Original source: Galaxy Research
Original translation 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 are the predictions we just shared with @galaxyhq clients and partners:
Bitcoin's price is expected to exceed $150,000 in the first half of 2025 and reach or exceed $185,000 in the fourth quarter.
Adoption at institutional, corporate, and national levels will be the main driving force behind Bitcoin's price reaching new highs in 2025. Since its inception, Bitcoin's appreciation has consistently outpaced all other asset classes, especially the S&P 500 and gold, and this trend is expected to continue in 2025. Bitcoin's market cap is projected to reach 20% of the total market cap of gold.
- @intangiblecoins
The total assets under management (AUM) for US spot Bitcoin ETPs will exceed $250 billion by 2025.
In 2024, Bitcoin ETP products attracted over $36 billion in net inflows, becoming the best-performing ETP product suite in history. Many top hedge funds globally (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 (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 not only due to record capital inflows but also driven by price increases in 2024. According to risk-adjusted return metrics, Bitcoin ranks third among global assets, behind only a few top assets. Meanwhile, MicroStrategy, which calls itself a 'Bitcoin treasury,' has particularly outstanding Sharpe ratio performance.
- @intangiblecoins
At least one top wealth management platform will recommend clients allocate 2% or more of Bitcoin in 2025.
Due to factors such as the familiarity period for investment, internal education, and compliance requirements, no major wealth management firm currently includes Bitcoin allocation in its investment recommendations. However, this situation is expected to change in 2025, further driving the inflow of funds 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.
Whether due to strategic needs, portfolio diversification, or trade settlement considerations, Bitcoin will gradually enter the balance sheets of major corporations and national-level investors. Particularly, non-aligned countries with large sovereign wealth funds, and even countries opposed to the US, will actively acquire Bitcoin through mining or other means.
- JW
Bitcoin developers are expected to reach 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 Bitcoin's soft fork consensus is extremely rare and time-consuming, it is expected that consensus will be reached in 2025 to jointly promote the introduction of OP_CTV, OP_CSFS, and/or OP_CAT. However, this upgrade will not be activated in 2025.
- @hiroto_btc
More than half of the top 20 publicly traded Bitcoin mining companies by market cap will announce transformations or establish partnerships with hyperscalers, AI, or high-performance computing (HPC) companies by 2025.
With the surge in demand for computing from AI, Bitcoin miners will gradually transform existing facilities, build new infrastructure, or collaborate with HPC companies to deploy mining farms. This trend will limit the annual growth rate of global computing power, which is expected to reach 1.1 zetahash by the end of 2025.
These predictions outline a possible blueprint for the cryptocurrency market in 2025, filled with opportunities and accompanied by challenges.
- @intangiblecoins, @SimritDhinsa
The Bitcoin DeFi market size is expected to double by 2025.
As of the end of 2024, over $11 billion of wrapped Bitcoin (such as WBTC) has been locked in DeFi smart contracts. Among them, over 70% of locked Bitcoin is used as collateral for lending protocols. In addition, approximately $4.2 billion is deposited through the largest Bitcoin staking protocol, Babylon. The total valuation of the current Bitcoin DeFi market is $15.4 billion, and significant growth is expected by 2025. This growth will come from multiple directions, including existing DeFi protocols on Ethereum L1/L2, new DeFi protocols on Bitcoin L2, and staking layers like Babylon. Key drivers for the market doubling include: cbBTC supply increasing by 150% year-on-year, WBTC supply increasing by 30%, Babylon's TVL reaching $8 billion, and new Bitcoin L2 networks achieving $4 billion in DeFi TVL.
- @hiroto_btc
Ethereum's price is expected to exceed $5500 in 2025.
As regulatory pressure eases in DeFi and staking, Ethereum will reach a historic high in 2025. 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 major beneficiaries. Meanwhile, enterprises will gradually attempt to leverage Layer 2 networks based on Ethereum technology. Some public blockchain-based games may find product-market fit, and NFT trading volume is also expected to see a significant rebound.
The staking rate of Ethereum is expected to exceed 50% by 2025.
The US government may provide clearer regulatory guidance for the crypto industry, such as allowing spot ETH ETPs to stake a portion 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 take monetary policy adjustments more seriously. Meanwhile, the rise in staking rates will further drive demand and value inflow into staking pools (like Lido and Coinbase) and re-staking protocols (like EigenLayer and Symbiotic).
-@christine_dkim
The ETH/BTC ratio is expected to drop below 0.03 in 2025 but rebound to above 0.06 by the end of the year.
The ETH/BTC ratio is one of the most closely watched trading pairs in the crypto market. Since Ethereum completed its 'Merge' upgrade and transitioned to proof of stake in 2022, this ratio has been on a downward trend. 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
The economic activity of L2 will surpass other Alt L1 networks by 2025.
The fee share of L2 networks (currently in the single digits) is expected to exceed 25% of total fees for Alt L1 by the end of the year. As L2 networks approach their scaling limits at the beginning of the year, transaction fees may spike frequently, forcing networks to adjust gas limits and blob market parameters. However, technical solutions (such as the Reth client or alternative VMs like Arbitrum Stylus) will enhance Rollup efficiency, keeping transaction costs within acceptable ranges.
- @FullNodeChuck
DeFi may enter an 'era of dividends' in 2025, with on-chain applications expected to distribute at least $1 billion in value to users and token holders.
As DeFi regulation gradually clarifies, the value-sharing mechanisms of on-chain applications will be expanded. Projects like Ethena and Aave have already begun discussing or implementing fee mechanisms through proposals that will enable 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 relaxed regulatory environment and an increase in on-chain activity suggest that protocols may engage in buybacks and direct income distributions more frequently.
- @ZackPokorny_
On-chain governance may be revitalized in 2025, with applications attempting to adopt futurist governance models.
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 main issues: low participation rates and a lack of voting diversity (most proposals pass with overwhelming support). However, with regulatory pressure easing and the success of Polymarket, these two issues are expected to improve by 2025. By then, more applications will shift from traditional governance models to futurist governance models, enhancing voting diversity and optimizing governance outcomes.
- @ZackPokorny_
- @FullNodeChuck
- @hiroto_btc
The world's four largest custodians are expected to begin offering digital asset custody services in 2025.
The US Office of the Comptroller of the Currency (OCC) plans to provide a policy pathway for national banks to custody digital assets, which will drive the world's four largest custodians—BNY Mellon, State Street, JPMorgan Chase, and Citibank—to launch digital asset custody services in 2025.
- @intangiblecoins
At least ten stablecoins supported by traditional finance are expected to be launched in 2025.
From 2021 to 2024, the stablecoin market has grown rapidly, with 202 projects now in existence, 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 volume far exceeds that of traditional payment networks, such as ACH (annual growth of about 1%) and Visa (annual growth of about 7%). In 2024, stablecoins are gradually integrating into the global financial system. For example, 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 collaborating with stablecoin projects, actively laying out in this field. As the regulatory environment gradually clarifies, traditional financial institutions will further integrate stablecoins into their operations to seize market opportunities and lay the foundation for future growth.
- JW
The total supply of stablecoins is expected to double by 2025, exceeding $400 billion.
The application of stablecoins in payments, remittances, and settlements is rapidly growing. As the regulation of existing stablecoin issuers, as well as traditional banks, trusts, and custodians, becomes clearer, a significant surge in stablecoin supply is expected by 2025.
- @intangiblecoins
Tether's market share is expected to fall below 50% by 2025, challenged by yield-bearing stablecoins.
Tether uses the income from its USDT reserves to fund its portfolio, but other stablecoin issuers and protocols attract users through revenue sharing, which will lead existing users to switch from Tether to yield-bearing solutions. For example, the USDC rewards that Coinbase pays on its exchange and wallet balances will become a strong attraction, driving the entire DeFi space, and may even be integrated by fintech companies to enable new business models. In response, Tether may begin distributing the income from collateralized assets to USDT holders, and may even launch competitive yield-bearing products, such as a market-neutral stablecoin.
- @FullNodeChuck
The total capital investment in crypto venture capital (VC) is expected to exceed $150 billion in 2025, with a year-on-year increase of over 50%.
As interest rates decline and the crypto regulatory environment improves, investor interest in venture capital will increase significantly, driving a surge in venture capital activity. The fundraising for crypto venture capital has historically lagged behind broader crypto market trends, and a 'catch-up' phenomenon may occur in the next four quarters.
- @hiroto_btc, @intangiblecoins
Legislation for stablecoins is expected to pass both houses of the US Congress and be signed by President Trump in 2025, but market structure legislation may not be passed.
Legislation establishing registration and regulatory frameworks for stablecoin issuers is expected to pass with bipartisan support and be signed into law by the end of 2025. The growth of dollar-backed stablecoin supply will consolidate the dollar's global dominance and further promote the development of the US Treasury market. Coupled with the easing of restrictions on banks, trusts, and custodians, the adoption of stablecoins is anticipated to grow 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 complex and is not expected to 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 obscure broker, suddenly gained a new broker license in 2023 and publicly supported SEC Chairman Gensler's view on the securities status of digital assets, raising widespread questions. Its CEO faced questioning from Republican lawmakers during a congressional hearing, and according to FINRA records, Prometheum's alternative trading system (ATS) has not conducted any transactions. Republicans have called for the Department of Justice and SEC to investigate whether Prometheum has 'ties to China,' while pointing out irregularities in its fundraising and financial reporting. Regardless of whether an investigation occurs, the 'special purpose broker' license is expected to be abolished in 2025.
- @intangiblecoins
Dogecoin may surpass $1 for the first time in 2025, with a market cap projected to reach $100 billion.
As the most well-known and historically oldest memecoin, Dogecoin's market performance will reach new heights in 2025. However, its market cap peak may be surpassed by budget cuts identified and successfully implemented by the 'government efficiency department.' This department is expected to identify and successfully implement cuts exceeding Dogecoin's market cap peak in 2025.
- @intangiblecoins
Disclaimer: Members of Galaxy and/or Galaxy Research hold Bitcoin, Ethereum, and Dogecoin. Many predictions have not been 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 position of Galaxy or any of its affiliates. These predictions will not be updated.
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