Citi analysts predict that 2025 will be a transformative year for cryptocurrencies, driven by the growth of ETFs, adoption of stablecoins, and a more supportive regulatory environment. In 2024, the cryptocurrency market saw a surge in value with the launch of Bitcoin spot ETFs and positive economic policies. Donald Trump's victory in the presidential election generated optimism for digital assets, leading to Bitcoin reaching $100,000 for the first time. The total cryptocurrency market cap reached $3.4 trillion, almost double its value from the previous year. The Citi analysts believe that high-risk trades will continue through early 2025, but there may be increased uncertainty later in the year. The launch of Bitcoin and Ethereum spot ETFs has made trading cryptocurrencies easier, with significant inflows into these funds. The role of cryptocurrencies in diverse portfolios has been noted, but the high volatility of crypto assets requires higher returns to justify the risk. Stablecoins are gaining momentum, and their increasing use could spur adoption of decentralized finance. Digital asset adoption needs to grow for the crypto rally to continue, and the analysts are monitoring economic instability in countries like Turkey, Argentina, and Venezuela. The analysts expect regulatory clarity under Trump's administration, but not full deregulation. The focus will be on a more legislative-based approach to regulation.



Other News from Today