a16z has listed 5 cryptocurrency industry data indicators to watch closely in 2025.
Written by: Daren Matsuoka, a16z crypto partner
Compiled by: Luffy, Foresight News
2024 is an exciting year in the history of cryptocurrency development. The activity and usage of cryptocurrencies have reached historic highs, blockchain infrastructure has greatly improved, transaction fees have decreased, stablecoins have found product-market fit, and the intersection of cryptocurrency and artificial intelligence has become increasingly clear, with Bitcoin and Ethereum ETFs approved. The legislative and regulatory environment has also opened a positive path forward for the cryptocurrency industry. All of this lays the groundwork for another exciting year.
As we think about the next steps in cryptocurrency development, here are five indicators we will closely monitor to track the ongoing progress of the industry.
Monthly Mobile Wallet Users
To unlock the next wave of cryptocurrency user growth, we need to make the user experience closer to Web2 applications. Mobile wallets will play a key role: hundreds of millions of 'passive' cryptocurrency holders (those who own cryptocurrency but rarely engage in on-chain transactions) might convert to active users. To achieve this, developers need to continue creating new consumer applications, and consumers need wallets to participate.
Last month, the number of mobile wallet users reached an all-time high, surpassing 35 million for the first time. This growth is attributed to the increase in users of well-known wallets like Coinbase Wallet, MetaMask, and Trust Wallet, as well as the contributions of some new entrants like Phantom and World App.
For developers, consumer wallets present some of the industry's toughest challenges, as finding the right balance between security, privacy, and usability is not easy. But now that blockchain infrastructure can support hundreds of millions or even billions of users performing on-chain operations, it is an excellent time to build the next generation of mobile wallets. In 2025, we will closely monitor these developments.
You can track the number of monthly mobile wallet users here.
Adjusted Stablecoin Trading Volume
With the development of infrastructure significantly reducing trading costs, the activity of stablecoins has increased in 2024. Notably, stablecoins are not only used for cryptocurrency trading but also for cross-border payments and remittances, purchasing goods and services, and as a means of value storage in countries with severe inflation. Stablecoins have already become the lowest-cost method of dollar payments for transfers, and we expect more and more businesses to accept stablecoin payments.
With these favorable factors driving growth, blockchain-based value settlement should continue to expand in 2025. While we can easily measure this transaction volume using on-chain data, separating the true usage of stablecoins can be challenging. Transactions can be initiated manually by end-users or automatically by bots, and some of these on-chain transactions do not resemble traditional settlement methods.
Fortunately, Visa has created a clear and simple method to showcase the usage of stablecoins while filtering out non-natural activities caused by bots and other human inflation.
If the adoption of stablecoins — one of the most clear applications of cryptocurrency — takes off in 2025, this indicator will be closely watched.
You can track stablecoin trading volume here.
ETF Net Inflow
Last year, the U.S. Securities and Exchange Commission approved Bitcoin and Ethereum ETFs. This is a significant milestone that makes it easier for individual and institutional investors to access cryptocurrencies. However, it will take time to activate distributors like Goldman Sachs, JPMorgan, and Merrill Lynch to incorporate these products into retail investors' portfolios.
One way to measure ETF activity is through 'net inflow of funds,' which represents the amount of Bitcoin or Ethereum flowing into or out of the ETF. (Excluding products like Grayscale Bitcoin Trust and Ethereum Trust that existed prior and eventually converted to ETFs.) So far, Bitcoin ETFs have seen a net inflow of 515,000 units, while Ethereum ETFs have seen a net inflow of 611,000 units.
As more institutional investors seek to enter the crypto asset space, ETF net inflow should increase. By tracking on-chain deposits and withdrawals from addresses identified as ETF custodians, we can monitor this data in real-time.
You can track ETF net inflow here and here.
Spot Trading Volume Comparison Between Decentralized and Centralized Exchanges
As users flock to the blockchain space, we expect the usage of decentralized exchanges (DEX) in cryptocurrency trading to increase relative to centralized exchanges (CEX). After all, the core premise of cryptocurrency is decentralized finance (DeFi). With the growth of the DeFi ecosystem, the spot trading share of decentralized exchanges has steadily increased to about 11% over the past few years, and we expect this trend to continue in 2025.
Recently, with new users entering the space, the trading volume on Coinbase's Base chain and high-throughput chains like Solana surged, driving decentralized exchange trading volume to historic highs.
As more new consumer applications go live, trading volume on decentralized exchanges may continue to grow.
As we monitor the balance changes between decentralized crypto-native activities and centralized cryptocurrency trading, this will be an important focus indicator.
You can track the spot trading volume comparison between DEX and CEX here.
Total Blockchain Transaction Fees
Total transaction fees (in USD) reflect the overall demand for block space on a specific blockchain, indicating real economic value.
However, this indicator has many subtleties, as most projects are clearly working to lower costs for users. This is why it is also important to consider unit transaction costs (i.e., the cost of a specific quantity of blockchain resources). Ideally, overall demand (total transaction fees) grows, but gas fees (cost per unit of resource usage) remain low.
In November 2024, Solana's fees surpassed Ethereum for the first time ever (see below). Notably, this milestone occurred even though Solana's unit transaction cost is much lower; sending a dollar stablecoin (USDC) on Ethereum costs about $5, while sending it on Solana costs less than 1 cent. This is a significant milestone that we will continue to monitor.
Many ecosystems and their associated fee markets are maturing, making this a good time to start measuring the economic value facilitated by various blockchains. In the long run, the demand for block space (measured by the total dollar value of fees paid) may be the most important single indicator of the progress of the cryptocurrency industry. Why? It reflects the level of participation in valuable economic activities and the willingness of users to pay for it.
You can track the demand for block space through transaction fees here.
Summary
We have tracked multiple indicators in the crypto industry, but this year we will closely watch these five indicators. With investor access channels widening, mature infrastructure paving the way for new applications, and more popular products like stablecoins emerging, the cryptocurrency industry is well-positioned to attract more users and developers. Let's see what new developments emerge this year that ultimately drive changes in these indicators.
