Until the US government enacts regulations that encourage the widespread use of cryptocurrencies, the asset manager warned, altcoins might continue to struggle. On December 12th, the crypto-focused asset manager Sygnum Bank released a report. The paper speculates that Bitcoin (BTC) would see “demand shocks” in 2025 due to increasing institutional investment, which might lead to a dramatic increase in BTC’s price.
In their Crypto Market Outlook 2025 research, Signum stated that institutional capital flows are already having a “multiplier effect” on the spot price of Bitcoin Set Growth, with a 3-6% price pump generated for every $1 billion in net inflows into spot exchange-traded funds (ETFs).
Signum predicts a Bitcoin surge in 2025
When big institutional investors like pension funds, sovereign wealth funds, and endowments start allocating to Bitcoin in 2025, Sygnum predicts this trend will pick up speed. Sygnum’s chief client officer, Martin Burgherr, said, “2025 could mark steep acceleration for institutional participation in Crypto assets.”
He mentioned the potential recognition of Bitcoin Set Growth as a reserve asset for central banks and the enhancement of US regulations. If the US government introduces legislation encouraging the use of cryptocurrencies, Signum predicts that this trend will spread to other cryptocurrencies.
The paper stated that for altcoins to prosper, US lawmakers must establish regulations that are “tailored to the asset class,” enabling projects to distribute value to token holders without being stuck in a compliance quagmire.
Crypto regulations are key to Bitcoin’s growth
According to Sygnum, the Payment Stablecoin Act and the Financial Innovation and Technology for the 21st Century Act (FIT21) are particularly noteworthy for crypto. The paper suggests that US law should regulate decentralized finance (DeFi), crypto mining, and self-custody. Until then, cryptocurrencies will not be able to compete with Bitcoin due to its “extremely strong growth drivers.”
The paper went on to say that “speculative investment towards meme coins, risking a bubble” was due to “lacklustre user growth for the majority of decentralized applications and use cases” in addition to Bitcoin. Bloomberg Intelligence reports that US Bitcoin ETFs hit a new milestone on November 21st, surpassing $100 billion in net assets.
When spot BTC ETFs first debuted in January, Bitcoin quickly became the market leader in exchange-traded funds. Following the victory of crypto-friendly US President-elect Donald Trump on November 5th, investor enthusiasm skyrocketed.
Spot Bitcoin ETFs Drive Adoption
In November, Bryan Armour, director of passive strategies research at Morningstar, told Coin Telegraph that “broad Bitcoin Set Growth adoption and a superior product” were the two key factors that led to the emergence of spot Bitcoin ETFs.
For example, Armour explained that “the ETFs allowed new investors to buy Bitcoin for the first time,” meaning that they could purchase it without the hassle of creating a Bitcoin wallet and buying it on an exchange. They “also gain from reduced trading costs, minimal fees, and industry-leading Bitcoin storage solutions.”
FAQs
How will US regulations impact Bitcoin's growth?
Signum believes that favourable US regulations could accelerate institutional investment in Bitcoin, enhancing its growth and adoption.
What factors contribute to Bitcoin's price increase?
Sygnum suggests that every $1 billion in institutional inflows into Bitcoin ETFs results in a 3-6% price increase.
Why are altcoins struggling?
Altcoins may continue to face challenges until US regulations are tailored to their specific needs, preventing compliance issues.
What role do Spot Bitcoin ETFs play?
Spot Bitcoin ETFs are making Bitcoin more accessible to new investors, with benefits like reduced trading costs and secure storage.
