Sygnum Bank: New institutional investors likely to enter crypto

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As a seasoned crypto investor with a decade of experience under my belt, I find the Sygnum Bank report to be a beacon of hope and anticipation for the future of our digital asset ecosystem. Having weathered numerous market cycles and navigated through regulatory uncertainties, the prospects of a pro-crypto environment under President Trump’s administration is indeed music to my ears.

With the expectation of a favorable regulatory climate for cryptocurrencies under President-elect Donald Trump, Sygnum Bank, a Swiss digital asset banking organization, predicts that the ongoing bull market could persist until 2025.

As a researcher, I’ve been delving into the latest findings from the Sygnum Bank report, and it appears that many of the significant traditional financial players are yet to fully immerse themselves in the crypto ecosystem. The potential for substantial price growth lies in the participation of these institutional investors, as suggested by the report.

As a crypto investor, I’ve noticed an interesting trend in the market: U.S.-based Bitcoin (BTC) exchange-traded funds, which debuted in January, have surprisingly attracted a net investment of approximately $34.55 billion. This is despite a significant outflow of $20.8 billion from Grayscale’s GBTC fund. Remarkably, industry giant BlackRock has recorded an inflow of over $35 billion into its IBIT ETF alone. This shift in investment strategy suggests a growing institutional interest in Bitcoin, even amidst market fluctuations.

These products allow exposure to crypto investments in the largest economy in the world.

The significant surge in crypto prices is mainly fueled by the anticipation of cryptocurrency-friendly regulations, serving as a primary driver for this bull market. With Trump’s upcoming presidency, his inauguration being set for January 20, 2025, these pro-crypto policies could play a crucial role.

Sygnum stated that optimism about a significantly friendlier regulatory environment in the U.S. has been driving the recent surge, ever since Donald Trump’s presidential win.

By 2025, Sygnum anticipates that stablecoins will become widely accepted among the public. This optimism is backed by the current positive market trends, which have driven the overall value of stablecoins above $200 billion. USDT dominates this market with around $140 billion, as per CoinGecko’s latest data.

The report issued by the digital banking group emphasized that stablecoins have a restricted range of applications, as the majority of their transactional activity is associated with trading cryptocurrencies through online platforms.

Sygnum indicated that there could be changes coming up, possibly due to the approaching regulations and the integration of stablecoins in services such as Visa, PayPal, and MasterCard.

From a different perspective, the Swiss bank, based in Switzerland, holds the view that altcoins may not outshine Bitcoin as significantly as they have during previous market rallies. The bank’s reasoning, as outlined in their report by Sygnum, is primarily due to the approval of spot Bitcoin ETFs. In simpler terms, the bank thinks that the introduction and acceptance of exchange-traded funds that track Bitcoin could potentially overshadow the performance of other cryptocurrencies (altcoins).

Bitcoin ETFs offer a way for investors without the means to directly trade and settle cryptocurrency assets, an opportunity to participate in the market. These investors won’t be liquidating their Bitcoin ETFs to purchase alternative cryptocurrencies.

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2024-12-12 14:17