Crypto Forecast 2025: What Do Major Institutions Say About Market Trends?

The article compiles views from major organizations such as Coinbase, Messari, Delphi Digital, Hashed, Presto, K33 Research, Flipside, and Korbit Exchange, in order to provide the best overview of:

• Major asset classes in the market such as BTC, ETH and SOL.
• Notable market niches such as DeFi, Stablecoin, and AI.

Most organizations are optimistic about the growth potential of the crypto market in the coming year. However, Solana may face some challenges in terms of both technical and market trends, especially after the explosion of the memento coin.

Bitcoin touches $160,000 - $200,0000

Bitcoin is predicted to reach between $160,000 (according to Korbit Exchange) to $210,000 (according to Presto Research) by 2025.

Meanwhile, reports from Messari and Coinbase do not give a specific figure on the price that BTC could reach, but remain optimistic about Bitcoin's growth potential.

The average actual value of BTC increases by an average of 5.3% per month

The forecast for Bitcoin to reach $210,000 by 2025 is based on the MVRV (Market Value/Realized Value) indicator. Since 2017, MVRV has fluctuated between 0.5x and 4.7x, with historical peaks at 4.7x (2017) and 4x (2021).

Current Realized Value ($722 billion) is forecast to grow an average of 5.3% per month thanks to the approval of spot ETFs, which are expected to reach $1,200 billion by the third quarter of 2025.

Assuming MVRV at a conservative 3.5x level, Bitcoin's market capitalization (Market Value) could reach $4,200 billion. Divided by the expected supply of 19,986,416 BTC, the price per Bitcoin would be around $210,000.

Positive impact from macro factors

In addition, qualitative factors are also expected to play a major driving role in driving Bitcoin prices in 2025, mainly coming from macro conditions rather than ecosystem development. Some of the factors worth noting include:

• New country, some companies belong to S&P 500 accept Bitcoin as a reserve asset.
• Capital inflows into ETFs are expected to continue at positive levels in 2025, especially as Grayscale's GBTC moves to positive net capital inflows. According to K33 Research, capital inflows into Bitcoin ETFs in 2025 will account for 2.5% of total global capital inflows into ETFs, and Bitcoin ETFs are expected to continue to outpace gold in 2025.
• The Fed's easing monetary policy, increased US government deficit spending, support from the crypto-friendly US Congress (especially the policy on the Strategic Bitcoin Reserve).

BTC Challenges & Pressures

However, Bitcoin's deployment and growth will also face a number of challenges and potential selling pressures, including:

• Core CPI inflation currently stands at 3.3%, well above the Fed's target, which could force the bank to readjust monetary policy if inflation continues to rise, putting pressure on risky assets such as Bitcoin.
• Legal barriers to implementing initiatives such as the Strategic Bitcoin Reserve could slow the pace of crypto legalization in the US, hindering the adoption and development of Bitcoin.
• The Mt. Gox Rehabilitation Trust, the recovery organization after the massive hack of the floor of Mt. Gox, is expected to complete the distribution of the remaining 40,000 BTC by October 2025. This is a large volume of Bitcoin and if the recipients liquidate immediately, will create selling pressure in the market.
• The US government currently holds a large amount of Bitcoin (208,000 BTC) from seizures during anti-crime campaigns, and if this government decides to sell part or all of this BTC, this will create considerable selling pressure, affecting the value of Bitcoin in the market.

Ethereum Rebounds, ETH/BTC Reaches 0.05

Ethereum has faced many challenges in the second half of 2024, especially as monolithic blockchains such as Solana attract attention due to their superiority in speed and simplicity.

Meanwhile, Ethereum still has to solve a number of significant problems, including:

• Asset fragmentation:Users have difficulty moving assets between Layer 2 solution(L2), since each L2 acts as a separate ecosystem, resulting in asset dispersion and reduced flexibility.
• Lack of proof systems:This limits the scalability and optimization of many L2 solutions, affecting Ethereum's performance and growth.

As a result, the ETH/BTC ratio has fallen to its lowest level (0.035) since 2021. However, with the long-term development roadmap and important upgrades being implemented, Ethereum is expected to rebound strongly in 2025, and the ETH/BTC ratio could return to 0.05.

What's driving ETH's recovery?

Unlike Bitcoin, Ethereum's recovery has been driven primarily by expectations for technical upgrades below, rather than macro factors such as ETFs.

Solve layer 2 arrays:

• ERC-7683 (Intenties): Allows users to specify trading intentions (intents) without concern for the technical details of each L2. For example, a user can perform a series of actions such as swapping tokens on L2, transferring assets to another chain, and participating in an administrative vote with just a single transaction.
• EIP-7702 (Account Abstraction):Allows regular wallets (EOA) to temporarily act as smart wallets, helping to optimize complex transactions.

Improving the experience through the Beam Chain Roadmap is a long-term improvement plan through 2029, focusing on:

Why is ETH ETF hard to compete with BTC ETF?

According to Coinbase, due to the high correlation of profits between Bitcoin and Ethereum, many traditional investors do not find Ethereum to offer a significant advantage over Bitcoin, causing interest in the ETH ETF to wane.

In addition, Bitcoin is often the first gateway for new investors to enter the crypto market, thanks to its higher brand identity and simpler investment model. This reduces the attraction of ETH towards categories that already have BTC.

As evidenced, out of a total of 354 ETH ETF 13-F Filers (ETH ETF participating financial institutions that filed SEC 13-F asset reports) as of September 30, 2024, only 43 Filers (financial institutions) did not hold BTC ETFs, and ETH ETF capital inflows for the last nearly 100 days held near zero.

Solana faces many difficulties in 2025

According to Presto, Solana now accounts for more than 50% of onchain daily trading volume, a figure quite similar to Ethereum in 2022. If compared under the same model, Solana could reach a capitalization equivalent to Ethereum by 2022, about $400 billion.

This means that the price of SOL can range between $800 and $1,000.

However, this is only a basic comparison. Considering the possibility of this scenario, Solana still faces many challenges, including technical challenges, the dominant trend driving this blockchain after the explosion of the memento coin, coupled with fierce competition from next-generation blockchains:

• Long SOL ETF Approval Time:Although the prospects for the SOL ETF being adopted in 2025 are quite positive, especially after the application from Trump, the approval process still takes quite a long time (almost a year). As a result, the SOL ETF will probably not make it through during the growth cycle in 2025.
• Inflation of Solana: It is forecast to remain high, exceeding 5.2% in 2025, while ETH and BTC have inflation below 1%. The level of burn from Solana's onchain operations is not enough to balance with network inflation, even if the blockchain attracts many transactions thanks to memenoin and AI.
• Memecoin Dominates Network Indicators:Solana relies heavily on the activity of memenoin to drive metrics such as trading fees, number of users, and trading volume on the DEX. However, this raises questions about the sustainability of these activities, since memenoin is often transient.
• Stablecoin market cap on Solana is low: It reached only $4.7 billion, significantly lower than the 2022 peak and minuscule compared to Ethereum ($103.7 billion). This is a major weakness, as stablecoins play an important role in maintaining sustainable liquidity on the chain.
• Not completely decentralized yet:Although the number validator Solana's holdings have grown, but 72% of them still receive support from the Solana Foundation's Authorization Program, and these validators account for 19% of the total SOL stake. This suggests a high degree of dependence on the central organization, which reduces true decentralization.
• The number of clients on Solana is limited:The Solana network depends on a limited number of clients, which reduces the resilience and sustainability of the network against risks. However, this is improving with the introduction of new clients such as Firedancer, Sig and Tinydancer (Solana's validator partners).
• Frequent interruptions:Solana focuses on performance and scalability, but this comes with higher technological risks, especially with incidents such as network outages in February 2024. Meanwhile in Ethereum, with its philosophy of prioritizing availability and fault tolerance, is preferred by organizations to build products that require a high level of security such as crypto assets.
• Emergence of new blockchains:Solana will face stiff competition from next-generation blockchains such as Sui, Aptos, Base and upcoming Monad. The Solana network does not have a blockchain ecosystem around it because of the lack of emphasis on developing Layer 2 solutions like Ethereum, which will create major challenges in maintaining position.

Stablecoin reaches $3,000 billion in capitalization

Stablecoins have seen significant growth in 2024, with market capitalization rising 48%, reaching $193 billion in early December.

Coinbase's prediction that the stablecoin market could reach $3,000 billion in the next five years, or 14% of the US's total M2 money supply ($21,000 billion), suggests a huge uptick from its current level of just 0.9%.

Stablecoins and payments are predicted to lead the next wave of adoption of cryptocurrencies thanks to their ability to offer faster, cheaper transactions than traditional methods, especially in digital payments and international money transfers.

In 2024, according to data from Visa, stablecoins processed $27,100 billion in transactions in 11 months, almost three times as much as in the same period last year, with huge growth in peer-to-peer (P2P) transactions and cross-border business (B2B) payments.

At the same time, stablecoins like USDC are increasingly being used due to regulatory compliance and integration with platforms such as Visa and Stripe. A significant milestone was Stripe's acquisition of Bridge, a stablecoin infrastructure company, for $1.1 billion, the largest ever in the cryptocurrency industry.

Revenue-sharing stablecoins could also be the driving trend of this market in 2025. Two models that stand out in this area include:

• Share revenue between stablecoin issuers (such as Paxos, M^0, Agora) with the application layer.
• Share revenue between stablecoin issuers (like Ethena with USDE) with end users.

DeFi will continue to thrive

DeFi will always be the mainstay of crypto and will continue to grow in 2025 because:

• Low interest rates: Reduced interest rates create a favorable environment for DeFi thanks to attractive returns and low cost of capital, attracting both retail and institutional investors looking for higher risk opportunities.
• Improving user experience (UX):DeFi has seen strong improvements in UX, including cryptocurrency wallets, bridges (on/off ramps), trading platforms, and trading bots integrated into Web2 platforms.
• Increasing acceptance:Backing from large institutions and changes in the legal regime especially in the US, can help DeFi grow, such as: Trump's World Liberty Financial is a financial project built on Aave. The project also recently established a strategic partnership with Ethena Labs.

According to forecasts from Coinbase, Delphi and Messari, DeFi in 2025 will see some key development trends as follows:

• Strong growth in DEX trading volume:It is forecast that the trading volume of DEX exchanges will account for 20-22% of the total trading volume of CEX spot by 2025. This occurs as investors move to look for higher risk assets, such as altcoins, memoins, and yield farming opportunities.
• Application of zKTLS in DeFi:The DeFi model will adopt zKTLS technology, which allows extracting web2 data privately. This technology opens up new development opportunities for DeFi, such as onchain credit scoring and identity verification.
• Modular DeFi Construction:Large DeFi projects will become liquidity hubs where other projects can build their own logic and applications. Good examples are Aave V4 and Uniswap V4, where these platforms provide liquidity and core services to other DeFi projects that develop on their platforms.
• Fee switch drives DeFi token growth: Fee switches could become an important factor driving the growth of DeFi tokens in 2025, as this model generates direct added value for tokens from the activities of the projects themselves.

AI x Crypto Will Still Be Noticed in 2025

Instead of DeFi being a long-standing market niche and always playing a significant role in crypto, AI x Crypto is an emerging market niche, which is expected to continue to grow strongly in 2025, following on from the boom of 2024.

According to forecasts from Messari and K33 Research, the market remains very noticeable, with AI Agents and AI Memecoins expected to account for the majority of capitalization in the entire AI x Crypto space.

At the same time, another potential market can be mentioned is AI Data (an important modular stack in AI). Blockchain can effectively unlock this data resource when it allows:

• Ownership and Origin Management:Ensure that the data contributor will maintain control and receive due recognition.
• Access security data:Allow sensitive datasets to be used securely without violating privacy.
• Mechanisms to encourage data sharing: Create transparent economic models to encourage data sharing.

According to Hashed, this data market will be worth more than $20,000 billion in subsequent years.

Data could become a potential area for growth in 2025, especially as the AI Agent market niche is expected to continue to expand. Data is the core factor for AI Agent to grow sustainably in the long term.

Moreover, according to analysis from modular stack, AI-enabled areas, such as computing power, have seen strong growth, with most projects in this sector capitalizing in the billions of dollars.

However, the data market is still relatively small, with the largest project, VANA, reaching just over $600 million.

In addition, some notable developments in the AI x Crypto market are:

• The decentralized AI model will focus development for each specific niche instead of developing a generalized AI model when this is the strength of centralized organizations such as OpenAI and Google.
• Dynamic TAO will be the driving force behind Bittensor in 2025. With Dynamic TAO, each subnet on Bittensor (including current and future subnets) will have its own token, which will be closely connected to the TAO token (Bittensor's native token).

Some other forecasts

Some forecasts belonging to many other market branches deserve attention such as:

• Circle/Ripple/Kraken will likely conduct an IPO in 2025 (Source: Presto Report).
• NFTs will rebound, with monthly trading volume reaching $2 billion (Source: Presto Report).
• Telegram bots will continue to be a major source of profit in 2025. These trading bots are especially popular with meme tokens and trading on DEXs above Solana (Source: Coinbase Report).
• The market is predicted to continue to grow on entertainment and sports rather than elections as in 2024 (Source: Coinbase Report).
• GameFi will focus on gameplay development, and on mobile, blockchain is just a support factor to differentiate itself from traditional games (Source: Messari Report).
• As legal regulations are clearer and assets are more tokenized, improving KYC and AML processes becomes important. On-chain identity authentication is essential, especially for assets that require investors to prove a financial position (Source: Coinbase Report).
• Ordals can get attention back in the form of airdrops for holders (Source: Messari Report).
• Base will grow remarkably when compared to other L2s (Source: Flipside Report).
• Asia will gradually be at the forefront of the 2025 blockchain wave (Source: Hashed Report).