Bitcoin price could surge in 2025 due to demand shocks

A recent report by Sygnum Bank indicates that Bitcoin (CRYPTO:BTC) may experience significant price increases in 2025 due to anticipated "demand shocks" driven by surging institutional inflows.

According to the report released on December 12, each $1 billion in net inflows into Bitcoin spot exchange-traded funds (ETFs) could lead to a price increase of approximately 3-6%. 

Sygnum expects this trend to accelerate as large institutional investors, including sovereign wealth funds and pension funds, begin allocating more capital to Bitcoin.

“With improving US regulatory clarity and the potential for Bitcoin to be recognised as a central bank reserve asset, 2025 could mark steep acceleration for institutional participation in crypto assets,” stated Martin Burgherr, Sygnum’s chief clients officer.

He emphasised that even modest allocations from institutional investors could significantly impact the cryptocurrency ecosystem.

However, the outlook for alternative cryptocurrencies remains uncertain. Sygnum noted that altcoins might struggle unless U.S. lawmakers establish regulations that support crypto adoption. 

The report highlighted the importance of proposed legislation like the Financial Innovation and Technology for the 21st Century Act and the Payment Stablecoin Act. 

These laws would need to facilitate projects passing value to token holders without imposing unmanageable compliance burdens.

Sygnum also pointed out that until such regulations are enacted, Bitcoin’s strong growth drivers will likely limit the performance of altcoins.

Additionally, the report mentioned that lackluster user growth in decentralised applications has led speculative investments towards memecoins, raising concerns about a potential bubble.

On a positive note, U.S. Bitcoin ETFs recently surpassed $100 billion in net assets, reflecting growing investor interest in regulated cryptocurrency products.

At the time of reporting, the Bitcoin price was $100,672.