Bitcoin (BTC) Is No Longer Considered a Niche Investment, Increased Adoption Is Forcing Hesitant Investors to Reconsider the Asset Class, WisdomTree Says

The institutionalization of crypto markets means that bitcoin (BTC) is no longer considered a niche investment, and increased adoption is forcing hesitant investors

Crypto markets are set to become more institutionalized in 2025, leading to increased adoption and a shift in perspectives among hesitant investors, according to a report by WisdomTree.

The report, which examines key crypto trends for 2025, highlights the growing importance of integrating digital assets into multi-asset portfolios.

"Portfolios with bitcoin allocations are consistently outperforming those that don't hold the world's largest cryptocurrency," the report states.

According to WisdomTree, asset managers who fail to allocate a portion of their clients' portfolios to bitcoin risk falling behind in a rapidly evolving financial landscape.

The report also anticipates a rise in bitcoin adoption this year, driven by demand from clients seeking exposure to the asset class.

"We expect this trend to continue in 2025 as more clients demand exposure to bitcoin and other cryptocurrencies," the report adds.

The launch of spot exchange-traded funds (ETFs) in the U.S. played a significant role in bringing crypto to the mainstream in 2024.

This momentum is expected to continue in 2025, especially with the U.S. regulatory environment becoming more favorable under President Trump.

"This next wave of altcoin ETPs will expand the diversity of crypto investment opportunities and further integrate cryptocurrencies into the global financial system," Silenskyte wrote.

Highlighting the Ethereum blockchain's role as the "backbone of decentralized finance (DeFi), non-fungible tokens (NFTs) and Web3," the report notes that its scalability issues remain a challenge.

However, recent upgrades, such as Dencun, are expected to drive layer-2 adoption on the blockchain, the report adds.

The report also discusses the growing significance of stablecoins, stating that they are "becoming indispensable to the global financial system."

According to WisdomTree, networks like Solana are ideal for stablecoin payments and remittances.

"Solana's high throughput and low transaction fees make it an attractive option for stablecoin issuers looking to offer fast and affordable payments," the report states.

Furthermore, the report anticipates a substantial expansion in the tokenization of real-world assets in 2025.

This process, which involves placing the ownership of assets on the blockchain, is expected to transform industries ranging from private equity to venture capital, according to the report.

"We expect to see a wave of innovation in 2025 as new use cases for crypto and blockchain technology emerge and gain traction," the report concludes.