- Swiss bank Sygnum predicts altcoins will rally in Q2 2025 due to improved cryptocurrency regulations.
- Market competition is intensifying with rising protocols like Toncoin, Sui, and Aptos taking different approaches to gain user adoption.
- Despite Bitcoin‘s recent dominance, regulatory developments in the US may boost broader cryptocurrency adoption beyond Bitcoin.
Sygnum Bank forecasts a potential altcoin market revival in the second quarter of 2025, citing significant improvements in digital asset regulations. In their recently published Q2 2025 investment outlook, the Swiss bank notes that while Bitcoin dominance reached a four-year high in April, the positive regulatory developments haven’t yet been reflected in altcoin prices.
The report said regulatory frameworks for cryptocurrency use cases have "drastically improved," creating favorable conditions for alternative cryptocurrencies. This comes as Bitcoin dominance reached unprecedented levels, suggesting investors have been moving funds into Bitcoin as a perceived safer asset during uncertain times.
US regulatory advances, including President Trump’s establishment of a Digital Asset Stockpile and progress on stablecoin regulations, could accelerate wider cryptocurrency adoption beyond Bitcoin. "We expect protocols successful in gaining user traction to outperform and Bitcoin’s dominance to decline," the bank stated in its report.
Competition Heats Up Among Blockchain Protocols
Sygnum highlights increased market competition as investors focus more on economic value. "The market’s increased focus on economic value compels greater competition for user growth and revenues, with rising protocols such as Toncoin, Sui, Aptos, Sonic, or Berachain taking different approaches," the report noted.
The bank observed that several approaches have proven more sustainable in attracting users. These include Berachain’s strategy of incentivizing validators to provide liquidity to DeFi applications, Sonic’s developer rewards for attracting users, and Toncoin leveraging its Telegram connection to access a billion potential users.
Layer-2 networks like Base also show promise despite experiencing volatility. After seeing record user growth during the memecoin boom, Base maintained its position as the leading layer-2 solution in metrics like daily transactions and total value locked, even after memecoin excitement cooled.
Memecoins Remain Popular Despite Market Shifts
Despite recent price declines, memecoins continued to dominate cryptocurrency narratives in early 2025. According to CoinGecko, memecoins captured 27.1% of global investor interest in Q1, second only to Artificial Intelligence tokens at 35.7%.
While retail investors focus on memecoins, institutional approaches differ significantly. Asset manager Bitwise reported that publicly traded companies are accumulating Bitcoin, with at least 12 public firms purchasing Bitcoin for the first time in Q1 2025, bringing total public company Bitcoin holdings to $57 billion.
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