Odaily Planet Daily News Coinbase recently released a cryptocurrency market outlook, highlighting five areas to watch in 2025: 1. Stablecoins are just getting started. Stablecoins have become a killer application in cryptocurrency. As of December 1, 2024, the market cap of stablecoins grew by 48%, reaching a historic high of $193 billion, with some analysts predicting that this figure could grow to $3 trillion within the next five years. Year-to-date, the trading volume of stablecoins has exceeded $27 trillion, a year-on-year increase of about three times. As stablecoins continue to soar, we will soon see their first and major use case being global capital movement and commerce rather than trading; 2. RWA tokenization is expected to achieve significant growth. According to data from rwa.xyz, as of December 1, the tokenization of RWAs grew by over 60%, reaching $13.5 billion (excluding stablecoins), and tokenization is expected to make significant progress in 2024. Companies are attempting to use tokenized assets as collateral for other financial transactions (such as those involving derivatives), which can simplify operations and reduce risks. Additionally, the RWA trend is moving beyond assets like U.S. Treasury bonds and money market funds to gain attention in private credit, commodities, corporate bonds, real estate, and insurance. We believe that the cumulative effect of sustained investment and technological improvements in 2025 should lay the foundation for tokenization to become a cornerstone of the current cryptocurrency market cycle. Ultimately, we believe that tokenization can simplify the entire portfolio construction and investment process by bringing it on-chain, although this may still take several years; 3. Crypto ETFs have forever changed the supply-demand dynamics of cryptocurrencies. Following the record success of spot Bitcoin ETFs in the U.S., the entire cryptocurrency market has been transformed. Almost every type of institutional investor (including endowments, pension funds, hedge funds, investment advisors, and family offices) now holds cryptocurrency ETFs. With the increasing adoption rate by institutions, we believe these holders will provide a stable source of long-term demand for this asset class. Looking ahead, the industry is focused on U.S. approval of spot ETFs for tokens like XRP, SOL, LTC, and HBAR, but we believe meaningful institutional demand in the short term may be limited to a small subset of assets. We are more interested in what happens if the SEC lifts the authorization for cash rather than physical creation and redemption of ETF shares or allows these products to be included in staking. These changes could enhance the potential returns for ETF holders, making ETFs more attractive to investors; 4. The DeFi revival will usher it into a new era. DeFi suffered some shocks in the last cycle, but a more sustainable and resilient ecosystem has emerged. Lending protocol TVL has reached an all-time high, while DEX trading volume share (relative to CEX) has peaked. Additionally, shifts in the U.S. regulatory landscape and the adoption of on-chain verification may help provide a clear path for traditional institutional investors to participate in DeFi. All of this suggests that DeFi may expand its influence in the near future; 5. Regulation will ultimately shift from headwinds to tailwinds. For years, the U.S. has suffered from regulatory ambiguity and inconsistency, but the tide has turned, as the U.S. Congress is set to welcome the most crypto-friendly Congress in history. Both the House and Senate have bipartisan support for cryptocurrencies, which means U.S. regulation will support cryptocurrency performance in 2025. Cryptocurrencies have become a campaign issue, highlighting the urgency for policymakers to align with the changing needs of this influential voting bloc, and we believe the likelihood of achieving new legislative milestones is high. Specifically, we expect the U.S. to establish a comprehensive regulatory framework, introduce robust stablecoin legislation, and end the era of enforcement-based regulation. The U.S. is not the only jurisdiction ready to make regulatory progress. Many G20 countries and major financial centers are developing rules to accommodate digital assets, which will help create a more favorable environment for innovation and growth. In summary, these initiatives could open doors for more people and institutions, giving them the confidence to engage in the crypto economy. As the regulatory and technological landscape evolves, the crypto ecosystem is expected to grow significantly, as broader adoption will drive the industry closer to realizing its full potential. Breakthroughs and advancements in 2025 are likely to determine the long-term trajectory of the crypto industry for decades to come. This will be a pivotal year.

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