Key Notes
- Altcoins may rebound in Q2 2025 due to improved crypto regulations, says Swiss bank Sygnum.
- New protocols like BeraChain and Aptos could drive market growth.
- Q1 2025 saw a sharp drop in market cap and DeFi TVL according to a CoinGecko report.
The altcoin market was volatile in the first quarter of 2025, swinging high during the inauguration of US President Donald Trump, and dipping by the end of the same quarter.
According to Swiss bank Sygnum, altcoins could experience a rebound in Q2 2025 because of the improvement of digital assets’ regulations.
The report states that significant improvements in the regulatory framework for crypto assets are setting the stage for a potential altcoin rally in Q2, as the market has yet to price in these positive developments.
In April, Bitcoin’s dominance continued to increase, clinching 59.1% in the market, which has not been seen for a few years.
A Rise in Economic Value
Sygnum reports that an increase in market competition should be expected, as the crypto enthusiasts are now interested in economic value. The anticipated rise in competition is expected to lead to greater customer satisfaction and more advanced options, driven by emerging protocols like BeraChain and Aptos.
The report noted that some recent protocols are offering more sustainable frameworks, with the likes of Sonic giving incentives to developers and BeraChain rewarding validators that offer liquidity to apps on the chain. Layer 2-network Base is not left out of the predictions, as the report stated that it currently leads in TVL, throughput, as well as transactional levels.
A Stark Contrast between Q1 and Proposed Q2 2025
If Sygnum’s predictions come true, it would mark a sharp reversal from the crypto market downturn seen at the end of Q1 2025. In Q1 2025, CoinGecko reported that the total crypto market cap fell by 18.6% and lost $633.5 billion in the process. During the same period, the DeFi Total Value Locked (TVL) nosedived to $128.6 billion from the Q4 2024 figure of $177.4 billion.
In the first quarter of 2025, altcoins like Solana and Base witnessed a drop in TVL of 23.5% and 15.3%. The drop in Solana’s value and daily returns may be linked to a short-lived explosion in meme coins. BeraChain, on the other hand, grew to the sixth position with $5.2 billion in DeFi TVL.
Although meme coins’ prices may have performed poorly at the end of Q1 2025, CoinGecko reports that they captured 27.1% of investors globally, which made them rank directly below artificial intelligence tokens with 35.7%.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
