Growing Institutional Interest May Cause Bitcoin ‘Demand Shocks’ In 2025
Crypto asset management company Sygnum predicts institutional investor-led ‘demand shocks’ might boost Bitcoin (BTC) prices in 2025. Alternatives may underperform owing to limited capital rotation from BTC to other cryptocurrencies.
Bitcoin Should Maintain Momentum Through 2025
In Crypto Market Outlook 2025, asset management Sygnum listed many variables that might boost BTC prices next year. The crypto bull market in 2025 will be driven by institutional capital inflows, according to the analysis.
The data shows a ‘multiplier effect’ from institutional inflows and Bitcoin's limited liquid supply. Each $1 billion of net inflows into spot BTC ETFs apparently raises prices by 3-6%.
According to the analysis, reflexivity boosts Bitcoin's price momentum by increasing demand. Institutional inflows, the multiplier effect, and Bitcoin's reflexivity will make 2025 crucial for the cryptocurrency.
After Donald Trump's November election triumph, the research stresses the need for pro-crypto regulation in the US.
After the election, many anticipate a thorough regulatory framework that clarifies crypto asset classification and defines regulatory organizations' tasks. The CFTC's involvement in crypto supervision is projected to expand, and crypto laws are more likely to pass and become law.
The Payment Stablecoin Act, Bitcoin Act, CBDC Anti-Surveillance Act, and other crypto self-custody, mining, and decentralized finance bills will be debated.
The research expects BlackRock, Fidelity, and Morgan Stanley to increase their crypto holdings. Some portfolios enable 25% crypto investments, while most use 1-3%.
BTC may also benefit from central banks and local governments putting aside cash for BTC reserves. El Salvador and Bhutan are mining and hoarding BTC as part of their economic plan.
The research expects 2025 crypto ETF inflows to be ‘substantially higher’ than net inflows. SoSoValue reports $113.72 billion in US spot BTC ETF net assets as of December 11.
