutional inflows.
According to Sygnum’s Crypto Market Outlook 2025 report released on December 12, institutional capital flows are already playing a crucial role in boosting Bitcoin’s spot price. The report suggests that for every $1 billion of net inflows into spot exchange-traded funds (ETFs), Bitcoin’s price could see a 3-6% upward movement.
The bank anticipates that this trend will only intensify in 2025 as more large institutional investors, such as sovereign wealth funds, endowments, and pension funds, start allocating funds to Bitcoin. With the increasing regulatory clarity in the US and the possibility of Bitcoin being recognized as a central bank reserve asset, institutional participation in crypto assets is expected to surge.
However, Sygnum notes that the growth of alternative cryptocurrencies will be dependent on the US government passing laws that support crypto adoption. The report emphasizes the importance of tailored regulations that allow token projects to operate without excessive compliance burdens.
Furthermore, Sygnum highlights the significance of proposed acts such as the Financial Innovation and Technology for the 21st Century Act (FIT21) and Payment Stablecoin Act in shaping the future of the crypto industry in the US. The bank recommends the introduction of laws covering areas like self-custody, crypto mining, and decentralized finance (DeFi) to ensure a conducive environment for crypto projects.
In the absence of favorable regulations for altcoins, Bitcoin is expected to maintain its dominance in the market. Sygnum predicts that the lack of user growth in decentralized applications may lead to speculative investments in meme coins, posing a risk of a potential bubble in the market.
As Bitcoin ETFs in the US surpassed $100 billion in net assets for the first time on November 21, the outlook remains positive for the cryptocurrency market. The interest in Bitcoin ETFs has been on the rise since the launch of spot BTC ETFs earlier this year, fueled by growing adoption and the superior investment product they offer.
With the support of the incoming crypto-friendly government in the US, the future looks promising for Bitcoin and the broader crypto market. Stay tuned for more updates and insights on market trends by subscribing to our newsletter and exploring articles like this one.
