Sygnum forecasts a potential altcoin rally in Q2 2025 due to improved digital asset regulations. The rise in Bitcoin dominance suggests a shift towards safer investments, while regulatory advancements may facilitate broader cryptocurrency adoption. Increased competition in the market is leading to enhanced products, with notable protocols implementing diverse strategies to attract users. Despite increases in memecoin interest, institutions focus on Bitcoin investments, growing public firm holdings significantly.
According to Swiss bank Sygnum, altcoins are poised for a potential rebound in Q2 2025, driven by significantly improved regulations governing digital assets. Their Q2 investment outlook posits that enhanced governance structures are laying the groundwork for a strong resurgence in the altcoin sector, noting that the positive regulatory changes have yet to be reflected in market prices.
In April 2025, Bitcoin dominance reached its highest level in four years, indicating that investors may be reallocating funds into what they perceive to be safer assets. However, Sygnum suggests that regulatory measures, including President Donald Trump’s plans for a Digital Asset Stockpile and advancements in stablecoin regulations, could enhance the broader adoption of cryptocurrency.
Sygnum anticipates that protocols successfully attracting users will outperform, with Bitcoin’s market dominance likely to decrease. The research highlights growing competition in the cryptocurrency market as its focus shifts towards economic value, driving innovation and improvements in product offerings.
Notable protocols like Toncoin, Sui, Aptos, Sonic, and Berachain are implementing diverse strategies to fuel user growth and revenue. However, the report cautions that while these high-performance blockchains are addressing the limitations of existing platforms like Bitcoin, Ethereum, and Solana, achieving significant user adoption and generating meaningful fee income remains a challenge.
Sygnum identifies some sustainable practices, such as Berachain’s model of incentivising liquidity provision for DeFi applications and Sonic’s approach to rewarding user engagement through developer incentives. Moreover, Toncoin benefits from its integration with the Telegram platform, potentially reaching a vast user base.
The report also highlights the promise of layer-2 networks, particularly Base, noting its metrics for daily transactions, throughput, and total value locked. Despite the fluctuations caused by the memecoin phenomenon, Base has proven resilient, securing its position as a leading layer-2 solution.
Memecoins maintained a significant presence in Q1 2025, accounting for 27.1% of global investor interest, according to a CoinGecko report, trailing behind artificial intelligence tokens at 35.7%. While retail investors engage vigorously with memecoins, institutional players are focused on acquiring Bitcoin, with at least 12 public companies purchasing it for the first time in Q1, thereby increasing overall public holdings to $57 billion.
