Author: Galaxy Research
Translated by: Deep Tide TechFlow
Forecasts for 2025 from @glxyresearch cover price trends for Bitcoin and Ethereum, ETHBTC ratio, Dogecoin and DOGE, stablecoins, DeFi, L2 solutions, policy, venture capital, and more. Here are the forecasts we just shared with @galaxyhq clients and partners:
The price of Bitcoin is expected to exceed $150,000 in the first half of 2025, reaching or exceeding $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 has appreciated faster than all other asset classes, particularly 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) of U.S. spot Bitcoin ETPs is expected to 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 DE Shaw) chose Bitcoin ETPs, and according to 13F filings, the State of Wisconsin Investment Board (SWIB) also holds related positions. In just one year, the AUM of Bitcoin ETPs is only $24 billion (19%) away from surpassing the total size of all U.S. physical gold ETPs.
– @intangiblecoins
Bitcoin will again be one of the best-performing assets in the world on a risk-adjusted basis in 2025.
Bitcoin's outstanding performance is not only due to record 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 the 'Bitcoin treasury,' shows 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 currently formally includes Bitcoin allocation in its investment recommendations. However, this situation will 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 corporations and national-level investors. This is especially true for non-aligned countries, countries with large sovereign wealth funds, and even countries in opposition to the U.S., which 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 transaction programmability through the introduction of opcodes. By 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 to be reached in 2025, jointly promoting the introduction of OP_CTV, OP_CSFS, and/or OP_CAT. However, this upgrade will not be initiated in 2025.
– @hiroto_btc
More than half of the publicly listed Bitcoin mining companies ranked in the top 20 by market value will announce transformations or establish partnerships with hyperscalers, AI, or high-performance computing (HPC) companies in 2025.
As AI drives an increase in computational demand, Bitcoin miners will gradually retrofit existing facilities, build new infrastructure, or deploy mining farms in collaboration with HPC companies. This trend will limit the annual growth rate of global computing power, with global computing power expected to reach 1.1 zetahash by the end of 2025.
These forecasts sketch a possible blueprint for the cryptocurrency market in 2025, full of opportunities but also challenges.
– @intangiblecoins, @SimritDhinsa
The size of the Bitcoin DeFi market is expected to double in 2025.
By the end of 2024, over $11 billion worth of wrapped Bitcoin (such as WBTC) will be locked in DeFi smart contracts. Of this, over 70% of the locked Bitcoin will be used as collateral for lending protocols. Additionally, through the largest Bitcoin staking protocol, Babylon, there are about $4.2 billion in deposits. The total valuation of the Bitcoin DeFi market is currently $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% annually, WBTC supply increasing by 30%, Babylon's TVL reaching $8 billion, and new Bitcoin L2 networks achieving $4 billion in DeFi TVL.
– @hiroto_btc
It is expected that the price of Ether will exceed $5,500 in 2025.
As regulatory pressure in the DeFi and staking sectors eases, Ethereum is expected to reach historical highs 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 as major beneficiaries. At the same time, enterprises will gradually attempt to adopt Layer 2 networks based on Ethereum technology. Some blockchain-based games may find product-market fit, and NFT trading volume will also see a significant rebound.
The Ethereum staking rate is expected to exceed 50% in 2025.
The U.S. government may provide clearer regulatory guidance for the crypto industry, such as allowing spot ETH ETPs to stake part 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 seriously consider adjusting the network's monetary policy. At the same time, the rising staking rate 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 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 'merge' upgrade in 2022 and transitioned to proof of stake, this ratio has been on a continuous decline. However, changes in the regulatory environment are expected to particularly support Ethereum and its application layer, especially DeFi, thereby reigniting investors' interest in the world's second-largest blockchain.
– @intangiblecoins
Economic activity in L2 will surpass that of other Alt L1 networks in 2025.
The cost share of L2 networks (currently in the mid-single digits) is expected to exceed 25% of the total costs of Alt L1 by the end of the year. As L2 networks approach their scaling limits early in the year, transaction fees may spike frequently, forcing the network to adjust gas limits and blob market parameters. However, technical solutions (like the Reth client or alternative virtual machines like Arbitrum Stylus) will enhance the efficiency of Rollups and keep transaction costs within acceptable ranges.
– @FullNodeChuck
DeFi may enter the '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 expand. Projects like Ethena and Aave have already begun discussing or implementing fee mechanisms through proposals, enabling 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 relaxed regulatory environment and increased on-chain activity indicate that protocols may conduct buybacks and direct revenue distributions at higher frequencies.
– @ZackPokorny_
On-chain governance may rejuvenate in 2025, with applications attempting to adopt future governance models.
The total number of active voters in on-chain governance is expected to increase 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 in 2025. At that time, more applications will shift from traditional governance models to future governance models, enhancing voting diversity and optimizing governance outcomes.
– @ZackPokorny_
– @FullNodeChuck
– @hiroto_btc
The four major global custodians are expected to start providing 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 four major global custodians—BNY Mellon, State Street, JPMorgan, and Citibank—to launch digital asset custody services in 2025.
– @intangiblecoins
At least ten types of stablecoins supported by traditional finance are expected to be launched in 2025.
From 2021 to 2024, the stablecoin market has grown rapidly, with currently 202 projects, some of which have established close ties to 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 (approximately 1% annual growth) and Visa (approximately 7% annual growth). By 2024, stablecoins are gradually integrating into the global financial system. For example, U.S.-licensed FV Bank has supported direct stablecoin deposits, while Japan's three major banks are collaborating with SWIFT through the Pax program to enable faster and cheaper 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 also collaborating with stablecoin projects, actively positioning themselves in this field. With the regulatory environment becoming clearer, traditional financial institutions will further integrate stablecoins into their businesses to seize market opportunities and lay the groundwork for future development.
– JW
The total supply of stablecoins is expected to double in 2025, exceeding $400 billion.
The application of stablecoins in payments, remittances, and settlements is rapidly growing. As regulatory clarity around existing stablecoin issuers and traditional banks, trusts, and custodians becomes clearer, 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-bearing stablecoins.
Tether uses the income from its USDT reserves to fund its portfolio, while other stablecoin issuers and protocols attract users through revenue sharing, which will shift existing users from Tether to yield-based solutions. For example, the USDC rewards paid on Coinbase's 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 collateral assets to USDT holders and may even launch competitive yield 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 annual growth exceeding 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, fundraising in crypto venture capital has lagged behind broader crypto market trends, and a 'catch-up' phenomenon may occur in the coming quarters.
– @hiroto_btc, @intangiblecoins
Legislation for 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 USD-backed stablecoin supply will reinforce the global dominance of the USD and further promote the development of the U.S. Treasury market. Combined with the easing of restrictions on banks, trusts, and custodians, the adoption of stablecoins is expected to grow significantly. However, market structure legislation (such as registration, disclosure, and regulatory requirements for token issuers and exchanges, or adjustments to existing SEC and CFTC rules to cover these entities) is expected not to be completed and signed into law in 2025 due to its complexity.
– @intangiblecoins
The U.S. government is expected not to purchase Bitcoin in 2025.
The U.S. government is expected not to purchase Bitcoin in 2025 but may use existing reserves to establish inventory and promote discussions to expand Bitcoin reserve policies among government departments and agencies.
– @intangiblecoins
The U.S. Securities and Exchange Commission (SEC) is expected to investigate Prometheum.
Prometheum, a previously unknown broker, suddenly obtained a new broker-dealer license in 2023 and publicly supported SEC Chairman Gensler's views on the digital asset securities status, 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 executed any trades. Republicans have called for the DOJ and SEC to investigate whether Prometheum has 'links to China,' while others point out irregularities in its fundraising and financial reporting. Regardless of whether an investigation is conducted, the 'special purpose broker-dealer' license is expected to be abolished in 2025.
– @intangiblecoins
Dogecoin may break $1 for the first time in 2025, with a market value expected to reach $100 billion.
As the most well-known and historically significant memecoin, Dogecoin's market performance is expected to reach new heights in 2025. However, its market cap peak may be surpassed by budget cuts from the 'government efficiency department.' This department is expected to identify and successfully implement cuts exceeding Dogecoin's peak market cap in 2025.
– @intangiblecoins
Statement:
Members of Galaxy and/or Galaxy Research hold Bitcoin, Ethereum, and Dogecoin. Many forecasts have not been shared, and more forecasts could be proposed. These forecasts are not investment advice and do not constitute an offer, recommendation, or invitation to buy or sell any securities (including Galaxy securities). These forecasts only represent the views of the Galaxy Research team as of December 2024 and do not necessarily reflect the positions of Galaxy or any of its affiliates. These forecasts will not be updated.
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