- The 21Shares report says 2025 is promising amid short-term challenges.
- Institutional adoption of BTC will increase rapidly in 2025.
- Ethereum will continue to grow but will feel Solana’s heat.
21Shares, a fin-tech company, believes 2025 will be a promising year for crypto despite short-term challenges. Geo-political tensions and market dynamics will continue to pose hurdles. However, 2025 will see ATHs, inflows, and increased adoption overall.
21Shares’ 2025 Crypto Market Outlook report, the State of Crypto magazine, made significant projections for Bitcoin (BTC) and Ethereum (ETH).
21Shares sponsors the Ark 21Shares Bitcoin ETF (ARKB:CBOE). It is the 4th largest Bitcoin ETF in terms of assets under management. ARKB holds 47,008.4 BTC as of December 29th, 2024.
Institutional Adoption: Debt Crises to Make BTC Gold Attractive
21Shares predicts more countries will adopt Bitcoin as a strategic reserve asset in 2025. The adoption will be driven by rising institutional adoption, inflationary pressures, and mounting debt. Moreover, these factors will also drive up demand for gold.
“Both assets (BTC and Gold) are likely to reach new all-time highs in 2025.” The report noted.
The report highlighted the cases of El Salvador and Bhutan to emphasize the rising global political acceptance of Bitcoin. Additionally, it noted that Russia had reversed its ban on crypto mining.
Companies across the world are investing in Bitcoin. Companies like MicroStrategy and Metaplanet are buying Bitcoin for the long game.
The Ark 21Shares Bitcoin ETF sponsor pointed to inflationary pressures and the debt crises in the US and China.
“We’re witnessing a clear shift, as nation-states increasingly embrace the Bitcoin standard.” As per the report, Argentina is likely to adopt Bitcoin in 2025. Argentina is collaborating with El Salvador at the highest levels to adopt BTC.
BLOB Space and L2 Demand Will Boost Ethereum’s Dominance
Ethereum will regain its 2022 and 2023 revenue levels in 2025 due to the BLOB Space upgrade (EIP 4844). Also, with several web2 companies launching Layer 2s (L2), Ethereum will thrive.
“By 2025, we expect Ethereum to regain its revenue levels, driven by increased demand for BLOB space, likely surpassing 100% of its target growth due to strategic L2 integrations.”
“…Web2 firms like Robinhood and PayPal, along with traditional finance entities like Visa, are likely to launch their own L2s, leveraging cost-efficiency and scalability to unlock new revenue streams and serve a growing demand for decentralized applications.”
21Shares noted that EIP 4844 was a critical upgrade for Ethereum as it enhanced speed and cost efficiency on the network. Ethereum faces competition from L2s, even though they are piggybacking on the Ethereum mainnet. L2s ultimately reduce the fees accumulated on Ethereum.
Solana ETF Unlikely in 2025, ETPs to Hit $250B in 2025
Solana’s technical advantage over the Ethereum network made it the ultimate Ethereum killer in 2024. Higher transaction speeds and highly competitive cost margins have placed Solana as a competitor to Ethereum. The report emphasized institutional interest in Solana.
“Franklin Templeton will launch its OnChain U.S. Government Money Market Fund on Solana25, marking a major institutional tokenization move.”
“…Solana’s expanding role in TradFi is expected to set the stage for traditional financial products such as Solana futures on the CME or U.S.-domiciled Solana ETFs.” The report added.
Nevertheless, 21Shares feels a Solana ETF is unlikely in 2025. However, it will be a high possibility in 2026.
The global shift in regulatory positions toward digital assets will enable rapid inflows into exchange-traded products (ETPs). This includes the United States and the United Kingdom, among others.
“Looking ahead to 2025, institutional adoption is expected to accelerate as the one-year due diligence period wraps up in January, lifting restrictions that have so far prevented registered investment advisors and wirehouses in the U.S. from advising clients on Bitcoin Spot ETFs.”