JPMorgan recently reported that Bit will maintain its dominance in the cryptocurrency market until 2025, compared to Ethereum and other cryptocurrencies. Bit's attractiveness in the crypto market continues to grow, influenced by the "debasement trade", institutional support, and infrastructure development.
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ToggleBit's market cap dominance remains high
According to The Block, JPMorgan analysts predict that Bit's dominance over Ethereum and other Tokens is expected to continue until 2025.
Currently, Bit's market cap accounts for nearly 56.4% of the overall crypto market, steadily rising from 40.1% since January 2023, possibly due to the potential approval of crypto ETFs.
Analysts stated:
This trend is supported by multiple factors, including Bit's emerging role in the "debasement trade" and the continuous increase in institutional investors.
Eight factors consolidate Bit's position
Regarding its forecast, JPMorgan also identified eight key factors that could continue to drive Bit's dominance:
The "debasement trade" is prevalent
Given the increasing geopolitical uncertainty, persistent inflationary concerns, and fiscal deficits in major economies, Bit and gold seem to have gradually become important assets in investment portfolios:
Like gold, Bit has become a major asset to hedge against inflation, attracting a large influx of funds into Bit spot ETFs.
It was also added that "the inflow of funds into Ethereum spot ETFs is relatively limited, only $2.4 billion, indicating that the market demand for ETFs of other Tokens like Solana will be even lower."
MicroStrategy's large-scale purchase plan
Next, MicroStrategy's "21/21 Plan" launched in October 2024 has also become an important driver:
The company plans to raise $42 billion for a Bit purchase plan over the next three years, of which it has only completed half, still providing a stable market support for Bit.
(Michael Saylor: MicroStrategy's perpetual preferred stock will provide 1.5x Bit exposure and returns)
Government and central bank Bit reserves
Furthermore, the crypto reserves of various U.S. states, global governments, and their central banks are also attracting attention, with the general belief that they will focus on buying Bit, further consolidating its position.
The development prospects of the Bit network ecosystem
The progress of the Bit network allows it to support smart contract functionality, directly competing with mainstream platforms like Ethereum.
Institutions Tend to Use Private Chains
Many financial institutions tend to use private or consortium Blocks in the adoption of Blockchain technology for tokenized Bond trading or settlement, in pursuit of higher privacy and customizability, weakening the appeal of public Blocks like Ethereum.
Infrastructure Building Prioritized over Tokens
Analysts also mentioned that the market's focus is shifting from Token issuance and speculation to supporting more stable and practical infrastructure building:
For example, Coinbase's Base network has not issued Tokens, yet it has occupied a significant position in the market. In this model, the profits of successful projects usually flow to private enterprises rather than Token holders.
In other words, as investor demand for Tokens may decrease, the value may flow to assets like BTC that are "not dependent on Token profitability".
Decentralized Projects Perform Poorly
He also pointed out that many decentralized projects have declined rapidly after the hype, with user activity and Token value dropping significantly:
For example, the decentralized community platform Friend.tech, Farcaster and Lens have not been able to maintain stable user growth, indicating that these projects need more time to prove their benefits.
(Friend.tech Token Plummets Over 20%: Co-founder Hints Possible Departure from Base)
Regulatory Uncertainty Still Affects the Market
Finally, although the crypto market regulation is generally considered to be becoming clearer, it is still uncertain whether these changes will be good or bad, and whether they will be beneficial to the development of public Blocks like Ethereum.
Volatility May Intensify with Tech Stocks
The analyst also stated at the end of the article that the crypto market is currently in a consolidation stage, waiting for the regulatory policy of the new US government to be introduced. However, as the government may prioritize tariff and immigration issues, the implementation of crypto-related policies may take time:
The delay in regulation may lead to increased market volatility, especially when the tech stock sector is volatile, the crypto market is more susceptible to being affected.
However, this view differs somewhat from the thoughts of the bank's CEO, Jamie Dimon, who criticized BTC a few days ago in an interview, saying it lacks intrinsic value and is highly associated with money laundering and malware. However, his contradictory personality seems to be well-known.
(JPMorgan Chase CEO Jamie Dimon Stirs Controversy Again, Calling BTC a "Ponzi Scheme")
Risk Warning
Crypto asset investment is highly risky, and its price may fluctuate dramatically, and you may lose your entire principal. Please carefully evaluate the risks.
