No one can argue that 2024 will be a decisive year for cryptocurrencies. BTC and ETH ETFs were launched, BlackRock led bitcoin adoption, a pro-crypto president was elected, and BTC surpassed a 15-year all-time high, to name a few. But the turning point for cryptocurrencies still awaits. Here are three predictions for 2025 that can help trigger it:
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1. DeFi is about to skyrocket
DeFi is becoming more complex, as is traditional finance, in terms of its product set. We have already seen this trend emerge with the adoption of products such as Pendle, Ethena, EtherFi and Lombard. In 2025, DeFi usage will skyrocket, with a wave of adoption of products such as options, swaps and other derivatives such as the interest rate swap market; the latter’s market size is $465.9 billion on TradFi.
Additionally, new institutional players are entering the crypto ecosystem, fueling a new category: on-chain finance. Participation is no longer limited to purchasing top cryptocurrencies such as BTC and ETH. These market participants are also actively expanding on-chain market depth by using tools such as lending markets and providing liquidity with RWA-backed digital assets, i.e. stablecoins. Securitize and BlackRock are great examples of companies that are pushing the envelope on this front.
DeFi is almost back to its all-time high, Source: https://defillama.com/
2. Stablecoins will continue to grow as the killer crypto use case
Stablecoins are not just another crypto product; are poised to become the digital backbone of the global financial system. Tether is the most profitable crypto company with a profit of $5.2 billion in the first half of 2024, surpassing BlackRock.
The political landscape is changing dramatically in favor of stablecoins, with Operation Choke Point 2.0 coming to an end. They are finally being seen as a national asset that can strengthen the dominance of the US dollar and address growing public debt. This shift also paves the way for major banks and payments companies like Visa and Mastercard to expand their efforts in the sector, especially considering Stripe’s $1.1 billion acquisition of stablecoin platform Bridge (the largest cryptocurrency acquisition in history) and rumors about the launch of Revolut. your stablecoin.
Stablecoins market capitalization is at an all-time high, around $200 billion, Source: https://defillama.com/stablecoins
3. The race for retail adoption
ETFs will be key drivers for new capital to enter cryptocurrencies. BTC ETFs are here and we will soon see the success of Ethereum ETFs. After SOL’s undeniable growth over the past year, the SOL ETF will pick up the momentum and become a reality in the first half of 2025 or be delayed until 2026 or later.
We will also see major Web3 social platforms compete with the mainnet launch of LensChain and the further expansion of Farcaster. As the pie grows, we may end up with the “Twitter/X and Facebook of cryptocurrencies” platforms.
In particular, “Super Wallets” took off in the fourth quarter of 2024. They aim to offer a comprehensive alternative to centralized exchanges for new users. The main players are Infinex, launched by Kain Warwick, and DeFiApp, launched by experienced DeFi developers. They’re both working on UX problems, something we’ve never done very well as an industry.
Additional Prediction: MiCA Will Drive Crypto Expansion in Europe
Crypto regulations provide the foundation for new projects. They lay the foundation for clear rules and guidelines for the organizational structure. MiCA (Markets in Crypto Assets Regulation) attempts to achieve precisely that with the aim of increasing the importance of EUR-related assets. This could potentially bridge crypto innovation between the US and Europe.
