Crypto markets to hit $7.5tn by 2025, Bernstein says. Seven ways to ride the rally

Crypto is just warming up.

That’s pretty much the conclusion of a new research report, suggesting that the total value of cryptocurrencies will triple to $7.5 trillion by 2025.

Bernstein researchers Gautam Chhugani and Mahika Sapra outlined in a note to clients how seven factors can help them seize on the rally.

Bitcoin

Bernstein sees Bitcoin climbing to $150,000 by 2025. The “unprecedented” inflows of 10 spot Bitcoin exchange-traded funds that launched in January have now “reinforced our conviction.”

While inflows have slowed since the start of April, “it is a short-term pause before ETFs become more integrated with private bank platforms, wealth advisors, and even more brokerage platforms.”

Ethereum

Ethereum, the world’s second biggest cryptocurrency, is up 43% this year, but has struggled to keep up with Bitcoin.

“Ethereum has had to fight this with one hand tied” behind its back, Chhugani and Sapra wrote.

The reason? The US Securities and Exchange Commission has yet to approve a spot Ethereum ETF.

Most market watchers say the odds of US regulators approving similar funds — when the first application faces a deadline onMay 23 — are low.

However, Bernstein said a rejection could trigger litigation, similar to Grayscale’s case to convert its futures Bitcoin ETF into a spot fund, that will bring the “narrative back on ETH.”

Ethereum staking

Bernstein also advised investors to keep an eye on the cryptocurrency’s staking economy.

That’s where the likes of Lido and EigenLayer will continue to drive Ethereum’s growth over the next year.

Solana

Solana is still only the world’s fifth biggest cryptocurrency, with a total value of $60 billion.

However, Bernstein said its integrated single-layer design, low transaction cost, fast processing, and dominant market share in stablecoin volumes reflects “growing dominance as a payments powerhouse.”

It’s set to grow as payment behemoths like Stripe adopt Solana features, Chhugani and Sapra wrote.

DeFi

The crypto crackdown has predominantly focused on centralised exchanges like Coinbase and Binance.

This will be positive for the growth of decentralised finance, the Bernstein analysts said.

Tokenisation

Tokenisation is a big theme of 2024, with BlackRock and Franklin Templeton pushing further into this space.

Chhugani and Sapra wrote that this push will see new participants join the fray — both from the worlds of crypto and traditional finance.

Crypto games

For years, web 3 games have been touted as the future of video games.

Despite a wave of blockchain-based hitting the market in 2021, none captured the imagination of mainstream gamers.

Now, venture capitalists and analysts predict that web 3 games are coming back.

Bernstein’s analysts advise investors to invest in Ronin Blockchain, which is primarily focused on games.

While its flagship game Axie Infinity has lost 95% of its value since its November 2021 high, Bernstein noted that Ronin has onboarded 11 new games and has about three million active monthly users.

Eric Johansson is DL News’ News Editor. Got a tip? Reach out on eric@dlnews.com.