Author: Galaxy Research
Compiled by: Deep Tide TechFlow
The 2025 cryptocurrency predictions from @glxyresearch cover price trends for Bitcoin and Ethereum, the ETHBTC ratio, Dogecoin and D.O.G.E., stablecoins, DeFi, L2 solutions, policy, venture capital, and more. Below are the predictions we just shared with @galaxyhq clients and partners:
Bitcoin prices are expected to break $150,000 in the first half of 2025 and reach or exceed $185,000 in the fourth quarter.
Adoption at the 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 rate has consistently outpaced all other asset classes, particularly the S&P 500 and gold, and this trend will continue into 2025. Bitcoin's market cap is expected to reach 20% of the total market cap of gold.
- @intangiblecoins
The total assets under management (AUM) of U.S. spot Bitcoin ETPs will exceed $250 billion in 2025.
In 2024, Bitcoin ETP products attracted over $36 billion in net inflows, becoming the best-performing ETP product portfolio in history. Many of the world's top hedge funds (such as Millennium, Tudor, and D.E. Shaw) have opted for 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 U.S.
- @intangiblecoins
Bitcoin is expected to again become one of the best-performing assets in global asset classes in risk-adjusted terms by 2025.
Bitcoin's exceptional performance is due not only 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. MicroStrategy, which calls itself the 'Bitcoin treasury', has particularly outstanding Sharpe ratio performance.
- @intangiblecoins
At least one top wealth management platform will recommend clients allocate 2% or more of their portfolio to Bitcoin in 2025.
Due to factors such as investment familiarization periods, internal education, and compliance requirements, no major wealth management firm has formally included Bitcoin allocation in its investment recommendations. However, this situation is expected to change in 2025, further driving inflows and AUM growth for U.S. 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 for strategic needs, portfolio diversification, or trade settlement considerations, Bitcoin will gradually enter the balance sheets of major enterprises and national-level investors. Particularly, non-aligned nations with large sovereign wealth funds or even countries opposed to the U.S. 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 through the introduction of 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, 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 activate in 2025.
- @hiroto_btc
More than half of the top 20 publicly listed Bitcoin mining companies by market cap will announce transformations or establish partnerships with hyperscalers, AI, or high-performance computing (HPC) companies by 2025.
As AI drives up computing demands, Bitcoin miners will gradually retrofit 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 zettahash by the end of 2025.
These predictions sketch a possible blueprint for the cryptocurrency market in 2025, filled with opportunities and challenges.
- @intangiblecoins, @SimritDhinsa
The Bitcoin DeFi market is expected to double in size by 2025.
As of the end of 2024, over $11 billion of wrapped Bitcoin (such as WBTC) has been locked in DeFi smart contracts. Of this, over 70% of locked Bitcoin is used as collateral for lending protocols. Additionally, about $4.2 billion is deposited through Bitcoin's largest staking protocol, Babylon. The current total valuation of the 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 growing 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 break $5,500 in 2025.
As regulatory pressures lessen in the DeFi and staking sectors, Ethereum will reach an all-time high in 2025. Cooperation 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. Concurrently, 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 will see significant rebounds.
The Ethereum staking rate is expected to exceed 50% by 2025.
The U.S. government may provide clearer regulatory guidance for the crypto industry, such as allowing the staking of ETH held by spot ETH ETPs. 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. Meanwhile, the rise in staking rates will further drive demand and value inflows 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 will 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 'merger' upgrade and transitioned to proof of stake in 2022, the ratio has continued to decline. 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
L2 economic activity is expected to exceed that of other Alt L1 networks in 2025.
The fee share of L2 networks (currently in the single digits) is expected to exceed 25% of the total fees of Alt L1 by the end of the year. As L2 networks approach their expansion limits early in the year, transaction fees may surge frequently, forcing networks to adjust gas limits and blob market parameters. However, technical solutions (such as alternative virtual machines like Reth client or Arbitrum Stylus) will enhance the efficiency of Rollups, keeping transaction costs within an acceptable range.
- @FullNodeChuck
DeFi may enter a 'dividend era' in 2025, with on-chain applications expected to distribute at least $1 billion 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, allowing users to directly benefit. 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 indicate that protocols may engage in buybacks and direct income distribution more frequently.
- @ZackPokorny_
On-chain governance may experience a revival in 2025, with applications attempting to implement 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 diversity in voting (most proposals pass with overwhelming majorities). However, with regulatory pressures easing and the success of Polymarket, both of these 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 U.S. 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 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 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 volume far exceeds that of traditional payment networks, such as ACH (annual growth of about 1%) and Visa (annual growth of about 7%). By 2024, stablecoins are gradually integrating into the global financial system. For example, the U.S.-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 the Bridge company for native stablecoin support. In addition, asset management giants like VanEck and BlackRock are also 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 groundwork for future development.
- 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. With increasing clarity in the regulation of existing stablecoin issuers and traditional banks, trusts, and custodial institutions, 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 generated from its USDT reserves to fund its portfolio, but other stablecoin issuers and protocols are attracting users through revenue sharing, which will 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 powerful lure, driving the entire DeFi space and possibly being integrated by fintech companies to enable new business models. In response, Tether may start distributing the yield from collateralized assets to USDT holders, and may 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 in 2025, with a year-on-year growth rate of over 50%.
As interest rates decline and the regulatory environment for crypto improves, investor interest in venture capital will significantly increase, driving a surge in venture capital activity. Historically, crypto venture capital fundraising has lagged behind broader crypto market trends, and a 'catch-up' phenomenon may occur in the next four quarters.
- @hiroto_btc, @intangiblecoins
Legislation on stablecoins is expected to pass both houses of the U.S. Congress and be signed by President Trump in 2025, but market structure legislation may not pass.
Legislation to establish 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 dollar-backed stablecoin supply will solidify the dollar's global dominance and further promote the development of the U.S. Treasury market. Coupled with easing restrictions on banks, trusts, and custodial institutions, the adoption of stablecoins is expected to grow significantly. However, market structure legislation (such as establishing registration, disclosure, and regulatory requirements for token issuers and exchanges, or amending existing SEC and CFTC rules to cover these entities) is unlikely to be completed and signed into law by 2025 due to its complexity.
- @intangiblecoins
The U.S. government is not expected to purchase Bitcoin in 2025 but may utilize existing reserves to build inventory and promote discussions on expanding Bitcoin reserve policies among government departments and agencies.
- @intangiblecoins
The U.S. 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 questions. 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 DOJ and SEC to investigate whether Prometheum has 'ties to China', while concerns have been raised about irregularities in its fundraising and financial reporting. Regardless of whether an investigation is initiated, the 'special purpose broker' license is expected to be abolished in 2025.
- @intangiblecoins
Dogecoin may break $1 for the first time in 2025, with a market cap expected to reach $100 billion.
As the most well-known and longest-standing memecoin, Dogecoin's market performance is expected to reach new heights in 2025. However, its market cap peak may be surpassed by the budget cuts of the 'Government Efficiency Department'. This department is expected to identify and successfully implement cuts exceeding Dogecoin's market cap peak in 2025.
- @intangiblecoins
Statement:
Members of Galaxy and/or Galaxy Research hold Bitcoin, Ethereum, and Dogecoin. Many predictions have not been shared, and there are more predictions to 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 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.
