Bitcoin’s Market Share Could Shrink – Here’s Why This Crypto Hedge Fund Thinks So

Bitcoin May Hit $125K, but Altcoins Could Outperform, Says ZX Squared Founder

The Trump administration is ushering in a new era of crypto innovation, according to CK Zheng, founder of crypto hedge fund ZX Squared Capital.

While Bitcoin could reach $125,000 by year’s end, other cryptocurrencies may see even stronger gains, Zheng told CoinDesk.

“There’s a correlation between bitcoin and altcoins, but I anticipate bitcoin dominance will decline,” Zheng said. “A thriving crypto ecosystem needs more diversification—60% of the market can’t be locked in bitcoin.”

A major catalyst is the Trump administration’s pro-crypto stance. The White House is actively considering a national crypto reserve, and the SEC has recently dropped lawsuits against major crypto firms such as Kraken and Uniswap, signaling a regulatory shift.

“Fresh policies and regulations will stimulate innovation and reshape the industry,” Zheng said. “But the effects may take time to materialize, likely spanning into 2025 and 2026.”

According to ZX Squared, Ethereum (ETH) and Solana (SOL) are well-positioned to benefit from this evolving landscape, particularly if AI-integrated blockchain projects gain traction. Zheng emphasized that scalability improvements are crucial—Solana must sustain its high throughput, while Ethereum must advance its network efficiency to stay competitive.

Bitcoin is expected to maintain its correlation with broader market trends, reacting to economic policies from the Trump administration. Macroeconomic forces will continue to dictate BTC’s price action, Zheng added, unless the U.S. government formally launches a national crypto reserve—an announcement that could be made at the White House Crypto Summit on Friday.

“A bitcoin strategic reserve is something the President has been considering for a while. He campaigned on it, and I believe we’ll see progress on this by Friday,” Commerce Secretary Howard Lutnick told The Pavlovic Today. “Bitcoin will play a central role, but other cryptocurrencies will also have a place, albeit in a different way.”

Even with heightened volatility and new tariffs on Mexico, Canada, and China, Zheng believes bitcoin will remain above $75,000.

“In the short term, market conditions remain unpredictable,” he said. “But this presents a prime opportunity for long-term investors looking to accumulate bitcoin.”