4 Reasons Bitcoin Will Overtake Altcoins in 2025: JPMorgan

• There has been talk that 2025 will be the year of altcoins, but JPMorgan is not convinced.
• The token has dominated the cryptocurrency fund space and is developing competitive use cases.
• Bitcoin is also a clear beneficiary of government cryptocurrency plans, JPMorgan says.

Upside is high in the cryptocurrency market and investors see the tailwinds developing into a broader space beyond just Bitcoin.

However, while some have called for 2025 to be the year Alternative currency yearJP Morgan believes Bitcoin It is set to be the main attraction, as the token is expected to continue to rise after a 120% surge last year.

Market professionals have pointed out Cyclic trends This could boost altcoins like Solana or XRP, both of which rose sharply after Donald Trump won the election on hopes of more support from the incoming administration.

However, JP Morgan gave four reasons why investors should not necessarily flock to altcoins.

Firstly, Future policy remains speculativewith the timing and impact of the new regulation still in question.

While looser regulatory oversight would boost sentiment across the industry, there is no guarantee that the appeal of DeFi is about to skyrocket.

“It remains unclear to what extent these new regulations will allow the cryptocurrency ecosystem to encroach on the traditional financial system and whether public blockchains such as the Ethereum blockchain and others will play a more significant role in the future,” JPMorgan said.

At the same time, there are ambitious plans to develop cryptocurrency reserves in the United States And beyond JPMorgan said it is likely to focus entirely on Bitcoin. Some American states They actually pay the bills to start storing the token as an inflation hedge, which is an idea Washington can embrace him in Trump’s second term.

Secondly, Bitcoin has proven Dominance in the field of cryptocurrency funds.

JPMorgan expects retail and institutional investors to maintain inflows into spot bitcoin ETFs, helped by describing the token as digital gold. In December, Bernstein predicted as much Bitcoin will replace gold As the main assets storing value in the global economy over the next decade.

According to JPMorgan, Bitcoin accounted for 35% of the total inflows of $78 billion entering the cryptocurrency market in 2024.

This compares to relatively weak inflows into Ethereum ETFs, which have subsequently accumulated around $2.4 billion. Launching in JulyJPMorgan said. The bank suggested that future altcoin ETFs like Solana would also likely attract limited inflows.

third, The Bitcoin network has become a competitor To tokens with more specific use cases, such as Ethereum.

For most of its existence, Bitcoin was viewed solely as a buy-and-hold asset, offering little utility. But programmers have worked to expand its functionality, and new smart contract capabilities will help Catching up with competitors.

Meanwhile, JPMorgan said public blockchains – such as Ethereum – may be bypassed by large institutions in favor of private institutions, which are developing customizable solutions for institutional investors.

Fourth, Upcoming altcoin projects will need time to develop.

New decentralized initiatives typically see early success amid new hype, before user activity fades – eroding the value of the token. To achieve longevity, projects need to demonstrate the long-term benefits of the application, the bank said.

In the face of this, investors should not wait for a repeat of the 2021 cryptocurrency bull run. That year, projects achieved success by distributing tokens, but the industry is now focusing more on developing blockchain capabilities.

“In this model, profits from successful projects often benefit private companies, transferring value from cryptocurrency tokens,” JP Morgan explained.

JPMorgan also notes that MicroStrategy is only halfway through its plan to monetize $42 billion in Bitcoin. At the software company She made a name for herself By accumulating Bitcoin treasure using equity and loan financing. Its massive purchases have become a tailwind for the currency, as the company was responsible for 28% of cryptocurrency inflows last year.