As 2024 ends, the crypto industry starts to grade this year’s achievements and prepare for next year’s challenges. Blockchain analytics firm Nansen has shared key insights on the current market performance and the upcoming trends that could define the industry’s future in 2025.
2024 Set To End On A Positive Note
2024 marks one of the best years for the industry, with the approval and massive institutional demand of Bitcoin (BTC) and Ethereum (ETH) spot Exchange-Traded Funds (ETFs), BTC breaking past the $100,000 barrier, global integration and recognition of cryptocurrencies, and the apparent end of the regulatory crackdown in the US.
As a result, the crypto market has grown 124% year-to-date (YTD) to a market capitalization of $3.52 trillion, increasing around 60% just in Q4. Nansen’s latest Macro Market Report noted that the market’s post-election performance has seen a “shallow” consolidation and correction, with a “healthy” rotation across the tokens outperforming.
The recent corrections indicate that buyers have mostly been overpowering sellers since November 5. Moreover, the firm’s risk indicator turned neutral on November 16 after being “risk-on” since September 18, suggesting a less volatile performance in the coming weeks.
Nansen’s Principal Research Analyst, Aurelie Barthere, considers that December’s seasonality could be positive for crypto, making a significant correction for risk assets “somehow less likely” during this period.
The industry is expected to close the year positively, as the recently elected crypto-friendly US government continues to move toward a more favorable trend for the sector. Investors’ optimism and anticipation are growing.
Nonetheless, there will be a higher risk of substantial corrections in the weeks around and after the Trump administration takes office on January 20, 2025. The report notes that volatility could increase during this transition if policies are too slow to meet investors’ expectations.
What’s Next For The Crypto Industry?
Nansen also shared some insights on the potential mid-term and long-term trends that could affect the crypto market next year. The report pointed out that institutional adoption will be key to fueling the bull market in 2025, as it could represent “sticky, incremental demand for the asset class.”
The blockchain analytics firm predicts that institutional interest in listed crypto products will likely surge next year under a clear regulatory framework in the US, as some trends are already emerging or “well on the way.”
According to the report, Bitcoin could surge as part of the “default balanced asset allocation,” with institutional asset managers, pension funds, and buy-side investors possibly starting to integrate crypto into standard allocations in fear of continuing to “miss out” on BTC’s rally.
Additionally, partnerships like Cantor Fitzgerald’s $2 billion Bitcoin lending talks with Tether could highlight BTC’s growing role as collateral for DeFi and traditional financial lending mechanisms.
Similarly, the emergence of new derivative products and platforms, like BTC ETF options, and the tokenization of financial assets signal the increasing institutional participation and the efforts to integrate blockchain technology into traditional markets.
Lastly, advancements in stablecoin regulation “will likely clarify and encourage institutional adoption of tokenized fiat currencies in diverse applications.”
Nansen noted that the approval of the Solana (SOL) spot ETFs could also be part of the industry’s milestones in 2025, which could further open the doors for other crypto-based investment products.
Total crypto market capitalization is at $3.53 trillion in the one-week chart. Source: TOTAL on TradingView
