Thai digital asset management firm Merkle Capital has expressed optimism about the future of cryptocurrencies, forecasting broader adoption in 2025. Bitcoin, in particular, remains at the forefront of the firm’s expectations due to its increasing appeal among institutional investors.
In a research note, Merkle highlighted Bitcoin’s impressive performance in 2024, during which the cryptocurrency surged by 160%, climbing from $40,000 to $107,000. The rally was attributed to a series of critical developments, including the approval of spot Bitcoin exchange-traded funds (ETFs) in January and Bitcoin’s halving event, which reduced its supply. Additionally, spot Ethereum ETFs made their debut, further expanding investment opportunities within the digital asset ecosystem.
“The approval of spot ETFs not only strengthened Bitcoin’s fundamentals but also reshaped the broader digital asset landscape, setting the stage for continued growth into 2025,” the research stated.
Other pivotal factors included the first US interest rate cut in four years and Donald Trump’s victory in the November presidential election. His pro-crypto policies, combined with these developments, provided a substantial boost to cryptocurrency investments, Merkle noted.
The firm’s analysis of the market value-to-realized value (MVRV) ratio suggests the average cost for Bitcoin holders is $39,000. Historically, Bitcoin has reached peaks of approximately 3.7 times its MVRV, pointing to a potential price high of $145,000. However, the influx of institutional players via ETFs could introduce variations to these valuation metrics.
Ethereum also benefited significantly from the approval of spot ETFs last year, attracting institutional interest. With advancements to its ecosystem, Merkle described Ethereum as a “high-potential asset” for the coming year.
The research further predicted a promising outlook for alternative coins (altcoins). As Bitcoin’s dominance, currently at 57.7%, declines—typically following a peak in Bitcoin’s price—investors are expected to diversify their portfolios by moving into altcoins. Historical patterns suggest Bitcoin’s dominance could drop to 40%, potentially driving a 50% increase in altcoin market value.
“Altcoins are expected to gain traction as investors diversify their portfolios,” the research noted. “This shift, combined with continued regulatory clarity, innovation, and institutional inflows, could lead to significant market expansion.”
However, Merkle cautioned that while the long-term outlook for cryptocurrencies remains robust, investors should carefully assess risks and conduct thorough research before making decisions.
With a strong foundation laid in 2024, Merkle believes the cryptocurrency market is poised for another year of significant growth, with Bitcoin, Ethereum, and altcoins all expected to play crucial roles.
