3 Digital Assets Trends Shaping 2025 and Beyond

Merry Christmas everyone. I hope everyone is getting into the festive spirit. Since this is the final Weekly Research issue of 2024, instead of our usual deep dive, let’s keep it short, powerful, and packed with value. 

So here are 3 key adoption trends in digital assets from 2024 that are likely to continue and accelerate in 2025 and beyond.

TREND 1: Stablecoins Are Taking Over

Stablecoin is becoming the default front-end for digital assets and a battleground for fintechs looking for a sticky product and AUM growth

2024 Milestones:

• Market Size: +56%, $204B in Nov 2024 vs $130B in Dec 2023 
• Transaction Volume (adjusted): +50%, $5.5T in 2024 vs $3.67T in 2023
• Active Wallets: +47%, 34M in Nov 2024 vs 23M in Dec 2023

2025 Prediction: stablecoin is likely to maintain 50%+ growth across all above metrics as more established fintech and financial institutions enter the space with extensive distribution networks

Adoption Growth Challenges/Catalysts:

• Stablecoin is becoming the default pricing unit for all transactions in the digital assets space. It is the most frequently used trading pair for both spot and derivatives trading. 

• The business model has proven to be insanely profitable. The biggest stablecoin issuer Tether is the single most profitable company in the world, beating the best of the best hedge funds. It earned more than $100M profit per employee. You can learn more here.

• Banks, fintechs and crypto native startups are all coming for this market. But regulation remains a key hurdle. Figuring out distribution while staying compliant across a fragmented regulatory framework is a key challenge for regulated players. You can learn more here.

• Major currencies outside the USD are likely to see significant growth as Europe’s MiCA kicks into play.

TREND 2: Tokenized MMF/US Treasuries are Emerging as a Foundational Onchain Money Layer

Tokenized MMF/US Treasuries could challenge stablecoin as the default money layer for onchain finance and a battleground for asset managers looking to take an early lead in a multi-trillion asset class.

2024 Milestones:

• Market Size: +500%, $3.5B in Dec 2024 vs $0.76B in Dec 2023 
• Holders Count: +680%, 8.9k in Dec 2024 vs 1.3k in Dec 2023
• DeFi Integrations: 100+ in Dec 2024 vs 0 in Dec 2023

2025 Prediction: tokenized MMF/US Treasuries are likely to outpace the growth in stablecoin with triple-digits growth as more users discover they can access an upgraded version of stablecoin with savings function built-in 

Adoption Growth Challenges/Catalysts:

• Tokenized MMF/US Treasuries is likely to be the first tokenization use case to reach meaningful scale for regulated institutions as a more capital-efficient collateral form than traditional Treasuries in OTC trading. You can learn more here.

• Asset managers looking for growth opportunities will enter the space as this represents both a new untapped and rapidly growing capital pool as well as a more lucrative revenue stream vs traditional MMF business.

• Understanding how the AUM flywheel works in digital assets will be a success determinant as traditional players adapt to the digital assets space. I have been fielding an increasing number of inquiries from AM. If you are an AM looking to enter the space and looking for GTM help, feel free to reach out.  

• The ratio of tokenized US Treasuries to stablecoin market size is likely to increase from current 1.5% to 5%-10% as secondary market liquidity improves and integration across applications give more utilities to holders. In turn, liquidity and integrations will be a moat for market leaders. 

TREND 3: Institutionalization of Digital Assets are Accelerating

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