JPMorgan: Bitcoin Will Continue to Overwhelm Altcoins by 2025

According to the analysts at JPMorgan, Bitcoin's dominance - the overall market capitalization that Bitcoin holds compared to other cryptocurrencies - is expected to continue in 2025. "We forecast that Bitcoin will continue to outperform Ethereum and other altcoins this year for a number of reasons," the JPMorgan analysts led by Chief Executive Nikolaos Panigirtzoglou wrote in a report on Wednesday. Bitcoin's dominance rate is currently at 56.1% as the world's largest cryptocurrency trades near $102,281. The JPMorgan analysts have identified eight key factors that could drive Bitcoin's continued dominance. First, the Bitcoin narrative is seen as an important part of the "debasement trade" strategy in the form of a digital asset, continuing to attract a large inflow of funds from both individual and institutional investors through immediate Bitcoin ETFs. In contrast, immediate Ethereum ETFs have not generated similar appeal, recording only $2.4 billion in inflows to date. This reflects limited interest in altcoin ETFs in the future, such as Solana. Second, according to the analysts, MicroStrategy has only executed half of its $42 billion Bitcoin purchase plan, which will continue to drive BTC prices. Third, the analysts believe that many U.S. states, governments, or central banks accumulating cryptocurrency reserves in the future are likely to focus only on Bitcoin, further strengthening its position. Fourth, advancements in Bitcoin's Layer 2 networks enable support for smart contracts, challenging platforms like Ethereum. Fifth, enterprise blockchain applications, such as digital bond trading and transaction processing, are tending to shift towards using private or consortium blockchains. These systems provide more privacy and customization, reducing the appeal of public blockchains like Ethereum for large organizations. Sixth, emerging projects are prioritizing infrastructure development over token issuance, marking a shift from the token-centric strategies seen in the 2021-2022 bull market. For example, Base - a Layer 2 network on Ethereum incubated by Coinbase - has gained significant attention and market share without issuing a token. Seventh, many decentralized projects have achieved initial success but quickly declined in user activity and token value as the hype subsides. Decentralized social media platforms like Friend.tech, Farcaster, and Lens have struggled to maintain adoption, emphasizing the need for more time to prove sustainable utility. Finally, while clearer and more crypto-friendly regulations in the U.S. could improve market sentiment and increase the appeal of tokens beyond Bitcoin, it is uncertain whether these changes will integrate cryptocurrencies into traditional finance or drive public blockchains like Ethereum. They further stated that the crypto market is currently in a consolidation phase while awaiting clarity on regulations from the new U.S. administration. However, these policies may take time to be implemented, as the initial focus of the administration is likely to be on issues such as tariffs and immigration. The delay in regulation could prolong the consolidation phase, making the market more sensitive to volatility in the technology sector of the stock market.