By September 2024, central bank interest rate cuts and economic policies will further boost the growth trend of cryptocurrencies.

However, the pivotal event was Donald Trump's victory in the U.S. presidential election. Trump supported cryptocurrency during his campaign and, following his victory, appointed many cryptocurrency advocates to key positions, including Paul Atkins as Chairman of the U.S. Securities and Exchange Commission (SEC).

These moves have pushed Bitcoin above the $100,000/BTC mark for the first time, leading to the growth of various altcoins. Altcoins are alternative currencies created to improve or provide features that Bitcoin lacks, such as faster transaction speeds, better scalability, or specific applications for various fields.

The total market value of cryptocurrencies currently stands at $3.4 trillion, nearly double that of last year, despite a sell-off following the Federal Reserve's tough stance last week.

Analysts from Citi Group, led by Alex Saunders, recently stated in a report that: "The cryptocurrency market has grown strongly this year, with total capitalization increasing by over 90%."

So, will the cryptocurrency market continue to grow in 2025? Citi's report points out 6 key factors that could influence the value of cryptocurrencies next year, including ETFs, regulations, and the outlook for stablecoins.

Supporting Macroeconomic Environment

Analysts expect the current macroeconomic context to continue supporting risky investment transactions in the first quarter of 2025 but warn that the outlook thereafter is uncertain. The future will depend on the economic policies of President-elect Donald Trump and the volatility of the stock market.

Continuous Cash Flow into Spot ETFs

Spot Bitcoin ETFs have attracted $36.4 billion in capital since launching in January this year, while Ethereum ETFs have reached a value of $2.4 billion since July 2024.

The SEC's approval of these funds after many years of waiting has made cryptocurrency trading easier. Through ETFs, investors can track the prices of Bitcoin and Ethereum without directly owning these coins.

Multi-Asset Investment Portfolio

The allocation of cryptocurrency in investment portfolios will also play an important role. Analysts say that Bitcoin has added value in multi-asset portfolios this year, but it remains a risky and highly volatile asset.

To allocate 5% of the portfolio, cryptocurrency needs to deliver a performance above 21% to compensate for risk, based on recent risk-return ratios.

Diversification of Stablecoin

Stablecoins, often pegged to fiat currencies like the USD, are helping to make the cryptocurrency market more stable. Following Trump's victory, the industry is expected to grow with many new stablecoins emerging, threatening the position of Tether – the largest stablecoin issuer currently. Analysts believe that diversification of stablecoins will help reduce systemic risk from a specific issuer.

Greater Adoption

Analysts emphasize that greater adoption is the key factor driving the recent boom in the cryptocurrency market. Although trading volume and market capitalization have increased, acceptance in countries facing currency issues such as Turkey, Argentina, and Venezuela will determine the long-term growth potential of this market.

Regulation Easing

With Donald Trump's appointment of many pro-cryptocurrency officials to key positions, the cryptocurrency market expects more 'lenient' regulations, which will facilitate broader acceptance. Analysts argue that this is not necessarily a story of deregulation but rather a reduction of barriers, while forecasting a legislative-based approach rather than enforcing measures as before.

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