Summary of the end of 2024 and outlook for crypto markets 2025

We leave behind an incredibly eventful 2024, which has proven to be one of the most significant years ever for the development of the crypto market, with crypto adoption accelerating at a very fast pace. Several of the largest crypto assets have shown significant value growth, driven by multiple key factors.  

Bitcoin, the world's largest crypto asset, surged approximately 121% during 2024, reaching a milestone long-awaited by the crypto market—bitcoin exceeded a value of $100,000 for the first time. At the same time, XRP experienced a price increase of around 235%, fueled by growing institutional interest and increased regulatory clarity, with the outcome of the U.S. presidential election being a crucial factor. Solana, which had a strong recovery in 2023 following earlier challenges, recorded an 86% increase during the year, reflecting both increased network usage, expanding use cases, and advancements in its technological development.  

On January 10, a historic milestone was reached when bitcoin ETFs in the U.S. were approved by the SEC, marking a an important milestone for the integration of crypto assets into the traditional financial sector. This allowed both U.S. institutional and private investors to invest in bitcoin through regulated investment channels. The approval was followed by net inflows totaling 380 billion SEK during the year, a clear signal of strong investor demand. In December alone, bitcoin ETFs accumulated three times more bitcoin than what was produced through mining during the month. In the summer, Ethereum ETFs were also approved in the U.S. market, leading to significant inflows after the U.S. presidential election on November 5. As a result of these regulatory advancements, other financial markets, including Hong Kong, Australia, and the United Kingdom, also approved various forms of crypto ETPs.   

Throughout the year, several of the world's largest asset managers took decisive steps to offer services related to crypto assets. For example, BlackRock launched its first bitcoin ETF following the January approval and quickly reported inflows exceeding $10 billion within the first two months.   

Institutional acceptance of crypto assets strengthened significantly during 2024, with a clear increase in the number of traditional financial players offering services related to crypto assets. At the same time, regulatory progress, particularly with MiCA in the EU, established a more stable regulatory foundation for future growth.  

The year also saw the bitcoin halving, where the block reward for miners was reduced from 6.25 to 3.125 bitcoin per ten minutes. This event is expected to further impact market balance by reducing the influx of new bitcoin, which has historically correlated with positive price trends.  

In summary, 2024 was characterized by both regulatory advancements and market successes, solidifying crypto assets as an increasingly integrated part of the global financial landscape. The year also cemented the role of institutions as a driving force behind the market's continued development, with a historic level of adoption from both investors and traditional financial players.  

Below, we list potential drivers for further adoption in 2025 and macroeconomic factors to consider.

Inflation

Global inflation is expected to remain a central factor for asset managers and investment advisors to consider in 2025 and beyond. Following several years of exceptionally low interest rates and aggressive monetary policy stimulus, inflation levels have gradually risen in many parts of the world. The new U.S. administration's economic agenda, which includes ambitious initiatives for economic growth, tax cuts, potential tariffs, and changes to immigration policies, may further contribute to inflationary pressures to varying degrees, depending on how these measures are implemented and received in the global market.

At the same time, uncertainty persists regarding the global energy market. Continued geopolitical instability in the Middle East, combined with potential production limitations and increased demand for fossil fuels, could result in rising energy prices. This, in turn, could trigger a chain reaction affecting production costs and consumption patterns, further amplifying global inflationary pressures.  

Against this backdrop, inflation protection is becoming an increasingly significant component of a well-balanced portfolio strategy for 2025. Assets traditionally considered inflation hedges—such as commodities, real estate, certain types of bonds, and now even bitcoin—may play a key role in preserving capital and ensuring stability in uncertain times. For investors, this underscores the importance of continuously reevaluating their strategies to navigate a rapidly changing economic landscape. Adaptability and a proactive approach will be crucial in addressing the challenges and opportunities posed by inflation.

US Bitcoin reserve

By 2025, Bitcoin has transitioned from being a niche investment to becoming a global geopolitical asset. Governments and central banks worldwide, from Washington to Zurich, are actively engaging in discussions about Bitcoin's potential role in national currency reserves.

Bitcoin is increasingly emerging as a potential complement to traditional reserve assets such as gold and the U.S. dollar. Once skeptical of its value, Donald Trump—soon to be the US persident again - has expressed a shifted stance, showing support for Bitcoin as a strategic asset. He has even proposed that the U.S. establish a Bitcoin reserve to bolster economic stability.

The incoming administration has argued that Bitcoin, as a potential inflation-hedging asset, could counteract the long-term effects of a weakened dollar. The proposal has sparked debate in Congress, where leading advocates like Senator Cynthia Lummis emphasize that Bitcoin’s limited supply makes it an ideal complement to national reserves.

Despite ongoing skepticism, particularly from Democratic factions, momentum for this proposal is strong. With Republicans set to control both the House of Representatives and the Senate, significant steps toward establishing a state-held Bitcoin reserve in the U.S. are expected in the coming year.

Switzerland, renowned for its neutrality and financial expertise, is now considering including Bitcoin in its national currency reserves alongside gold. A potential referendum could make Switzerland the first country to formally adopt Bitcoin as a reserve asset. Such a move would reflect Switzerland's tradition of financial innovation and independence, setting a historic precedent for other nations.

Meanwhile, discussions around Bitcoin’s role as a geopolitical asset continue to intensify beyond the U.S. and Switzerland. Countries such as Germany, Hong Kong, Brazil, and Poland are actively exploring the possibility of incorporating Bitcoin into their strategic asset portfolios, driven by their unique economic and political needs.

Structured and Actively Managed Products

The year 2024 witnessed unprecedented inflows into spot Bitcoin ETFs and ETPs, resulting in a global assets under management (AUM) of approximately $160 billion as of January 3, 2025. These regulated products have provided institutional investors with the opportunity to gain exposure to crypto assets within their portfolios.

This increased accessibility has led to more institutional players, such as hedge funds, pension managers, and financial advisors, increasingly viewing Bitcoin as a natural component of their portfolios, though this trend remains in its early stages.

In 2025, we anticipate that crypto assets will continue to mature as an asset class, with a growing share of institutional investors allocating capital—primarily to Bitcoin—through regulated products.

In response to the rising demand, a number of new structured derivatives and actively managed products are expected to be launched during the year. Players like Bitwise and Strive Asset Management have already filed for ETFs employing active management strategies for crypto assets in various forms.

It is highly likely that additional major players will introduce similar products throughout the year. This is expected to accelerate capital inflows but could also contribute to increased volatility during certain periods.

Tokenization

The tokenization of traditional assets such as real estate, government bonds, and commodities is emerging as one of the most prominent trends in crypto for 2025. By transforming these assets into digital representations, tokenization enables greater accessibility, enhanced liquidity, and improved efficiency in asset management.

Real-World Assets (RWAs) serve as a bridge between decentralized finance (DeFi) and traditional financial markets. This evolution is driven by attractive asset classes like U.S. Treasury bonds, growing institutional adoption, and favorable regulatory advancements. An example of this is BlackRock’s tokenized fund ‘BUIDL,’ illustrating how tokenization can reshape the financial sector. Moreover, blockchain-friendly policies could accelerate this adoption. In 2024, the value of tokenized assets on blockchain more than doubled, exceeding $50 billion.

According to a baseline forecast by McKinsey, the value of tokenized assets on blockchain could reach nearly $2 trillion by 2030. Ethereum currently dominates the market, accounting for over two-thirds of tokenized assets, with platforms like Avalanche and Solana posing as challengers. These platforms address critical needs such as scalability, regulatory compliance, and high performance.

Despite challenges like regulatory uncertainty and technical integration, RWAs have the potential to redefine asset ownership and unlock trillions of dollars in value while creating a seamless connection between traditional finance and blockchain technology.

Stablecoins

Stablecoins, digital assets pegged to stable assets like fiat currencies or commodities, are expected to play a critical role in the global economy in 2025. With their ability to offer price stability and seamless cross-border transfers, stablecoins continue to gain traction in both decentralized finance (DeFi) and traditional payment systems.

The total market capitalization of stablecoins has grown exponentially, surpassing $200 billion, and Bernstein predicts it will reach $500 billion by 2025. This growth is driven by increased usage for remittances, digital commerce, and the streamlining of global transactions. The issuance of Central Bank Digital Currencies (CBDCs) could also pave the way for a more regulated and stable market for stablecoins, creating opportunities for innovation and collaboration between private and public sectors.

USDC and Tether remain market leaders, but new entrants offering enhanced transparency and regulatory compliance could challenge their dominance. Ethereum continues to be the leading ecosystem for stablecoins, accounting for nearly two-thirds of total market capitalization for stablecoins. Ripple's (XRP) recently launched RLUSD could further disrupt the market with its focus on innovation and regulatory compliance.

Despite their success, stablecoins face regulatory challenges, particularly regarding AML/KYC requirements and cross-border frameworks. At the same time, innovative applications like stablecoin-based savings products and DeFi lending are driving further adoption.

As stablecoins integrate more deeply into the global financial infrastructure, they have the potential to reshape how money is managed, transferred, and utilized. 2025 may well mark the year when stablecoins become an indispensable component of both traditional and decentralized financial ecosystems.

Regulatory development

Despite having existed for over 15 years, bitcoin and the crypto market remains a young industry and is recognized as a new asset class. For emerging industries like AI and crypto, or the internet in its early days, innovation tends to move faster than the establishment of regulations. This can have downsides, as the crypto market has demonstrated on several occasions. In the absence of clear regulations, bad actors can establish themselves, ultimately harming end consumers. A notable example of this was the collapse of one of the world's largest crypto exchanges, FTX. Such events not only negatively impact development but also undermine trust in the industry, resulting in significant loss of trust.  

Historically, the United States has been a leader in adopting new technologies. However, the lack of clear regulatory frameworks for the crypto market has prevented the country from taking a similarly leading role in the crypto sector. The U.S. Securities and Exchange Commission (SEC) has long employed what is known as "regulation by enforcement," attempting to apply outdated securities laws to regulate the crypto market. This approach has caused frustration among many U.S.-based crypto companies. In Europe, crypto assets have been managed under general currency exchange and anti-money laundering laws—a broad framework that is not specifically tailored to crypto.  

In 2024 and 2025, we are now seeing regulations beginning to catch up. This is crucial for the industry to mature, gain broader societal acceptance, and integrate with the traditional financial market. In the EU, MiCA (Markets in Crypto Assets) is coming into force, meaning that crypto entities covered by this regulation will now be supervised by national financial authorities. MiCA can be viewed as the crypto market’s equivalent of MiFID II.  

In the U.S., for the first time, there is a crypto-friendly administration. Gary Gensler has announced his resignation as SEC Chair, and crypto-friendly Paul Autkins has been nominated as his successor. This is expected to lead to more favorable regulations for the crypto market, increased innovation, greater acceptance of crypto, and the potential approval of additional crypto ETFs for altcoins like Solana and XRP in the coming years.  

Overall, these regulatory frameworks could contribute to increased trust in the crypto market, better consumer protection, and faster adoption of crypto—both as a technological innovation and as an asset class.

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