2025 Could Be a Pivotal Year for Crypto, Citi Says, Citing ETFs, Stablecoins, and Trump's Election

Analysts at Citi said 2025 could be a pivotal year for digital assets, citing multiple factors that will power this market. Some of the strong catalysts include the growing adoption of stablecoins to make the DeFi markets stronger and the expansion of crypto ETFs, which create easier access and more institutional exposure in the space.

Citi analysts are optimistic about 2025 for digital assets, highlighting several factors expected to drive market growth. Stablecoin adoption is a key catalyst, with the combined market capitalization of Tether (USDT), USD Coin (USDC), and Dai (DAI) increasing by over $25 billion following the 2024 U.S. presidential election. Citi views stablecoins as a primary driver for decentralized finance (DeFi), noting that “stablecoins are the on-ramp to decentralized finance.”

As stablecoin usage expands, more participants are likely to enter DeFi applications, which use these assets for lending, borrowing, and other financial services. The rapid rise in Ethereum network activity, including layer-2 scaling solutions, has also bolstered this growth, with on-chain activity up by 210% compared to 2023 levels.

Another pivotal factor, according to Citi analysts, is the election of Donald Trump as U.S. President-elect. His stance on the industry, particularly support for pro-crypto officials, is massively considered one major optimism factor among investors for their support. This will also increase crypto-friendly policies initiated during his administration and involve appointments of key heads within key agencies, such as the head of the Securities and Exchange Commission, Paul Atkins.

Crypto prices, including Bitcoin, reaching an unprecedented valuation of $100,000 for the first time in history, jumped immediately after the victory of Trump in November 2024. A conducive regulatory framework coupled with growing involvement by institutions could lead to a “demand shock” for Bitcoin, pushing up its price even further into the next few years.

Citi analysts added that, although the outlook for 2025 remains upbeat, sustained growth would depend on broad-based adoption. They note countries such as Turkey, Argentina, and Venezuela, which face economic instability and thus increased demand for digital assets, as the countries to keep an eye on. However, they warned that ongoing regulatory development may also play a very important role in deciding the fate of the market.

Citi believes the regulatory environment under the administration of Trump is set to become clearer. A move from regulation by enforcement to one more legislative-based might mean much-needed stability to lure even more institutional capital and retail investors into the sector.