Bitcoin Dominance Hits 4-Year High, Signaling Strengthened Institutional Fund Inflows

According to the investment outlook report for the second quarter of 2025 released by Swiss crypto asset bank Signum, Bitcoin's market dominance has reached its highest level in the past four years. This is a result of highlighting Bitcoin's (BTC) safe-haven characteristics due to increased macroeconomic uncertainty and concerns about currency value decline. The establishment of state-level Bitcoin reserves in the United States is somewhat delayed, but Treasury Secretary Becerra and BlackRock CEO Larry Fink both emphasized Bitcoin's value storage function. Particularly, Fink suggested that Bitcoin could become a global reserve currency replacing the dollar if the US fails to manage its national debt. Signum analyzed that the regulatory environment for crypto asset use cases has significantly improved, which has not yet been reflected in prices, laying the groundwork for a strong altcoin market rebound. Ethereum (ETH) is focusing on integrating liquidity across its ecosystem while facing challenges from competitors, with major Layer 2 solutions like Base and Optimism promising to support these efforts despite significant revenue reductions. Meanwhile, Solana's daily revenue has decreased by 99% compared to its January peak, revealing dependence on sectors lacking fundamental value after the meme coin boom. Asset management firm Bitwise described the first quarter as a "frustrating" period, noting significant positive developments despite crypto asset price declines. These included the inauguration of a pro-crypto president, strategic Bitcoin reserve establishment, SEC withdrawing most lawsuits against the crypto industry, and the conclusion of 'Operation Choke Point 2.0'. Despite these developments, Bitcoin dropped by 22.2% from its January all-time high, while Ethereum, the second-largest cryptocurrency, recorded a surprising 45% decline. Bitwise questioned whether fundamental improvements would drive crypto assets to new all-time highs or if all positive factors have already been priced in. However, despite price declines, some crypto asset market segments showed strong upward trends. Stablecoin managed assets increased by 13.50% quarter-on-quarter to over $218 billion, with trading volume increasing by 30.14%. Tokenized real-world assets surged by 37.07% in the first quarter, reaching a new all-time high. Regulated Bitcoin futures trading volume and open interest also hit record levels, suggesting increased institutional investor interest in crypto assets as macro trading assets. Combining the two reports, the second quarter of 2025 is expected to see improved regulatory environments, strengthened Bitcoin's reserve currency status, and new competitive and collaborative movements in the altcoin market, including Ethereum. Particularly, practical areas like real-world asset tokenization and stablecoins are expected to drive the market, potentially leading to a rebound from the first quarter's decline.