These optimistic predictions are fueled by expectations of increased institutional adoption and favorable regulatory shifts under a potential Trump administration. Ethereum is also expected to outperform Bitcoin, with the ETH/BTC ratio potentially doubling. Additionally, decentralized finance (DeFi) activity is anticipated to soar. Meanwhile, Ether ETFs, led by BlackRock and Fidelity, are gaining momentum, and analysts project Ether could outperform Bitcoin ETFs as staking-enabled funds emerge.
Ethereum and Altcoins Predicted to Lead in 2025
The crypto market is poised for a record-breaking year in 2025, with Bitcoin (BTC) and Ethereum (ETH) expected to smash previous all-time highs, according to Steno Research. Their latest research note predicts that Bitcoin's price could climb above $150,000, while Ethereum might surpass $8,000, fueled by favorable regulatory developments, a supportive macroeconomic climate, and historically strong post-halving performance.
These projections could also become a reality due to the expectations of unprecedented institutional adoption. In fact, US-based Bitcoin and Ethereum ETFs are forecasted to receive net inflows of $48 billion and $28.5 billion, respectively.
Predicted Bitcoin and Ethereum ETF inflows for 2025 (Source: Steno Research)
Steno Research also expects that Ethereum will outperform Bitcoin, with the ETH/BTC ratio predicted to climb to at least 0.06, which is almost double its current level. This performance is expected to trigger a broader altcoin season that will reduce Bitcoin's dominance in the total crypto market capitalization from its current 57% to around 45%.
The report attributes part of this shift to Donald Trump’s US presidential victory, which Steno believes will encourage more robust on-chain activity that will benefit altcoins like Ethereum and Solana. Decentralized applications are also expected to thrive, with total value locked (TVL) projected to exceed $300 billion. This will far outweigh the previous high of $180 billion in 2021.
Forecasted TVL for DeFo protocols in 2025 (Source: Steno Research)
Grayscale shares this optimistic view. The firm recently expanded its top 20 tokens to include several decentralized finance (DeFi) applications, including projects on Solana. The firm stated that the US’s warming policy environment under Trump was the reason for this decision. The former president promised to appoint crypto-friendly regulators and position the US as a global leader in the blockchain space. Industry leaders like Raj Brahmbhatt of Web3 settlement company Zeebu are equally optimistic, and predicted that the US will emerge as the world’s crypto capital by the end of 2025.
Optimism Grows for 2025 Stock and Crypto Markets
Two-thirds of Americans anticipate a stock market rise in 2025, which is a big improvement in sentiment compared to 2023, according to a Gallup survey that was conducted in December. The poll included up to 100,000 participants, and reflects increased optimism after Donald Trump’s victory in the US presidential election.
While 66% of the respondents predicted stock market gains, an increase from the 2023 outlook, only 23% expect political cooperation in the US, and 32% expect international peace. These figures, while still low, are certainly an improvement over the dismal 2023 expectations for political harmony and global stability.
(Source: Gallup)
The potential impact of these sentiments on the crypto market is significant. Historical data suggests that stock market gains often align with increased risk-taking, benefiting Bitcoin and other digital assets. Bitcoin’s correlation to the S&P 500 is still volatile, but its price movements often mirror those of tech stocks.
However, geopolitical instability could still pose some challenges. This was proven by Bitcoin’s sharp declines during international conflicts, like the Russia-Ukraine war and the Iran-Israel tensions. Conversely, Bitcoin rallied during periods of US banking instability.
Gallup’s survey also revealed mixed economic expectations for 2025. While over half of the respondents predicted increasing employment and manageable inflation, many are still concerned about economic difficulties, driven by a rising federal budget deficit and China’s growing influence. Partisan divides were also evident, with Republicans expressing more optimism for 2025 than Democrats, which is a typical trend when the presidency shifts parties.
The crypto market outlook for 2025 remained generally optimistic, especially with expectations of a more crypto-friendly Trump administration potentially boosting Bitcoin’s performance. Some even speculated about the introduction of a strategic Bitcoin reserve under the new administration. However, the Federal Reserve’s decision to reduce projected 2025 interest rate cuts from five to two could create headwinds for both the stock market and risk-on assets like Bitcoin.
Crypto Industry Awaits Regulatory Shifts in 2025
As the United States prepares for a new presidential administration and Congress, the digital asset industry is speculating that the leadership change could bring more favorable regulations and laws. Under the tenure of SEC Chair Gary Gensler and his predecessor Jay Clayton, the commission pursued several enforcement actions against US crypto firms, including high-profile cases against Ripple and Coinbase. Ripple’s chief legal officer, Stuart Alderoty, recently called for more regulatory clarity, asserting that a token itself is never a security but can be involved in a security transaction.
Coinbase’s chief legal officer, Paul Grewal, also shed some light on the implications of the US Supreme Court’s 2024 decision to overturn the Chevron doctrine. This ruling requires courts to exercise independent judgment rather than defer to agency interpretations, potentially shifting how SEC cases involving digital assets are decided.
Several ongoing cases between the SEC, the Commodity Futures Trading Commission (CFTC), and crypto firms are set to progress in 2025. These include criminal proceedings against former Celsius CEO Alex Mashinsky and Terraform Labs co-founder Do Kwon, both of whom face scrutiny after the sentencing of FTX executives and Binance’s former CEO Changpeng Zhao. Changes in leadership at key regulatory bodies, including the SEC, CFTC, or the US Attorney’s Office in New York, could hugely impact these cases.
Donald Trump’s proposed leadership changes, including appointing former SEC Commissioner Paul Atkins as SEC chair and replacing Damian Williams with Jay Clayton as US Attorney for the Southern District of New York, signal potential positive shifts in the regulatory approach toward digital assets.
Ether ETFs Gain Momentum
The momentum in the crypto market heading into the new year already started heating up in December, especially for Ether ETFs. These exchange-traded funds (ETFs) experienced impressive growth in December, with total net inflows surpassing $2.6 billion, according to Farside Investors.
This capped an eight-week streak of consecutive inflows during November and December, including a record-breaking $2.2 billion in the week of Nov. 26, according to CoinShares data. Despite this growth, Ether ETFs still trailed behind Bitcoin ETFs, which recorded over $35 billion in net inflows for 2024.
BlackRock’s iShares Ethereum Trust (ETHA) led the Ether ETF market with $3.5 billion in net inflows for the year, followed by Fidelity Ethereum Fund (FETH) with $1.5 billion. However, these gains were partially offset by $3.6 billion in net outflows from Grayscale Ethereum Trust (ETHE), as investors gravitated toward lower-cost alternatives like Grayscale’s Ethereum Mini Trust that was launched in July with reduced management fees.
Bitcoin ETFs followed a similar trend, with BlackRock’s iShares Bitcoin Trust (IBIT) attracting approximately $37 billion in net inflows, while Grayscale Bitcoin Trust (GBTC) faced over $20 billion in outflows. Analysts predict that Ether ETFs could outperform Bitcoin ETFs in 2025, particularly if Ether’s price performance improves and regulators permit ETFs to generate staking yields.
Since November, Ether outperformed Bitcoin in both spot and derivatives markets. BTC ETFs experienced their largest-ever net outflows on Dec. 19, which only added to the speculation that Ether could take the lead in 2025. Growth in Ethereum network activity, including the increasing deployment of artificial intelligence agents, is also expected to boost Ether’s performance.
Looking ahead, VanEck projects Ether’s spot price could reach $6,000 by the fourth quarter of 2025.
