STATE OF CRYPTO

2025 Market Outlook

STATE OF CRYPTO

2025 Outlook:
Key Drivers for Bitcoin
and Digital Assets
The global cryptocurrency market is on the verge
of a transformative year. Key trends such as
increased institutional adoption, advances in
blockchain scalability, and regulatory shifts are
driving this expansion. For markets like Australia,
these trends are particularly relevant due to
high retail adoption, a progressive regulatory
landscape, and growing institutional interest.
By aligning with global developments while
leveraging local strengths, Australian investors
and businesses are uniquely positioned to benefit
from the next wave of innovation in digital assets.

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STATE OF CRYPTO

A Nation-State Will Adopt Bitcoin as a

Strategic Reserve Asset
Bitcoin’s (BTC) decentralised nature and its These examples reflect a broader trend where
reputation as “digital gold” have made it an smaller nations use Bitcoin to address economic
appealing reserve asset for nations seeking to challenges.
hedge against inflation and diversify their reserve
asset holdings. El Salvador’s adoption of Bitcoin Long-term Bitcoin holders have been steadily
as legal tender1 and Bhutan’s integration of Bitcoin increasing since mid-2024,, indicating growing
mining into its renewable energy framework commitment from investors despite price volatility.
highlight its potential to bolster national economies2.

PRICE PERFORMANCE OF BITCOIN AND GOLD VS LONG-TERM BTC HOLDERS

Source: Gold Prices, Glassnode, Data as of October24, 2024.

120% 146,000,00

144,000,00
100%

BTC Supply Held by Long-Term Holders

Price Performance of Bitcoin and Gold

142,000,00

80% 140,000,00

138,000,00
60%
136,000,00

40% 134,000,00

132,000,00
20%
130,000,00

10% 128,000,00

Bitcoin Gold Long-Term Holder Supply

In Australia, while the adoption of Bitcoin as a Simultaneously, institutional interest in Bitcoin is

reserve asset is not currently being pursued, growing, with superannuation funds like Rest Super
blockchain innovation is becoming integral to publicly discussing plans to consider cryptocurrency
financial development. The Reserve Bank of investments4. These developments underscore
Australia (RBA) has piloted a wholesale Central Bank Bitcoin’s evolving role in Australia’s financial
Digital Currency (CBDC), exploring blockchain’s ecosystem and its appeal as a hedge against
potential for improving settlement efficiency3. macroeconomic volatility.

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STATE OF CRYPTO

Bitcoin’s Scalability Will Drive Total Value

Locked to US$10 Billion
Bitcoin’s scalability has long been a challenge, but and a tool for decentralised finance (DeFi). By 2025,
advancements such as the Lightning Network are Bitcoin’s Total Value Locked (TVL) is projected to
addressing this limitation5. These layer-2 solutions grow from US$1.7 billion to US$10 billion, driven
enable faster and cheaper transactions, unlocking by these technological advancements and their
Bitcoin’s broader potential as a payment method adoption across industries6.

BITCOIN SCALABILITY SOLUTIONS BY TVL

Source: 21Shares, DeFi Llama. Data as of October 24, 2024.
*All figures in USD.

$1,800,000,000

$1,600,000,000

$1,400,000,000

$1,200,000,000

$1,000,000,000

$800,000,000

$600,000,000

$400,000,000

$200,000,000

$0
Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24

CORE Bitlayer Rootstock Merlin Stacks Lightning Network

Australia, with approximately 23% of its population cross-border payments. Furthermore, businesses
owning cryptocurrency7, stands to benefit in sectors like e-commerce and financial services
significantly from these improvements. The fintech may adopt Bitcoin as a cost-effective alternative for
sector, which has established itself as a global transactions, further integrating it into the Australian
leader in cryptocurrency adoption, could leverage economy.
Bitcoin’s enhanced scalability for remittances and

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STATE OF CRYPTO

Ethereum’s Revenue Renaissance in 2025

Ethereum is set for a significant revenue revival in and reducing costs, thereby attracting more users
2025, underpinned by network upgrades like Proto- and developers to the platform. Ethereum’s robust
Danksharding and expanded layer-2 adoption8. economic model and versatility position it as a key
These advancements are expected to double driver of blockchain-based innovation.
Ethereum’s network revenue by improving scalability

ETHEREUM VS LAYER-2 FEES

Source: Artemis.
*All figures in USD.

$250,000,000 $5,000,000
$4,500,000
$200,000,000 $4,000,000
Fees Generated by Ethereum

Fees Generated by Layer-2s

$3,500,000
$150,000,000 $3,000,000
$2,500,000
$100,000,000 $2,000,000
$1,500,000
$50,000,000 $1,000,000
$500,000
$0 $0
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24

Ethereum Layer-2s

In Australia, Ethereum’s applications span various Australian government’s commitment to fostering

industries. Developers are using its infrastructure blockchain innovation10. As these developments
to create DeFi platforms, tokenisation solutions, unfold, Ethereum’s influence in Australia’s blockchain
and smart contract-based services9. Initiatives like ecosystem is expected to grow, attracting more
the National Blockchain Roadmap further align investment and talent to the sector.
with Ethereum’s capabilities, showcasing the

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STATE OF CRYPTO

ETPs to Drive Institutional Adoption Beyond

US$250 Billion
Exchange-Traded Products (ETPs) have become a is driven by rising institutional interest, improved
cornerstone of institutional cryptocurrency adoption, regulatory clarity, and the success of spot Bitcoin
offering investors a regulated and accessible avenue Exchange-Traded Funds (ETFs) in key markets.
to gain exposure to digital assets. The global crypto Despite potential influences from M2 money supply,
ETP market surpassed US$100 billion in assets inflation, and market accessibility, Bitcoin ETFs have
under management (AUM) in 2024 and is projected undeniably outperformed Gold ETFs in demand
to exceed US$250 billion by 202511. This growth during their first year of trading.

BITCOIN ETF FLOWS HIGHLIGHT RAPID ADOPTION IN FIRST YEAR

Source: 21Shares, Bloomberg, Data as of October 31, 2024.
*All figures in USD.

$30,000,000,000

$25,000,000,000

$20,000,000,000

$15,000,000,000

$10,000,000,000

$5,000,000,000

$0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

Gold ETF Flows Bitcoin ETF Flows

In Australia, the introduction of crypto-focused institutions are gradually incorporating digital

ETPs on platforms like Cboe has provided retail assets into their portfolios as regulations continue
and institutional investors with new investment to mature. These trends highlight ETPs’ potential to
opportunities12. Younger Australians, with a 31% bridge the gap between traditional finance and the
crypto adoption rate13, are among the primary rapidly evolving cryptocurrency market.
drivers of demand for these products. Meanwhile,

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STATE OF CRYPTO

Rethinking Retail Crypto Bans with Investor

Protections
Globally, regulators are revisiting restrictive crypto to address risks such as fraud and volatility are
policies, with enhanced investor protections playing reshaping the regulatory landscape, enabling safer
a key role in fostering broader adoption. Measures participation in digital asset markets.

U.S. TREASURIES HELD BY COUNTRIES AND FLAT-COLLATERALISED STABLECOINS

Source: Tagos/21Shares Data as of October 25, 2024.
*All figures in USD.

$1,200,000,000,000

$1,000,000,000,000

$800,000,000,000

$600,000,000,000

$400,000,000,000

$200,000,000,000

$0
United Kingdom

Brazil
Japan

Cayman Island

Luxembourg

Canada

Belgium

Ireland

France

Switzerland

Taiwan

India

Singapore

Hong Kong

Norway

Stablecoins

Soudi Arabia

South Korea

Germany

Mexico
In Australia, the Australian Securities and investing in crypto highlights its commitment to
Investments Commission (ASIC) has taken a balancing innovation with investor safety15. These
proactive stance on regulating cryptocurrencies14. steps are bolstering confidence in the market,
Its focus on stricter oversight of exchanges and clear positioning Australia as a secure yet forward-thinking
guidance for self-managed super funds (SMSFs) environment for digital asset investment.

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STATE OF CRYPTO

Conclusion
As the global cryptocurrency market matures, 2025 is shaping
up to be a pivotal year for digital assets. Australia’s high
adoption rates, innovative fintech ecosystem, and evolving
regulatory framework position it as a key player in this global
transformation. By aligning with emerging trends and leveraging
local opportunities, Australian investors and businesses are well-
positioned to lead the charge in this rapidly evolving landscape,
capitalising on the immense potential of digital assets.

Explore Global X’s Crypto Lineup

Global X 21 Shares Bitcoin ETF Global X 21 Shares Ethereum ETF

Inception Date: 9 May 2022 Inception Date: 9 May 2022
Benchmark: CryptoCompare’s Crypto Benchmark: CryptoCompare’s Crypto
Coin Comparison Aggregated Index Coin Comparison Aggregated Index
(Bitcoin) (Ethereum)
Management Costs: 0.59% p.a. Management Costs: 0.59% p.a.

Cboe: EBTC Cboe: EETH

Learn more at www.globalxetfs.com.au/explore-cryptocurrency

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References
[1] “El Salvador Bets on Bitcoin as Legal Tender Despite Skepticism,” Reuters, 7 September 2021.
[2] “Bhutan Quietly Embraces Bitcoin Mining with Hydropower,” Financial Times, 15 May 2023.
[3] “Project Atom: Exploring CBDCs,” Reserve Bank of Australia, October 2023.
[4] “Rest Super Considers Adding Cryptocurrency Investments,” Australian Financial Review, 24 November 2021.
[5] “What Is the Lightning Network?” Investopedia, 10 August 2023.
[6] “State of Crypto: Q4 2024,” 21Shares, 15 December 2024.
[7] “Crypto Adoption in Australia: Statistics 2023,” Finder, 15 January 2023.
[8] “State of Crypto: Q4 2024,” 21Shares, 15 December 2024.
[9] “Blockchain Use in Australia,” Australian Trade and Investment Commission, March 2024.
[10] “National Blockchain Roadmap,” Australian Government, February 2020.
[11] “State of Crypto: Q4 2024,” 21Shares, 15 December 2024.
[12] “Crypto ETFs Debut on Cboe Australia,” Australian Financial Review, 1 May 2022.
[13] “Crypto Adoption in Australia: Statistics 2023,” Finder, 15 January 2023.
[14] “ASIC Targets Crypto Scams with Stricter Regulation,” Australian Financial Review, 20 June 2023.
[15] “SMSF Trustees Warned on Crypto Risks,” ASIC Media Release, 15 August 2023.

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