A recent research note from Steno Research has sparked optimism in the cryptocurrency market, predicting that 2025 will be a record-breaking year for Bitcoin (BTC) and Ether (ETH). According to the report, both BTC and ETH are expected to surpass all-time highs, with BTC reaching $150,000 and ETH hitting $8,000.
Unprecedented Favorable Regulatory Environment
The analysts at Steno Research attribute this bullish outlook to several factors, including an "unprecedentedly favorable regulatory environment for cryptocurrencies." This is a significant shift from previous years, where regulatory uncertainty has often plagued the industry. With a supportive macroeconomic climate marked by declining interest rates and improved liquidity, the conditions are ripe for a surge in cryptocurrency prices.
Historically Strong Post-Bitcoin-Halving Performance
Another key factor contributing to Steno’s optimistic forecast is the historically strong post-Bitcoin-halving performance. The Bitcoin halving event, which occurs approximately every four years, has consistently led to significant price increases in the past. With the next halving event scheduled for 2025, investors are eagerly anticipating a repeat of history.
Institutional Adoption Reaches New Heights
Steno’s research also highlights the growing trend of institutional adoption in the cryptocurrency market. According to the report, "institutional adoption is expected to reach unparalleled levels" in 2025, with significant inflows into U.S.-based Bitcoin and Ethereum ETFs (Exchange-Traded Funds). This increased involvement from institutional investors will likely contribute to a surge in demand for BTC and ETH.
Net Inflows Expected in 2025
The analysts at Steno Research predict that BTC and ETH ETFs will see net inflows of $48 billion and $28.5 billion, respectively, in 2025. This influx of capital will likely drive up prices and further increase demand for these cryptocurrencies.
Ether Poised to Outperform Bitcoin
According to the report, Ether is expected to perform especially well in 2025, significantly outperforming Bitcoin. The ETH/BTC ratio is predicted to hit at least 0.06, nearly double the current level of around 0.035. This will usher in a broader alternative cryptocurrency (altcoin) season in 2025.
Altcoin Season on the Horizon
The rising popularity of altcoins, such as Solana and Ethereum, is expected to continue in 2025. Steno’s prediction is partly based on the argument that Donald Trump’s U.S. presidential victory is more favorable for altcoins than for Bitcoin. Trump’s presidency encourages more robust on-chain activity, which benefits altcoins significantly.
Total Value Locked (TVL) in DeFi Protocols
The total value locked (TVL) in decentralized applications (DeFi protocols) is expected to top $300 billion in 2025, far surpassing 2021’s highs of approximately $180 billion. This increased adoption of DeFi will likely drive up demand for cryptocurrencies and contribute to the growth of the overall market.
Trump Pump
Others, including asset manager Grayscale, are similarly optimistic about the cryptocurrency market’s prospects in 2025. In December, Grayscale added several decentralized finance (DeFi) applications, including two on Solana, to its list of the top 20 tokens to watch in the first quarter of 2025.
Warm Policy Environment
Grayscale cited the warming US policy environment as a key factor in their optimism. Trump has promised to appoint industry-friendly leaders to key regulatory agencies and make the US "the world’s crypto capital." This shift towards a more favorable regulatory climate will likely contribute to increased adoption and growth of the cryptocurrency market.
Industry Expectations
Raj Brahmbhatt, CEO of Web3 settlement company Zeebu, is also bullish on the prospects for the US becoming a global leader in the cryptocurrency space by the end of 2025. He stated that "in the US, with Trump’s victory, I am aggressively bullish on the US becoming a global leader in the space by the end of the year."
Conclusion
The predictions made by Steno Research suggest that 2025 will be a record-breaking year for the cryptocurrency market. With BTC and ETH expected to surpass all-time highs, and altcoins set to experience significant growth, investors are eagerly anticipating the opportunities that this new year will bring. As the regulatory environment continues to shift in favor of cryptocurrencies, and institutional adoption increases, it is likely that 2025 will be a year to remember for the cryptocurrency market.