Reasons why 2025 could be the best year for crypto
- Manuel Baur
- Jan 9
- 2 min read
In 2024, Bitcoin rallied and was one of the best performing assets of the year. This was due to three positive factors: optimism about regulation, an improved macroeconomic environment and growing investor enthusiasm.
Trump's announcement that he would pursue a crypto-friendly policy and make America the ‘crypto capital of the planet’ fuelled investor sentiment.
The Trump administration's policies could also provide cryptocurrencies with regulatory tailwinds in 2025. As early as December, the US president reiterated his plan to include Bitcoin as part of the US strategic reserves.
In addition, numerous crypto analysts believe that 2025 will see the crypto market experience its best year ever, in which not only Bitcoin, Ethereum or Ripple will reach new record highs, but other potentially ‘remarkable positive developments’ are also to be expected.
The optimistic price forecasts reflect ‘an unprecedentedly positive regulatory environment for cryptocurrencies, a favourable macroeconomic climate characterised by falling interest rates and improved liquidity, and the historically strong performance following the Bitcoin halving’.
Altcoin season
Analysts predict that Ethereum will do particularly well in 2025, significantly outperforming Bitcoin. This will usher in a broader season of alternative cryptocurrencies (altcoins) in 2025, while Bitcoin's dominance will decline.
These predictions are based in part on the argument that Donald Trump's victory in the US presidential election is better for altcoins than for Bitcoin. Trump's presidency is particularly favourable for on-chain activities, from which altcoins such as Ethereum and Solana will benefit significantly.
What does it mean when Bitcoin's dominance falls?
When Bitcoin's dominance falls, it means that Bitcoin's relative share of the total cryptocurrency market is declining. At the same time, the relative share of other cryptocurrencies, known as altcoins, is increasing.
Why then does the altcoin season start?
Capital flow: When investors start to withdraw some of their capital from Bitcoin and invest it in other cryptocurrencies, this leads to an increase in the prices of these altcoins. This phase is also known as ‘altcoin season’.
Risk appetite: A decline in Bitcoin's dominance can also be a sign that investors are becoming more willing to take risks and are willing to invest in less established projects.
Market cycles: Historically, such phases have been repeated. When Bitcoin experiences a strong upturn and its dominance reaches its peak, this is often followed by a phase in which altcoins were the focus of attention.
Important points to note:
No guarantee: Although there is a historical correlation between a decline in Bitcoin dominance and an altcoin season, this is no guarantee of future developments.
Projects: Not all altcoins benefit equally from an altcoin season. The success of an individual altcoin depends on a variety of factors, such as the underlying technology, the team behind the project and market conditions.
Risks: Investing in cryptocurrencies is risky. The value of cryptocurrencies can fluctuate significantly and there is a risk of loss of the invested capital.
Conclusion: A decline in Bitcoin dominance is often an indicator that investors are shifting their interest to altcoins. This can lead to a period of increased activity and price increases in altcoins.
However, it is important to be aware that this is not a risk-free investment strategy and you should have some basic knowledge of this market.
Are you curious and want to learn more about the crypto world?
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