The cryptocurrency market has already begun recovering from the recent downturn. This incredible increase is largely driven by increasing retail and institution adoption. Stablecoins are a huge part of the reason for this boom. In May, their market cap jumped to $247 billion, accounting for close to 10% of all physical cash in circulation in the U.S. This rapid expansion, in concert with increasing enthusiasm among retail and institutional investors alike, bodes well for a bullish 2025.
Retail and Institutional Adoption on the Rise
In the context of increasing awareness and sophistication alongside increased availability, retail crypto adoption is booming. Among those who don’t yet own crypto, 14% plan to buy their first this year. Additionally, 67% of those already holding crypto plan to invest more in the near term, an indication of robust bullishness for the asset class.
Institutions are also stepping up their involvement. According to a recent Coinbase/EY-Parthenon survey, 83% of institutional investors intend to add to their crypto allocations by 2025. As high as retail interest in crypto is, institutional interest is even higher. Just think—back in May, crypto-fund assets hit an astounding $167 billion, thanks to $7 billion in net inflows. In just the last few months, U.S. corporations have contributed a collective $11.3 billion to crypto treasuries, deepening institutional commitment.
Stablecoins and Cross-Border Payments
Today, we’re seeing stablecoins become a key factor in the growth of crypto adoption, providing a medium for transaction and use as a more stable medium of exchange. The growth of the stablecoin market has been astounding. It now comprises almost 1/3rd of the U.S. physical currency supply, speaking to its rising dominance.
Cross-border transfers Major source of growth Forecasts suggest that stablecoins will make up as much as 20% of all global business-to-business (B2B) payments in the coming years. This transition would make international transactions much faster and cheaper.
Market Outlook for 2025
The growing use of and investment in crypto currencies provide a bullish picture heading into 2025. Crypto users globally soon to be over 1 billion, ~11% of global pop. This continued expansion indicates that the market is approaching the critical mass required for continued growth to become widely adopted mainstream. In the U.S., as of June, that figure was closer to 28% of adults. That’s about 65 million Americans, and it is a significant increase from the 15% in 2020.
As the market develops, look forward to more adoption of decentralized finance (DeFi) and remittance payment infrastructure. In fact, over 80 public companies have since followed suit and added Bitcoin to their balance sheets. This represents approximately 3.4% of the total global BTC supply and reflects a growing trend towards using crypto as a store of value. Onward adoption and investment activity will lead the charge in bullish price action. This momentum will fuel more innovation in a positive way across the entire crypto ecosystem.