A long-anticipated shift into altcoins may finally be unfolding, driven by improved regulatory clarity, rising liquidity, and increased on-chain activity, according to Sygnum’s Q3 2025 Investment Outlook.
Earlier this year, geopolitical tensions and fiscal uncertainty in the U.S. triggered a broad sell-off across the altcoin market. However, evolving market conditions “may ignite the long-awaited altseason,” the digital asset bank noted in a report.
“With regulatory clarity now extending to altcoins, capital may flow into projects offering real-world utility and sustainable token models—a shift that could already be underway in certain sectors,” Sygnum wrote.
The report also highlighted a drop in Bitcoin dominance, which had reached its highest level since 2021 due to macroeconomic and trade-related pressures, but has recently declined by more than 6% as capital rotates back into altcoins.
Bitcoin Surges to New Highs Amid Supply Crunch
The report highlights that liquidity trends for Bitcoin remain “extremely bullish,” with a sustained imbalance between supply and demand pushing the leading cryptocurrency to fresh all-time highs. On July 14, BTC reached a new peak above $123,000.
“Bitcoin Spot ETFs have surpassed USD 160 billion in assets under management, having accumulated over 110,000 BTC in the last quarter alone,” Sygnum noted. Ether has also shown strength, marked by declining exchange balances, steady ETF inflows, and nearly 30% of its liquid supply now staked.
Ethereum’s outlook has strengthened following the successful Pectra upgrade, which “raised the staking cap and introduced several protocol improvements,” shifting the broader narrative around the network. This momentum has been further reinforced by regulatory clarity, with the U.S. Securities and Exchange Commission confirming that protocol staking “does not fall under securities law.”
According to Sygnum, Ether has “conclusively broken its long-term downtrend,” driven by rising institutional interest. Sharplink is preparing a $1 billion ETH allocation, while major Wall Street players—including BNY Mellon, Société Générale, and a Trump-backed USD1 stablecoin—are rolling out new tokenization and stablecoin initiatives on the Ethereum network.
DEX Market Share Climbs to 30%
Decentralized exchanges (DEXs) reached a new milestone last quarter, capturing 30% of all crypto spot trading volume. This record high was fueled by a wave of memecoin launches, pushing total DEX volumes to $530 billion. The surge was led by PancakeSwap on BNB Chain, while Solana’s PumpSwap rapidly overtook Raydium, according to Sygnum’s report.
DeFi lending also saw significant growth, with total value locked hitting an all-time high of $70 billion. Liquid staking crossed a major threshold as well, with over 30% of Ether’s supply now staked. “The DeFi lending sector is among the biggest winners during market rallies, with active loans on Ethereum reaching new highs as investors pursue greater risk and leverage,” Sygnum noted.
Still, the bank cautioned that the current momentum in altcoins could trigger another memecoin bubble—one that, if left unchecked, may lead to a sharp correction based on past cycles.
