6 Factors That Can Dominate the Cryptocurrency Market in 2025

By September 2024, the central bank's interest rate cuts and economic policies will further drive the growth trend of cryptocurrencies. However, the milestone event was the victory of Mr. Donald Trump in the US presidential election. Mr. Trump supported cryptocurrencies during the campaign, and after winning, he appointed many cryptocurrency supporters to key positions, including Mr. Paul Atkins as the Chairman of the US Securities and Exchange Commission (SEC). These actions have pushed bitcoin over the $100,000/BTC mark for the first time, leading to the growth of altcoins. Altcoins are alternative currencies. Altcoins are created to improve or provide features that bitcoin does not have, such as faster transaction speeds, better scalability, or specific applications for various industries. The total market value of cryptocurrencies is currently at $3.4 trillion, nearly double from last year, despite the sell-off following the Federal Reserve's (Fed) strong statement last week. Analysts from the financial conglomerate Citi Group, led by Mr. Alex Saunders, recently stated in a report that: "The cryptocurrency market has seen strong growth this year, with total market capitalization increasing by over 90%." So, will the cryptocurrency market continue to grow in 2025? Citi's report identifies 6 key factors that may impact the value of cryptocurrency in the coming year, including ETFs, regulations, and the outlook for stablecoins. Macroeconomic Support Analysts expect the current macroeconomic context to continue supporting risky investment transactions in the first quarter of 2025, but caution that the outlook afterwards is uncertain. The future will depend on the economic policies of President-elect Donald Trump and the volatility of the stock market. Money Continues to Flow into Spot ETFs Bitcoin ETF funds have already attracted $36.4 billion since the beginning of operation in January this year, while Ethereum ETF funds have reached a value of $2.4 billion since July 2024. SEC's approval of these funds after years of waiting has made cryptocurrency trading easier. Through ETFs, investors can track the prices of bitcoin and ethereum without directly owning these currencies. Multi-Asset Investment Category Allocating cryptocurrency in the investment portfolio will also play a crucial role. Analysts say bitcoin has brought value to multi-asset portfolios this year, but it remains a risky and highly volatile asset. To allocate 5% of the portfolio, cryptocurrencies need to deliver a performance of over 21% to compensate for the risk, based on recent risk-return ratios. Stablecoin Diversification Stablecoin, often associated with fiat currencies like USD, is helping the cryptocurrency market become more stable. After Trump's victory, this industry is expected to develop with the emergence of many new stablecoins, threatening the position of Tether - the largest stablecoin issuer at present. Analysts believe that diversifying stablecoins will help reduce system risks from a specific issuer. Wider Acceptance Analysts emphasize that widespread acceptance is the key factor driving the recent cryptocurrency market boom. Although trading volume and market capitalization have increased, acceptance in countries with currency issues like Turkey, Argentina, and Venezuela will determine the long-term development potential of this market. Relaxing Regulations With the appointment of many officials who support cryptocurrency in important positions, the cryptocurrency market expects more 'breathable' regulations, creating conditions for wider acceptance. Analysts believe that this is not necessarily about abolishing regulations, but reducing barriers, and forecasting an approach based on legislation rather than enforcing measures as before. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)