Bitcoin May Face ‘Demand Shocks’ In 2025 Due To Growing Institutional Interest: Report
according to a Report Crypto asset manager Sygnum says a “demand shock” led by institutional investors could drive Bitcoin (BTC) prices higher new high By 2025. However, altcoins may underperform due to factors such as reduced capital rotation from BTC to other cryptocurrencies.
Bitcoin may continue its strong momentum into 2025
In a report titled “Cryptocurrency Market Outlook 2025,” asset management firm Sygnum outlined a variety of factors that could further push BTC prices higher next year. The report highlights that new capital inflows, especially institutional inflows, are the main driver of the cryptocurrency bull run in 2025.
Related reading
The analysis highlights the “multiplier effect” caused by institutional inflows coupled with Bitcoin’s limited liquidity supply. For example, every $1 billion in net inflows into spot BTC exchange-traded funds (ETFs) reportedly triggers a 3-6% price increase.
Additionally, the report notes that the concept of reflexivity amplifies Bitcoin’s price momentum—as the price rises, so does demand for Bitcoin, creating a feedback loop. Institutional inflows, multiplier effects, and Bitcoin’s reflexive nature are expected to make 2025 a pivotal year for cryptocurrencies.
The report also emphasized pro-encryption The U.S. regulatory environment changed after Donald Trump’s victory in the November presidential election was confirmed. The results are widely considered favorable When it comes to crypto legislation, there is an expectation for a comprehensive regulatory framework that will provide much-needed clarity to the industry.
The election results bode well for crypto legislation, with widespread expectations for a comprehensive regulatory framework that would include clarifying the status of crypto assets and defining the role of regulators. It is expected that the CFTC’s role in cryptocurrency regulation will be expanded, and the chances of various cryptocurrency bills being passed and written into law will also increase significantly.
Some of the major crypto bills that will receive attention include the Payment Stablecoins Act, the Bitcoin Act (forcing the U.S. government to establish a strategic Bitcoin reserve), the CBDC Anti-Surveillance Act, and several others supporting cryptocurrency self-custody. , cryptocurrency mining and decentralized finance.
2025: A watershed year for BTC
The report predicts that institutional giants such as BlackRock, Fidelity and Morgan Stanley will continue to increase their investments in cryptocurrencies. Notably, some portfolios now allow allocations of up to 25% to cryptocurrency investments, but typical allocations remain in the 1-3% range.
Related reading
Additionally, Bitcoin may benefit from central banks and local governments considering setting aside some funds for Bitcoin reserves. It is worth noting that countries like this El Salvador and Bhutan They are already actively mining and accumulating Bitcoin as part of a broader national economic strategy.
The report added that crypto ETF inflows in 2025 are likely to be “significantly higher” than net inflows to date. According to data, as of December 11, the total net assets of U.S. spot BTC ETFs were US$113.72 billion. data fromSoSoValue.
Despite its optimistic predictions, the report acknowledges that there are some potential risks that could curb Bitcoin’s bullish trajectory. These include inflationary pressures, geopolitical uncertainty, and Tether’s growing dominance of the stablecoin market. At press time, BTC was trading at $100,940, up 0.9% in the past 24 hours.
Featured image from Unsplash, chart from TradingView.com
