Bitcoin Price Could Surge by 3-6% with $1 Billion Inflows
A new report from Sygnum Bank predicts significant changes in Bitcoin’s market dynamics by 2025, influenced by increasing institutional investments. The report indicates that participation from sovereign wealth funds, pension funds, and other large investors may lead to major "demand shocks," potentially elevating Bitcoin prices to new heights.
The report states that every $1 billion in net inflows to spot Bitcoin exchange-traded funds (ETFs) can increase Bitcoin price #BTC by 3-6%. This effect is already evident in the market and is expected to strengthen as regulatory clarity in the United States improves and Bitcoin approaches recognition as a national reserve asset.
Altcoins Have to Wait
While Bitcoin's dominance is likely to increase, the report suggests that altcoins may face challenges gaining traction without specific regulations from the US government. Key legislative proposals include the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Payment Stablecoin Act, which are essential for broader acceptance of alternative cryptocurrencies.
Sygnum emphasizes the necessity for clear regulations regarding self-custody, crypto mining, and decentralized finance (DeFi) operations.
Despite these hurdles, some analysts express optimism about altcoins, predicting that their market cap could reach new highs by 2025, propelled by emerging sectors like artificial intelligence. However, Bitcoin’s current dominance, approximately 56%, has hindered substantial rallies in altcoins.
Bitcoin Price Ahead
Since the launch of spot ETFs, Bitcoin has retained its market dominance. Data from SoSoValue shows that US-based Bitcoin ETFs manage over $113 billion in net assets, reflecting growing institutional confidence.
Investor enthusiasm rose following the election of crypto-friendly President-elect Donald Trump in early November. The report notes:
“Numerous crypto advocates nominated to cabinet positions, personnel changes at the SEC, the likely extended role of the CFTC in regulatory oversight and a new White House post dedicated to crypto policy suggest a highly favorable environment ahead for innovation and growth.”
As of now, Bitcoin trades just below $101,000, recovering 3% in the last 24 hours despite a slow start to the week. Its market capitalization stands at $1.99 trillion, according to CoinMarketCap data.
The Crypto Fear and Greed Index currently reads 83, indicating extreme greed and increased demand among investors. Such levels were last seen earlier in March when Bitcoin reached its previous all-time high of $73,000.
The potential for "demand shocks" due to rising institutional involvement presents a positive outlook for Bitcoin, while the future for altcoins remains uncertain.