Original title: 5 metrics to watch in 2025
Original author: Daren Matsuoka, a16z crypto partner
Original translation: Luffy, Foresight News
2024 is an exciting year in the history of the cryptocurrency industry. Cryptocurrency activity and usage reached all-time highs, blockchain infrastructure was significantly improved, transaction fees were reduced, stablecoins found product-market fit, the intersection of cryptocurrency and artificial intelligence became increasingly clear, Bitcoin and Ethereum ETFs were approved, and the legislative and regulatory environment has paved a positive path forward for the cryptocurrency industry. All these factors set the stage for another exciting year.
As we contemplate the next steps for cryptocurrency, here are five indicators we will closely monitor to track the ongoing progress of the industry.
Monthly active mobile wallet users
To initiate the next wave of cryptocurrency user growth, we need to make user experiences closer to Web2 applications. Mobile wallets will play a key role: hundreds of millions of 'passive' cryptocurrency holders (those who own cryptocurrency but do not frequently transact on-chain) could be converted into active users. To achieve this, developers need to continue creating new consumer applications, while consumers need wallets to participate.
Last month, the number of mobile wallet users hit 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 most challenging hurdles, as finding the right balance between security, privacy, and usability is not easy. However, since blockchain infrastructure is now capable of supporting hundreds of millions or even billions of people in on-chain operations, now is a great time to build the next generation of mobile wallets. In 2025, we will closely observe these developments.
You can track the number of monthly active mobile wallet users here.
Adjusted stablecoin trading volume
As infrastructure development significantly reduced transaction fees, stablecoin activity 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 store of value in countries with severe inflation. Stablecoins have become the lowest-cost method for dollar payments, and we expect more businesses to accept stablecoin payments.
With these favorable factors driving it, blockchain-based value settlement should continue to grow in 2025. While we can easily measure this transaction volume using on-chain data, it is difficult to separate the true usage of stablecoins. 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 straightforward method to showcase stablecoin usage while filtering out the impact of non-natural activities caused by bots and other human inflationary behaviors.
If the adoption of stablecoins—one of the most explicit use cases for cryptocurrencies—takes off in 2025, this indicator will be closely watched.
You can track stablecoin trading volume here.
ETF net inflows
Last year, the SEC approved Bitcoin and Ethereum ETFs. This is an important milestone that makes it easier for both individuals and institutional investors to access cryptocurrencies. However, it will take time to activate distributors, such as Goldman Sachs, JPMorgan, and Merrill, to incorporate these products into retail investor portfolios.
One way to measure ETF activity is through 'net inflows,' which represents the amount of Bitcoin or Ethereum flowing into or out of the ETF. (This excludes products like Grayscale Bitcoin Trust and Ethereum Trust that existed prior and eventually converted to ETFs.) So far, there have been net inflows of 515,000 Bitcoin ETFs and 611,000 Ethereum ETFs.
As more institutional investors seek to get involved in crypto assets, ETF net inflows should increase. By tracking the on-chain deposits and withdrawals from addresses identified as ETF custodians, we can monitor this data in real-time.
You can track ETF net inflows here and here.
Comparison of spot trading volume between decentralized exchanges and centralized exchanges
As users flock to the blockchain space, we expect the usage of decentralized exchanges (DEXs) in cryptocurrency trading to increase relative to centralized exchanges (CEXs). After all, the core premise of cryptocurrency is decentralized finance (DeFi). As the DeFi ecosystem develops, the share of spot trading on decentralized exchanges has steadily grown to about 11% over the past few years, and we expect this trend to continue in 2025.
Recently, as new users entered the field, the trading volume on Coinbase's Base chain and high-throughput chains like Solana surged, driving decentralized exchanges to record all-time high trading volume.
With more new consumer applications coming online, trading volume on decentralized exchanges may further increase.
This will be an important focus indicator as we monitor the balance changes between decentralized cryptocurrency activities and centralized cryptocurrency trading.
You can track the spot trading volume comparison between DEX and CEX here.
Total transaction fees on the blockchain
Total transaction fees (in USD) show the total demand for block space on a specific blockchain, which reflects real economic value.
However, this indicator has many nuances, as most projects are clearly working to reduce costs for users. That’s why it’s also important to consider unit transaction costs (i.e., the cost of a specific amount of blockchain resources). Ideally, overall demand (total transaction fees) grows, while gas fees (cost per unit resource used) 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 costs are much lower; sending USD stablecoins (USDC) on Ethereum costs about $5 in fees, while on Solana it is less than a penny. This is a significant milestone, and we will continue to monitor it.
Many ecosystems and their associated fee markets are maturing, making it 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 fee value in USD paid) may be the most important single indicator to track 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 cryptocurrency industry, but this year we will closely focus on these five indicators. With broader access channels for investors, mature infrastructure paving the way for new applications, and more popular products (such as stablecoins) emerging, the cryptocurrency industry is well-positioned to attract more users and developers. Let’s see what new achievements will occur this year that ultimately drive changes in these indicators.
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