According to a report released by Sygnum Bank on December 12, the increasing institutional investment flow could cause a "demand shock" for Bit (BTC) in 2025 and potentially drive a surge in BTC price. Sygnum Bank is an asset manager focused on Cryptoassets.
The capital inflow from institutions has already created a "multiplier effect" on BTC prices, with every $1 billion of net capital inflow into exchange-traded funds (ETFs) generating a price increase of around 3% to 6%, according to Sygnum's 2025 Crypto Market Outlook report.
Sygnum predicts that this momentum will accelerate in 2025 as large institutional investors - including sovereign wealth funds, endowments, and pension funds - add Bit (BTC) to their investment portfolios.
"With improved regulatory clarity in the US and the potential for Bit (BTC) to be recognized as a central bank reserve asset, 2025 could mark a powerful acceleration in institutional participation in Cryptoassets," said Martin Burgherr, Sygnum's Head of Client Solutions.
"Our analysis shows that even modest allocations from this segment could fundamentally transform the Cryptoasset ecosystem."
Source: Sygnum Bank
Uncertain outlook for altcoins
This trend will only extend to alternative Cryptoassets if the US passes laws supporting Cryptoasset adoption, according to Sygnum. Altcoins can only thrive if US lawmakers create "fit-for-purpose" regulations for this asset class, allowing projects to transfer value to Token holders without triggering compliance burdens they cannot meet, the report states.
Sygnum highlighted the Financial Innovation and Technology for the 21st Century (FIT21) Act and the Stablecoin Payments Act as particularly important for Cryptoassets.
The US also needs legislation governing self-custody, Cryptoasset mining, and DeFi, the report said. Until then, "the extraordinary growth drivers of Bit (BTC)... will constrain the relative performance of altcoins," according to the report.
Not just Bit (BTC), "the poor user growth of most decentralized applications and use cases has led speculative investment towards meme-like Tokens, risking the creation of bubbles," the report added.
Source: Sygnum Bank
Strong demand for Bit (BTC) ETFs
On November 21, US Bit (BTC) ETFs surpassed $100 billion in net assets for the first time, according to data from Bloomberg Intelligence.
Bit (BTC) has dominated the ETF landscape since the launch of on-site Bit (BTC) ETFs in January. Investor interest accelerated after pro-Cryptoasset President-elect Donald Trump won the US election on November 5.
"The development of on-site Bit (BTC) ETFs stems from two key factors: widespread Bit (BTC) adoption and a superior product," Bryan Armour, director of passive research strategies at Morningstar, told TinTucBitcoin in November.
"ETFs allow new investors to buy Bit (BTC) for the first time, like those who can't set up a wallet and buy Bit (BTC) on a Cryptoasset exchange," Armour said. They "also benefit from cheaper trading, lower fees, and leading Bit (BTC) custody practices."
