Bitcoin No Longer a Niche Investment as Institutional Adoption Takes Off: WisdomTree

From coindesk By Will Canny| Edited by Parikshit Mishra

What to know:

The institutionalization of crypto markets means that bitcoin (BTC) is no longer considered a niche investment, and increased adoption is forcing hesitant investors to reconsider the asset class, WisdomTree said in a report Monday, which looked at crypto trends for 2025.

The investment manager noted that portfolios with allocations to bitcoin are consistently outperforming those that don't hold the world's largest cryptocurrency.

Asset managers need to integrate the digital asset into multi-asset portfolios or "risk falling behind in a rapidly evolving financial landscape," wrote analyst Dovile Silenskyte, adding that bitcoin adoption is expected to grow this year as more clients demand exposure to the asset class.

The  launch  of spot exchange-traded funds (ETFs) in the U.S. helped take crypto more mainstream in 2024. This momentum is expected to continue this year as the regulatory environment becomes more friendly in the U.S. under President Trump, and as more countries approve exchange-traded products (ETPs) for altcoins such as  solana 's SOL and  XRP , WisdomTree said.

"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.

The Ethereum blockchain's role as the "backbone of  decentralized finance  (DeFi),  non-fungible tokens  (NFTs) and  Web3  is unmatched," the report said, but its scalability issues are still a problem.

Still, recent upgrades including  Dencun  are expected to drive layer-2 adoption on the blockchain, the report noted.

Stablecoins  are "becoming indispensable to the global financial system," and networks such as Solana are ideal for stablecoin payments and remittances, WisdomTree said.

Tokenization , the process of putting the ownership of real world assets on the blockchain, will expand dramatically in 2025, and will transform industries from private equity to venture capital, the report added.