JPMorgan analysts predict that Bitcoin’s dominance over Ethereum and other altcoins will continue into 2025. This prediction is based on several factors, including Bitcoin’s role in the “devaluation trade” narrative, institutional investor interest, and technological advancements.
Eight Factors Supporting Bitcoin’s Superiority:
1. Its Role in Devaluation Trading: Bitcoin, along with gold, is seen as a hedge against inflation. The strong demand for spot Bitcoin ETFs reflects this interest. On the other hand, spot Ethereum ETFs have seen less interest.
2. Institutional Investments: The fact that MicroStrategy is only halfway through its $42 billion Bitcoin purchase plan shows the confidence institutional investors have in Bitcoin.
3. Government and Central Bank Reserves: In the future, it is predicted that US states, governments and central banks will give priority to Bitcoin in their crypto reserves.
4. Technological Developments: Advances in Bitcoin’s Layer 2 technologies enable it to compete with platforms like Ethereum by enabling smart contract support.
5. Enterprise Blockchain Applications: Large institutions are turning to private or consortium blockchains instead of public blockchains, highlighting Bitcoin’s decentralized nature.
6. Infrastructure-Focused Projects: New projects are prioritizing infrastructure development over token-focused strategies. For example, Base, the Ethereum Layer 2 network supported by Coinbase, has gained significant market share without issuing any tokens.
7. Challenges of Decentralized Projects: Platforms like Friend.tech and Lens, despite gaining early popularity, have struggled to maintain user activity and token value.
8. Regulatory Uncertainties: The market is still in a consolidation phase due to regulatory uncertainties in the US, which increases sensitivity to movements, especially in the technology sector.
As a result, JPMorgan analysts predict that the above-mentioned factors will continue Bitcoin’s dominance in the cryptocurrency market in 2025.
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