A recent report by Citi highlights the significance of continued adoption in driving digital asset performance in 2025. The research emphasizes the importance of tracking adoption metrics for long-term crypto performance.
Adoption Metrics Remain Elevated
The report notes that key adoption metrics, such as crypto ETF inflows, onchain activity, and stablecoin usage, spiked after President-elect Donald Trump won the US presidential election in November 2024. These elevated levels are expected to persist into 2025.
Why Adoption Matters
Adoption is considered a crucial concept for tracking long-term crypto performance. The report states:
"Adoption is, in our view, the most important concept to track for the long-term performance of crypto."
This emphasis on adoption underscores its impact on digital asset markets. As more users and institutions participate in the ecosystem, demand for cryptocurrencies increases, driving prices higher.
ETF Activity Sees Improvement
The report highlights a significant increase in ETF activity, which is seen as an essential metric for tracking adoption. Citi notes that:
"ETF activity and broader volumes are improving"
This improvement in ETF activity is accompanied by growing market caps of stablecoins, which serve as a measure of flows into the crypto ecosystem.
Stablecoin Market Caps Rise
Stablecoins have experienced significant growth since the US presidential election, with combined market capitalizations exceeding $25 billion. This increase in stablecoin market capitalization has a positive impact on decentralized finance (DeFi), as:
"stablecoins are the on-ramp to decentralized finance."
The growth of stablecoins also reflects increased adoption and participation in the crypto ecosystem.
Onchain Activity Accelerates
Citi’s report reveals that onchain activity, particularly for stablecoins, has accelerated. This acceleration is reflected in various metrics, including:
- Ethereum Network Activity: 210% increase in activity versus 2023 averages
- Large and Small Crypto Wallets: slight increases since the November US election
This growth in onchain activity underscores the expanding user base and increasing participation in digital asset markets.
Institutional Inflows Fuel Demand Shocks
The report notes that surging institutional inflows could cause positive demand shocks for Bitcoin, potentially sending BTC’s price soaring in 2025. Sygnum Bank’s December assessment emphasizes the potential impact of institutional inflows on cryptocurrency prices:
"demand shocks" will spike Bitcoin’s price — Sygnum
This expected increase in institutional investment is likely to drive up demand and push prices higher.
Crypto ETF Inflows Remain Strong
Citi highlights the significance of crypto ETF inflows, which have a strong effect on price performance. The report notes that:
"ETF inflows are among the most important metrics to watch because they are ‘more likely than other trading activity to be new funds/market participants entering the crypto space.’"
These inflows have led to substantial increases in net assets for US Bitcoin ETFs, breaking $100 billion for the first time on November 21.
Impact of Crypto ETF Inflows on Price Action
The report provides insights into the impact of crypto ETF inflows on price action. Citi notes that:
"in 2024, BTC ETF inflows accounted for ‘~46% of the variance in BTC price action’"
This significant influence underscores the importance of tracking these metrics.
Potential Price Impact of Institutional Inflows
Asset manager Sygnum Bank has suggested that surging institutional inflows could send Bitcoin’s price soaring in 2025. Citi’s report highlights the potential for positive demand shocks to drive prices higher:
"demand shocks will spike Bitcoin’s price — Sygnum"
This expected increase in institutional investment is likely to fuel growing demand and push prices upward.
Conclusion
The continued adoption of stablecoins, crypto ETF inflows, and onchain activity are driving digital asset performance in 2025. Citi’s report highlights the significance of tracking these metrics for long-term crypto performance. As more users and institutions participate in the ecosystem, demand for cryptocurrencies increases, driving prices higher.
Sources
- "Continued adoption drives growth" by Sygnum Bank
- Citi Research Report: December 26
- Bloomberg Intelligence Data
Related Articles
- "2025 ‘demand shocks’ will spike Bitcoin’s price — Sygnum"
- "ETF inflows and onchain activity drive digital asset performance"
This report provides valuable insights into the factors driving digital asset performance in 2025. By tracking adoption metrics, investors can refine their strategies to capitalize on these trends.
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