Author: Galaxy Research
Compiled by: Shenchao TechFlow
The 2025 cryptocurrency predictions from @glxyresearch cover Bitcoin and Ethereum price trends, ETHBTC ratio, Dogecoin and D.O.G.E., stablecoins, DeFi, L2 solutions, policies, venture capital, and more. Here is what we just shared with @galaxyhq clients and partners:
Bitcoin's price is expected to break 150,000 dollars in the first half of 2025 and reach or exceed 185,000 dollars in the fourth quarter.
Adoption at the institutional, corporate, and national levels will become a major driving force for Bitcoin's price to reach new highs in 2025. Since its inception, Bitcoin's appreciation rate has always outpaced all other asset classes, especially the S&P 500 and gold, and this trend will continue in 2025. Bitcoin's market capitalization is expected to reach 20% of the total market capitalization of gold.
- @intangiblecoins
The total assets under management (AUM) of the US spot Bitcoin ETP is expected to exceed 250 billion dollars in 2025.
In 2024, Bitcoin ETP products attracted over 36 billion dollars in net inflows, becoming the best-performing ETP product lineup in history. Many of the world's top hedge funds (such as Millennium, Tudor, and D.E. Shaw) have chosen Bitcoin ETPs, and according to 13F filings, the Wisconsin Investment Board (SWIB) also holds relevant positions. In just one year, the AUM of Bitcoin ETPs is only 24 billion dollars (19%) away from surpassing the total size of all physical gold ETPs in the US.
- @intangiblecoins
Bitcoin will once again become one of the best-performing assets among global assets on a risk-adjusted basis in 2025.
Bitcoin's outstanding performance is driven not only by record capital inflows but also by the price increase in 2024. According to risk-adjusted return metrics, Bitcoin ranks third among global assets, trailing only a few top assets. MicroStrategy, a company that claims to be the 'Bitcoin treasury', has particularly outstanding performance in its Sharpe ratio.
- @intangiblecoins
At least one top wealth management platform will recommend clients allocate 2% or more of Bitcoin in 2025.
Due to factors such as investment familiarity periods, internal education, and compliance requirements, there are currently no major wealth management firms that formally include Bitcoin allocation in their investment recommendations. However, this situation is expected to change in 2025, further driving inflows and AUM growth for US spot Bitcoin ETPs.
- @intangiblecoins
Five Nasdaq 100 companies and five countries will announce the inclusion of Bitcoin in their balance sheets or sovereign wealth funds.
For strategic needs, portfolio diversification, or trade settlement considerations, Bitcoin will gradually enter the balance sheets of major enterprises and national-level investors. Especially non-aligned countries, those with large sovereign wealth funds, and even countries opposed to the US will actively acquire Bitcoin through mining or other means.
- JW
Bitcoin developers will reach a consensus on the next protocol upgrade in 2025.
Since 2020, Bitcoin core developers have been discussing how to enhance the programmability of transactions by introducing opcodes. As of the end of 2024, the most supported opcodes include OP_CTV (BIP 119) and OP_CAT (BIP 347). Although soft fork consensus in Bitcoin is extremely rare and time-consuming, consensus is expected to be reached in 2025 to jointly push for the introduction of OP_CTV, OP_CSFS, and/or OP_CAT. However, this upgrade will not activate in 2025.
- @hiroto_btc
More than half of the top 20 publicly listed Bitcoin mining companies by market capitalization will announce transformations or partnerships with hyperscalers, AI, or high-performance computing (HPC) companies in 2025.
With the surge in computing demands from AI, Bitcoin miners will gradually retrofit existing facilities, build new infrastructure, or co-deploy mining farms with HPC companies. This trend will limit the annual growth rate of global hash power, which is expected to reach 1.1 zettahash by the end of 2025.
These predictions outline a possible blueprint for the cryptocurrency market in 2025, filled with opportunities and challenges.
- @intangiblecoins, @SimritDhinsa
The Bitcoin DeFi market size is expected to double by 2025.
As of the end of 2024, over 11 billion dollars of wrapped Bitcoin (such as WBTC) have been locked in DeFi smart contracts. Among them, over 70% of the locked Bitcoin is used as collateral for lending protocols. In addition, there are about 4.2 billion dollars deposited through Bitcoin's largest staking protocol, Babylon. The current total valuation of the Bitcoin DeFi market is 15.4 billion dollars, expected to see significant growth by 2025. This growth will come from various directions, including existing DeFi protocols on Ethereum L1/L2, new DeFi protocols on Bitcoin L2, and staking layers like Babylon. Key drivers expected to double the market include: a 150% year-on-year increase in cbBTC supply, a 30% increase in WBTC supply, Babylon's TVL reaching 8 billion dollars, and new Bitcoin L2 networks achieving 4 billion dollars in DeFi TVL.
- @hiroto_btc
Ethereum's price is expected to break 5,500 dollars in 2025.
With the easing of regulatory pressure in DeFi and staking sectors, Ethereum is expected to reach a historical high in 2025. The collaboration between DeFi and traditional finance may unfold in a new regulatory sandbox environment, allowing traditional capital markets to explore public blockchains more deeply, with Ethereum and its ecosystem being the main beneficiaries. At the same time, enterprises will gradually attempt to use Layer 2 networks based on Ethereum technology. Some public blockchain-based games may find product-market fit, and NFT trading volumes are expected to see a significant rebound.
The Ethereum staking rate is expected to exceed 50% in 2025.
The US government may provide clearer regulatory guidance for the crypto industry, such as allowing spot ETH ETPs to stake part of their held ETH. Demand for staking will continue to grow next year, and by the end of 2025, the amount of staked Ethereum may exceed half of its circulating supply. This will prompt Ethereum developers to seriously consider adjusting the network's monetary policy. At the same time, the increase in staking rates will further drive demand and value flows into staking pools (like Lido and Coinbase) and restaking protocols (like EigenLayer and Symbiotic).
-@christine_dkim
The ETH/BTC ratio is expected to fall below 0.03 in 2025 but will rebound to above 0.06 by the end of the year.
The ETH/BTC ratio is one of the most watched trading pairs in the crypto market. The ratio has been declining since Ethereum completed its 'Merge' upgrade and transitioned to proof of stake in 2022. However, changes in the regulatory environment are expected to particularly support Ethereum and its application layer, especially DeFi, reigniting investor interest in the world's second-largest blockchain.
- @intangiblecoins
Economic activity on L2 is expected to exceed that of other Alt L1 networks in 2025.
The proportion of fees for L2 networks (currently in the mid-single digits) is expected to exceed 25% of total fees for Alt L1 by the end of the year. As L2 networks approach their expansion limits at the beginning of the year, transaction fees may frequently spike, forcing networks to adjust gas limits and blob market parameters. However, technical solutions (such as the Reth client or alternative virtual machines like Arbitrum Stylus) will enhance Rollup efficiency, keeping transaction costs within acceptable ranges.
- @FullNodeChuck
DeFi may enter a 'dividend era' in 2025, with on-chain applications expected to distribute at least 1 billion dollars in value to users and token holders.
As DeFi regulation becomes clearer, the value-sharing mechanisms of on-chain applications will be expanded. Projects like Ethena and Aave have begun discussing or implementing fee mechanisms through proposals that will allow users to benefit directly. Other protocols that previously opposed such mechanisms (like Uniswap and Lido) may reassess their positions due to regulatory clarity and competitive pressure. A more lenient regulatory environment and increased on-chain activity suggest that protocols may conduct buybacks and direct revenue distributions more frequently.
- @ZackPokorny_
On-chain governance may be revitalized in 2025, with applications attempting to adopt a futurist governance model.
The total number of active voters in on-chain governance is expected to grow by at least 20%. On-chain governance has long faced two major issues: low participation rates and lack of voting diversity (most proposals pass with overwhelming majorities). However, with regulatory pressure easing and the success of Polymarket, these two issues are expected to improve in 2025. More applications will then shift from traditional governance models to futurist governance models, enhancing voting diversity and optimizing governance outcomes.
- @ZackPokorny_
- @FullNodeChuck
- @hiroto_btc
It is expected that the world's four major custodial banks will begin offering digital asset custody services in 2025.
The US Office of the Comptroller of the Currency (OCC) plans to provide a policy path for national banks to custody digital assets, which will drive the four major custodial banks—BNY Mellon, State Street, JPMorgan, and Citibank—to launch digital asset custody services in 2025.
- @intangiblecoins
At least ten stablecoins backed by traditional finance are expected to launch in 2025.
From 2021 to 2024, the stablecoin market has grown rapidly, with 202 projects currently, some of which have established close ties with traditional finance (TradFi). Not only is the number of projects increasing, but the growth rate of their trading volumes far outpaces traditional payment networks, such as ACH (approximately 1% annual growth) and Visa (approximately 7% annual growth). By 2024, stablecoins are gradually integrating into the global financial system. For instance, the US licensed FV Bank has supported direct stablecoin deposits, while Japan's three major banks are collaborating with SWIFT through the Pax project for faster and lower-cost cross-border fund transfers. Payment platforms are also actively building stablecoin infrastructure, such as PayPal launching the PYUSD stablecoin on the Solana blockchain, and Stripe acquiring Bridge to natively support stablecoins. Additionally, asset management giants like VanEck and BlackRock are also collaborating with stablecoin projects to strategically position themselves in this field. As the regulatory environment becomes clearer, traditional financial institutions will further integrate stablecoins into their operations to seize market opportunities and lay a foundation for future growth.
- JW
The total supply of stablecoins is expected to double by 2025, exceeding 400 billion dollars.
The application of stablecoins in payments, remittances, and settlements is rapidly growing. As regulation of existing stablecoin issuers and traditional banks, trusts, and custodial institutions gradually clarifies, the supply of stablecoins is expected to experience explosive growth in 2025.
- @intangiblecoins
Tether's market share is expected to fall below 50% in 2025, challenged by yield-generating stablecoins.
Tether uses the income from its USDT reserves to fund its portfolio, but other stablecoin issuers and protocols attract users through profit-sharing mechanisms, which may lead existing users to shift from Tether to yield-generating solutions. For example, the USDC rewards paid on Coinbase's exchange and wallet balances will be a strong attraction, driving the entire DeFi space and potentially being integrated by fintech companies to enable new business models. In response, Tether may start distributing the income from its collateral assets to USDT holders, or even launch competitive yield-generating products, such as a market-neutral stablecoin.
- @FullNodeChuck
Total capital investment in crypto venture capital (VC) is expected to exceed 150 billion dollars in 2025, with a year-on-year increase of over 50%.
With falling interest rates and an improved regulatory environment for crypto, investor interest in venture capital will significantly increase, driving a surge in venture capital activity. Crypto venture capital fundraising has historically lagged behind broader crypto market trends, and a 'catch-up' phenomenon may occur in the next four quarters.
- @hiroto_btc, @intangiblecoins
Stablecoin legislation is expected to pass both houses of the US Congress and be signed by President Trump in 2025, but market structure legislation may not pass.
Legislation establishing a registration and regulatory framework for stablecoin issuers is expected to pass with bipartisan support and be signed into law by the end of 2025. The growth of US dollar-backed stablecoin supply will reinforce the dollar's global dominance and further promote the development of the US Treasury market. Combined with the easing of restrictions on banks, trusts, and custodial institutions, the adoption of stablecoins is expected to increase significantly. However, market structure legislation (such as establishing registration, disclosure, and regulatory requirements for token issuers and exchanges, or adjusting existing SEC and CFTC rules to cover these entities) is expected to be more complex and may not be completed and signed into law by 2025.
- @intangiblecoins
The US government is not expected to purchase Bitcoin in 2025 but may utilize existing reserves to establish a stockpile and promote discussions on expanding Bitcoin reserve policies among government departments and agencies.
- @intangiblecoins
The US Securities and Exchange Commission (SEC) is expected to investigate Prometheum, the first 'special purpose broker'.
Prometheum, a previously unknown broker, suddenly obtained a new broker license in 2023 and publicly supported SEC Chairman Gensler's view on the securities status of digital assets, raising widespread skepticism. Its CEO faced questioning from Republican lawmakers at a congressional hearing, and according to FINRA records, Prometheum's alternative trading system (ATS) has not conducted any trades. Republicans have called for the Department of Justice and SEC to investigate whether Prometheum has 'connections to China', while some have pointed out irregularities in its fundraising and financial reporting. Regardless of whether an investigation is launched, it is expected that the 'special purpose broker' license will be abolished by 2025.
- @intangiblecoins
Dogecoin may surpass 1 dollar for the first time in 2025, with a market capitalization expected to reach 100 billion dollars.
As the world's most well-known and long-standing meme coin, Dogecoin's market performance will reach new heights in 2025. However, its market cap peak may be surpassed by the budget cuts identified and successfully implemented by the 'government efficiency department'. This department is expected to identify and successfully implement cuts exceeding the market cap peak of Dogecoin in 2025.
- @intangiblecoins
Statement:
Members of Galaxy and/or Galaxy Research hold Bitcoin, Ethereum, and Dogecoin. Many predictions were not shared, and more predictions can be made. These predictions are not investment advice and do not constitute an offer, recommendation, or invitation to buy or sell any securities (including Galaxy securities). These predictions only represent the views of the Galaxy Research team as of December 2024 and do not necessarily reflect the positions of Galaxy or any of its affiliates. These predictions will not be updated.