• Citi Research has predicted that crypto ETFs will drive a market rally next year.
• Stablecoin adoption beyond payments could also push the market higher.
• In 2024, BTC and ETH ETFs resulted in total crypto market valuation soaring 90%.

The adoption of cryptocurrencies in 2025 is expected to be largely driven by stablecoins and digital asset exchange-traded funds (ETFs), as reported by Citi Research, the research arm of leading financial institution Citi. Following Bitcoin’s milestone hit of $108K earlier this month, the firm expects better performance in the upcoming year.  

In its analysis, Citi Research noted that 2024 has been an exciting year for cryptocurrencies as the total market cap of digital assets surged by 90%, reaching a peak of $3.73 trillion. Further, the firm noted that the exponential growth was also due to the inflows from spot Bitcoin and Ethereum ETFs, which were approved earlier this year by the United States Securities and Exchange Commission (SEC). 

As seen in the chart above, the total crypto market cap’s weekly chart suggests that, in the long run, the market would remain bullish with the Relative Strength Index (RSI) reading a value of 64.25. Further, the RSI shows that the market is correcting after being overbought for a long time. 

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On the other hand, the MACD indicator supports the bullish outlook, confirming that the buyers are still in control in the longer time frame, with the signal line (red) remaining below the MACD line (blue) and the MACD histogram in green, suggesting a positive momentum. 

Stablecoin Adoption

The Citi Research report added that the crypto ETFs have been the “most significant driver of crypto returns” and are expected to continue in the forthcoming year. Further, the report suggests that adopting stablecoin beyond crypto trading could enhance decentralized finance (DeFi) and increase broader engagement in the sector.

As per CoinMarketCap data, the current total market cap of stablecoins stands at a massive $213 billion, while the total capital trading volume stands at a whopping $115.7 billion in the industry. 

Additionally, the Citi analysts also predicted a shift in cryptocurrency regulation. The report added that market participants would expect a transition from the current regulation by enforcement tactics to a more legislative-based approach under the new administration of Donald Trump.