A recent research report from Citi has highlighted the growing adoption of stablecoins and cryptocurrency exchange-traded funds (ETFs) as key drivers of digital asset performance in 2025. According to the report, published on December 26, the continued growth of these metrics will propel the crypto market forward next year.
Adoption: The Key to Long-Term Performance
The Citi research team emphasizes that adoption is the most critical concept to track for long-term digital asset performance. They note that ETF activity and broader volumes are improving, while stablecoin market caps are rapidly increasing. This growth in adoption has been particularly pronounced since the US presidential election in November.
ETF Inflows: A Key Metric to Watch
The report highlights crypto ETF inflows as one of the most important metrics to monitor. These inflows are more likely than other trading activity to be new funds or market participants entering the crypto space, and they have a significant impact on price performance, particularly for Bitcoin (BTC). In 2024, BTC ETF inflows accounted for approximately 46% of the variance in BTC price action, with a beta that shows $1 billion of inflows leading to around 4.7% returns.
The Breakthrough of $100 Billion in Net Assets
On November 21, US Bitcoin ETFs broke through the milestone of $100 billion in net assets for the first time, according to data from Bloomberg Intelligence. This development marks a significant turning point for the crypto market and sets the stage for continued growth.
Positive Demand Shocks: A Catalyst for Price Growth
Asset manager Sygnum Bank has suggested that surging institutional inflows could cause positive "demand shocks" for Bitcoin, potentially driving its price upwards in 2025. This concept of demand shocks is particularly relevant given the current market trends and the growing interest in digital assets.
Onchain Activity: A Key Performance Driver
Onchain activity has also accelerated, particularly for stablecoins. The combined market capitalizations of the top three stablecoins – Tether’s USDt (USDT), USD Coin (USDC), and Dai (DAI) – collectively grew by more than $25 billion after Trump’s election win. This growth is particularly bullish for decentralized finance (DeFi), as stablecoins serve as an on-ramp to DeFi.
Onchain Growth Metrics
Other measures of onchain growth are also outperforming, including:
- Activity on the Ethereum network, including layer-2 scaling chains, up 210% versus 2023 averages
- An increase in the number of large and small crypto wallets since the November US election
Implications for Digital Asset Performance
The continued growth of stablecoin market capitalizations and onchain activity is expected to propel digital asset performance in 2025. As more investors enter the market, demand for digital assets will continue to rise, driving prices upwards.
Conclusion
In conclusion, the Citi research report highlights the growing adoption of stablecoins and crypto ETFs as key drivers of digital asset performance in 2025. With continued growth in ETF inflows, onchain activity, and stablecoin market capitalizations, the stage is set for a strong year ahead for the crypto market.
References
- Citi Research Report (December 26)
- Bloomberg Intelligence
- Sygnum Bank
Related Articles
- "2025 ‘Demand Shocks’ Will Spike Bitcoin’s Price – Sygnum"
- "Crypto ETF Inflows"
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