Signum Bank's Cryptocurrency Report predicts that profit rotation from Bitcoin to altcoins may stop in 2025. The current bullish cycle could favor meme coins over other sectors. Stablecoins may be on track for widespread mainstream adoption in 2025.
Signum's 2025 Crypto Market Outlook predicts the long-awaited Alternatives Season could disappoint investors as stablecoin adoption expands and memecoins lead market rally .
Altcoins could spook investors as stablecoins become more popular
Digital asset banking group Signum has released its 2025 market forecast, highlighting the latest trends in cryptocurrencies year-to-date and what investors can expect in the coming year.
The report suggested that the current crypto market rally is likely to continue into 2025, considering that some world-class investors and companies have not yet invested in cryptocurrencies. Analysts at Sygnum noted that the availability of Bitcoin ETFs and regulatory clarity around crypto assets could create room for these investors to include BTC in their portfolios.
However, despite their bullish outlook, they believe that next year will be a little more difficult as the traditional rotation of profits from Bitcoin to other assets, which is a hallmark of the alt season, may not occur in 2025. He suggested that altcoins could spook investors. This is mainly due to “new policies.” Funds flowing into Bitcoin ETFs instead of virtual currency exchanges.” This took place amidst great anticipation among members of the cryptocurrency community for the start of the alternative season.
“Bitcoin ETFs have provided market access to investors who are not ready to trade or settle direct investments in crypto assets. These holders sell their Bitcoin ETFs to buy altcoins. “This is not the case,” the report says.
Similarly, aside from Ethereum, regulatory issues surrounding altcoins can make investors skeptical about diverting funds to other cryptocurrencies.
Conversely, we expect to see even more adoption of stablecoins in the coming year as more companies consider adding them as a payment method.
Growth in the stablecoin sector in 2024 has been significant, with market capitalization increasing by over 50% since the beginning of the year. Signum suggests that broader regulation of these assets will be key to their adoption, particularly in emerging markets.
Additionally, the report notes that meme coins are the favorites to lead the altcoin rally in the new year, as altseason “could simply be memecoin season in the current cycle.”
Notably, seven of the top 10 best-performing crypto assets since the beginning of the year have been meme coins, indicating a significant diversion of funds into this asset class.
Best performing crypto assets | Signum
Analysts at Sygnum highlighted that besides Dogecoin (DOGE), which could increase in value if Elon Musk integrates it as a payment system, other meme tokens also reflect gambling among traders. .
Frequently asked questions about Bitcoin, altcoins, and stablecoins
Bitcoin is the largest cryptocurrency by market capitalization and is a virtual currency designed to function as money. This form of payment is not controlled by any particular person, group, or entity and eliminates the need for third parties to participate during financial transactions.
An altcoin is any cryptocurrency other than Bitcoin, but some consider Ethereum to be a non-altcoin because it is these two cryptocurrencies that forks occur. If this is true, Litecoin would be the first altcoin to fork from the Bitcoin protocol and thus be an “improved” version of it.
A stablecoin is a cryptocurrency that is designed to have a stable price, and its value is backed by the reserves of the asset it represents. To achieve this, the value of one stablecoin is pegged to a commodity or financial instrument, such as the US dollar (USD), and its supply is regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on/off ramp for investors who wish to trade and invest in cryptocurrencies. Also, since cryptocurrencies are generally volatile, stablecoins allow investors to store value.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the market capitalization of all cryptocurrencies combined. This clearly shows the interest in Bitcoin among investors. BTC's dominance typically occurs around bull markets, where investors turn to relatively stable, high-market-cap cryptocurrencies like Bitcoin. Decreasing BTC dominance usually means investors are moving their capital and profits to altcoins in search of higher returns, which usually causes an explosive rally in altcoins.
