Crypto Market Factors That Could See Continued Growth in 2025

The entire crypto market is
riding high as we head into 2025. Token prices are heading skywards, a
crypto-friendly President-elect has been
chosen to take power in the
US and institutional investment is heading through the roof.

More than 7.5% of the world
population has adopted cryptocurrencies, according to a recent report
by MatrixPort, with that figure expected to exceed 8% by 2025. Web3 DeFi
platforms are making it easier than ever to download a crypto wallet and join
the digital economy.

2025 is set to
be a big year for the crypto market as a whole, along with the blockchain
technology that underpins it. Ethereum and Solana blockchains, together
with BSC and Polygon, are finding
use cases in DeFi, healthcare, and supply chain management that can take
the digital economy to an entirely new level.

There are several key drivers
that could change the digital economy in the year ahead, including:

Institutional Investment and
Adoption

BlackRock’s IBIT ETF has
become the fastest-growing ETF in history, with a 38% increase in assets under management as of Nov. 10, 2024 and $41 billion in assets under
management in just 11 months. There is a massive inflows trend that
coincides with new BTC ETF’s and options launched as you can see from this
Bitcoin ETF netflow trends chart by CryptoQuant.

In a recent interview
with Benzinga, Binance CEO Richard Teng discussed crypto inflows from
regulatory clarity and the launch of Bitcoin ETFs, “Earlier this year, we saw
Bitcoin ETFs approved in the U.S. and globally, from Brazil to Hong Kong and
Australia. The net inflow into Bitcoin ETFs has already surpassed that of gold
ETFs within a year, demonstrating the immense pent-up demand.”

Teng continued, “This year, we’ve seen a significant
uptick in institutional interest, with sovereign wealth funds and pension funds
beginning to allocate Bitcoin reserves. This is a major positive for the
industry as we move into 2025.”

New investment products are
bringing traditional investors to the crypto table. During the third quarter of
2024, prominent hedge funds such as Millennium Management, Capula Management,
and Tudor Investment all publicly declared their support for crypto. Industry
leaders see the continued integration of crypto into traditional financial
markets as a growth engine for retail and institutional investors alike.

Regulatory bodies are starting
to move towards crypto adoption as well. With a crypto-friendly President-elect
taking charge at the White House, that institutional investment could go to
another level. President-elect Trump has
already promised to turn the USA into the crypto capital of the world, and
analysts are predicting everything from a national Bitcoin reserve to a full-blown digital economy. Either one would
have a profound positive effect on the current crypto market.

Companies themselves see the
value in Bitcoin as a hedge against the US dollar, UK Pound, or
Euro. Often, cash reserves are also backed up with tokenized reserves
in a variety of cryptocurrencies to help weather any unexpected
financial storm like runaway inflation or a devaluation of the dollar or
Euro.

Blockchain Technology Marches
Forward

The blockchain technology that
underpins the crypto tokens has taken on a life of its own. Now, blockchain
technology is the foundation for everything from supply chain management and
healthcare to full financial services for the world’s
poor.

Even traditional banking
institutions and government voting systems are hitting the blockchain.
Ethereum, Solana, BSC, Polygon, and more have
helped to reshape Web3 and provide the infrastructure for dApps for DeFi,
corporate logistics, and entertainment.

Ethereum is the bedrock of
Web3, but it needs to get faster and solve some congestion issues before it can
build the world. Right now, the time, variable fees, and energy
consumption of Ethereum are real concerns.

Blockchain needs to work
instantly and smoothly for mass adoption, and there are still
issues that need fixing. The solutions to that and seamless
cross-chain compatibility are the keys to mass adoption and an overall boost
for the crypto market. So, look out for them in 2025.

Global Remittances and Financial
Inclusion

The poor could yet turn into
the greatest driver for cryptocurrencies. The unbanked and underbanked people
in Third World nations and much closer to home are turning to crypto wallets to
beat the high charges on global remittance services. Whereas before, they had
to send cash via agents and accept massive fees, the world’s poorest can now
share resources with a mobile phone and a crypto wallet.

Crypto was
designed to cut out the middleman, and now there is a mass education
program and specific platforms for people who want to borrow and lend money
between family and friends. Celo is a mobile-first app aimed at small
global remittances, which are as easy to send as an SMS. This simplification of
the blockchain and crypto wallets opens up financial inclusion for
the poor and a decentralized alternative to the current archaic banking system.
From simple beginnings, sending food money to a relative, the poorest
people on Earth have access to a system to save, lend, borrow, and invest.

Mass adoption on a global
scale would change the face of the crypto market. And the poorest nations on
Earth could yet be the driving force.

Increased Retail Adoption

The general public is getting
more comfortable with crypto, and increased retail adoption will pour gasoline
on the fire that is cryptocurrencies. That’s starting to happen with
Microsoft, Tesla, Newegg, and now Ferrari and Shopify all accepting
crypto as payment.

In the United States, you
can pay your AMC Theater tickets and Sheetz grocery bills with crypto. In
the UK, Shopify, Whole Foods, and Philipp Plein have opened the door to
crypto payments.

Shops can easily integrate
crypto payments, and an increasing number of them are, making Bitcoin
and other mainstream tokens a viable way to pay for goods and an investment
tool. Retail adoption will prove to be a major driver in 2025.

There are already crypto
wallets linked to fiat currency debit cards like the Mastercard-Baanx-Ledger
card, but this is still a halfway house that offramps crypto into fiat currency
on an ad-hoc basis.

This article was written by FL Contributors at www.forexlive.com.