Swiss banking giant Sygnum has hinted at a potential altcoin rally in the second quarter of 2025, attributing it to progressive regulations in the digital asset space. In its Q2 2025 investment outlook, Sygnum stated that significantly improved regulations have laid the groundwork for a strong altcoin rally, none of which is currently priced in.
April observed Bitcoin dominance hitting a four-year peak, indicating investors are shifting their investments into what they perceive as a safer asset. However, Sygnum postulates that regulatory advancements in the US, like the inception of a Digital Asset Stockpile by President Trump and evolving stablecoin regulations, might fuel wider crypto adoption.
Sygnum noted, “Protocols that succeed in amassing user traction are forecasted to outperform, leading to a dip in Bitcoin’s dominance.”
The bank also foresees increased competition as the market shifts its attention to economic value, propelling protocols such as Toncoin, Sui, Aptos, Sonic, and Berachain to adopt diverse strategies. Despite the high-performance blockchains addressing the limitations of Bitcoin, Ethereum, and Solana, the report points out the difficulty these chains face in attaining substantial adoption and generating fee income.
The report spotlighted some sustainable approaches like offering incentives to validators to supply liquidity to DeFi applications by Berachain, rewarding developers who attract and retain users by Sonic, and leveraging Toncoin’s affiliation with Telegram to reach a billion users.
Alongside layer-1 chains, Sygnum emphasized the potential of layer-2 networks like Base, which despite a sharp decline following a memecoin frenzy, continues to lead in metrics like daily transactions, throughput, and total value locked.
According to a CoinGecko report, despite recent price drops, memecoins held significant investor interest in the first quarter of 2025, second only to AI tokens. Meanwhile, Bitwise reported that publicly traded companies continued to invest in Bitcoin, pushing public firm holdings up to $57 billion.
