Outlook for the Crypto Market: Five Things to Watch in 2025

1. Strong Development of Stablecoins

In 2024, the market capitalization of stablecoins is expected to grow by 48% to a new high of $193 billion, with trading volume exceeding $27 trillion, approximately three times that of the same period in 2023. Its role is shifting from trading to global capital flow and business expansion, with continued growth expected in the future, playing a greater role in global payments and other areas.

2. Promising Prospects for Tokenization of Real-World Assets

In 2024, significant progress is anticipated in the tokenization of real-world assets (RWA), with developments in multiple sectors beyond U.S. Treasury bonds. Despite facing challenges, sustained investment and technological advancements in 2025 are likely to establish it as an important foundation for the crypto market cycle, simplifying portfolio construction and the investment process.

3. ETFs Changing Supply and Demand in the Crypto Market

After the successful launch of a U.S. spot Bitcoin ETF, various institutional investors are increasingly holding crypto ETFs. The industry is now focusing on obtaining approval for spot ETFs for tokens like XRP, and if the SEC alters relevant regulations—such as removing restrictions on cash creation and redemption of shares or allowing staking features—it will enhance the appeal of ETFs.

4. Decentralized Finance (DeFi) Influence Expected to Expand

After encountering setbacks in the previous cycle, DeFi now has a more sustainable and resilient ecosystem, with total locked value and trading volume on decentralized exchanges reaching new levels. New applications utilizing it are providing new experiences, and combined with changes in the regulatory environment in the U.S., its influence may expand in the future.

5. Regulation Expected to Support the Development of the Crypto Market

The U.S. is expected to welcome a more crypto-friendly Congress, with majority bipartisan support for cryptocurrencies, likely leading to the establishment of a comprehensive regulatory framework and the introduction of stablecoin legislation, marking the end of the era of enforcement regulation. Meanwhile, countries in the G20 and other major financial centers are also formulating rules to create a favorable environment for innovation and growth, attracting more individuals and institutions to participate in the crypto economy.