Cryptocurrencies Poised for Continued Momentum in 2025
Cryptocurrencies have had a significant year in 2024, with the total market cap increasing by over 90%. Analysts at Citi Research say that the momentum is likely to continue into 2025, driven by the launch of spot and ETFs, which saw net inflows of $36.4 billion and $2.4 billion respectively.
The incoming Trump administration is seen as being crypto-friendly, with a potential shift from enforcement-focused regulation to a more legislative-based approach. This could reduce uncertainty for investors and issuers. The administration has already shown a willingness to step away from the previous anti-crypto stance and has nominated crypto-friendly Paul Atkins to replace SEC head Gary Gensler.
However, the regulatory environment is still uncertain, and the impact of the Trump administration’s policies remains to be seen. Citi says that the regulatory framework will be a key determinant of adoption, and increased transparency on regulation could bring other cryptocurrencies into the spotlight.
Despite the optimism, Citi warns that macroeconomic factors could disrupt the narrative, with policy uncertainty threatening to spark volatility in risk assets. The analyst’s note that the total value locked in decentralized finance and on-chain metrics will be key measures to monitor in 2025.