Mike Novogratz's Galaxy has predicted that the price of Ethereum (ETH), the leading altcoin, will be trading above $5,500 in 2025. 

A friendlier regulatory environment for the decentralized finance (DeFi) sector is seen as a major bullish catalyst for the altcoin. 

Galaxy Research believes that traditional capital markets will likely be able to experiment with public blockchains within regulatory sandboxes. 

As reported by U.Today, the Ether price typically tends to outperform in Q1, and many market participants expect this seasonal trend to continue this time around. 

During the 2021 bull run, Ethereum overperformed due to the surging popularity of non-fungible tokens (NFTs). Galaxy believes that the NFT sector will be able to stage a comeback next year. 

When it comes to the DeFi sector, Galaxy Research expects it to enter the "dividend era" in 2025, with on-chain applications distributing more nominal value to users and holders. 

Bitcoin might approach $200,000 

The firm also believes that the price of Bitcoin could potentially test $185,000 in 2022. 

In fact, it expects the leading cryptocurrency to surpass the $150,000 level in the first half of 2025. 

"A combination of institutional, corporate, and nation-state adoption will propel Bitcoin to new heights in 2025," the firm said.

Galaxy has also predicted that Ether will end up substantially outperforming Bitcoin in 2025, with the ETH/BTC ratio potentially soaring to 0.06. However, prior to that, it might briefly dip below 0.03, according to Galaxy.