The entire virtual currency market is soaring towards 2025. Token prices are soaring, the next crypto-friendly president will be in office in the US, and institutional investors are investing at a sky-high pace.
According to a recent report from MatrixPort, more than 7.5% of the world's population has adopted cryptocurrencies, and that number is expected to rise to more than 8% by 2025. The Web3 DeFi platform has made it easier than ever to download a cryptocurrency wallet and participate in the digital economy. .
2025 will be a big year for the entire cryptocurrency market and the blockchain technology that supports it. Ethereum and Solana blockchains, in conjunction with BSC and Polygon, are finding use cases in DeFi, healthcare, and supply chain management that can take the digital economy to a whole new level.
There are several key drivers that are likely to transform the digital economy in the year ahead.
Institutional investment and implementation
BlackRock's IBIT ETF has become the fastest growing ETF in history, increasing assets by 38% as of November 10, 2024, reaching $41 billion in assets under management in just 11 months. As you can see in this Bitcoin ETF net flow trend chart by CryptoQuant, we see a trend of large inflows coinciding with the launch of new BTC ETFs and options.
In a recent interview with Benzinga, Binance CEO Richard Teng spoke about the influx of cryptocurrencies due to regulatory clarity and the launch of a Bitcoin ETF. Net inflows into Bitcoin ETFs have already exceeded net inflows into gold ETFs in less than a year, proving massive reserve demand. ”
“We are seeing a significant increase in institutional interest this year, with sovereign wealth funds and pension funds starting to allocate Bitcoin reserves,” Teng added. This is a big plus for the industry heading into 2025. ”
New investment products are bringing traditional investors to the crypto table. In the third quarter of 2024, prominent hedge funds such as Millennium Management, Capra Management, and Tudor Investments all publicly declared their support for cryptocurrencies. Industry leaders see the continued integration of cryptocurrencies into traditional financial markets as a growth engine for retail and institutional investors alike.
Regulatory bodies are also beginning to move towards the adoption of cryptocurrencies. With an incoming crypto-friendly president at the helm of the White House, institutional investment could rise to a new level. President-elect Trump has already promised to turn the United States into the crypto capital of the world, with analysts predicting everything from a national Bitcoin reserve to a full-fledged digital economy. Both will have a significant positive impact on the current cryptocurrency market.
The companies themselves see the value of Bitcoin as a hedge against the US dollar, British pound, or euro. Cash reserves are often backed up by tokenized reserves in various cryptocurrencies to weather unexpected financial storms such as runaway inflation or the devaluation of the dollar or euro.
Advances in blockchain technology
The blockchain technology that underpins crypto tokens has taken on a life of its own. Blockchain technology is now the foundation for everything from supply chain management and healthcare to complete financial services for the world's poor.
Traditional banking institutions and government voting systems are also moving onto blockchain. Ethereum, Solana, BSC, Polygon, and others have helped reshape Web3 and provide the infrastructure for dApps for DeFi, enterprise logistics, and entertainment.
Ethereum is the foundation of Web3, but it needs to be faster and solve some congestion issues before we can build the world on it. At the moment, Ethereum's time, variable fees, and energy consumption are major concerns.
Blockchain needs to work quickly and smoothly for mass adoption, but there are still issues that need to be fixed. Its solution and seamless cross-chain compatibility are key to mass adoption and overall boost of the cryptocurrency market. Look out for 2025.
Global remittances and financial inclusion
The poor may become the biggest proponents of cryptocurrencies. Unbanked and unbanked people in third world countries and closer to home regions are turning to cryptocurrency wallets to overcome the high fees of global money transfer services. Where previously they had to transfer cash through agents and pay huge fees, the world's poorest people can now share resources with their mobile phones and crypto wallets.
Cryptocurrencies are designed to eliminate intermediaries, and there are now mass education programs and specific platforms for people who want to lend and borrow money between family and friends. Celo is a mobile-first app for sending small amounts of money around the world as easily as an SMS. This simplification of blockchain and crypto wallets opens financial inclusion to the poor and decentralized alternatives to the current archaic banking system. From simple beginnings of sending food to relatives, the poorest people on earth now have access to a system to save, lend, borrow, and invest.
Mass adoption on a global scale will change the face of the virtual currency market. And the poorest countries on earth could be the driving force.
Increased adoption in retail stores
The general public is becoming increasingly familiar with cryptocurrencies, and increasing adoption in retail stores will likely add gasoline to the crypto fire. That's starting to happen with Microsoft, Tesla, Newegg, and now Ferrari and Shopify all accepting cryptocurrencies as payment.
In the US, you can pay for AMC theater tickets or Sheetz grocery bills with cryptocurrencies. In the UK, Shopify, Whole Foods and Philipp Plein have opened their doors to cryptocurrency payments.
Stores can easily integrate cryptocurrency payments, and more and more stores are doing so, making Bitcoin and other mainstream tokens a viable means of paying for goods and as an investment tool. Retail adoption will prove to be a major driver in 2025.
Cryptocurrency wallets linked to fiat debit cards like the Mastercard-Baanx-Ledger card already exist, but they are still intermediate facilities that off-ramp cryptocurrencies to fiat on an ad-hoc basis.
