DeFi Set to Rebound in 2025

CoinMarketCap’s Head of Research, Alice Liu, stated that the DeFi sector has significant potential for a revival, especially with the relaxation of regulations by the Securities and Exchange Commission (SEC) during Donald Trump’s second term in office.

According to Alice, the DeFi sector could grow 3 to 5 times by 2025, as long as the regulatory framework supports the development of cryptocurrencies. Since the election, DeFi’s market capitalization has doubled, rising from $77 billion to $154 billion. Leading decentralized exchanges (DEX) on Layer 1 networks, liquid staking/restaking, payments, and wallets are expected to be major players in this growth wave.

Alice is also monitoring the trend of tokenizing real-world assets (RWAs), with several commodity tokenization projects emerging in the United Arab Emirates, the United States leading the money market, and Europe beginning to integrate real estate into blockchain. She believes that a wave of regulatory support will push RWAs forward in 2025. There is a strong possibility that we will see the first $1 billion tokenized fund soon.

Institutions Increasingly Shifting to Crypto

Neil Bergquist, CEO and co-founder of Coinme, stated that large institutions will increase their exposure to cryptocurrencies after Gary Gensler’s term at the SEC ends on January 20.

Bergquist cited a recent statement from Morgan Stanley, which announced a $272.1 million stake in a Bitcoin exchange-traded fund (ETF), as well as a combined $600 million investment from Goldman Sachs and DRW Capital in spot Bitcoin and Ethereum ETFs. This marks a significant shift in Wall Street’s view of cryptocurrencies, which is expected to continue growing through 2025.

However, the adoption of cryptocurrency by Wall Street brings its own implications. YouHodler’s Head of Markets, Ruslan Lienkha, warned that cryptocurrency performance is now heavily dependent on the equity markets. If the stock market remains stable or grows, it is highly likely that cryptocurrencies will reach new all-time highs. On the other hand, if the stock market experiences a correction or a medium-term bearish trend, it could affect the cryptocurrency market as a whole.

The Future of Crypto and Emerging Trends

Although crypto is known for its rapidly changing nature, some trends that will dominate in 2025 may not yet exist today. However, the solid performance of Bitcoin and Ether ETFs is expected to drive demand for funds tracking smaller cryptocurrencies such as XRP and Solana.

Additionally, it seems inevitable that countries around the world will become increasingly serious about launching strategic Bitcoin reserves, whether by holding digital assets seized from criminals or by purchasing directly from the market.