CEX released the 2025 encryption outlook: the market will undergo a transformation, which is the beginning of a bigger business.

On December 22nd, CEX released its 2025 outlook for the cryptocurrency market. "The success achieved in the encryption market in 2024 is unprecedented and it is not easy to get here. Although it is easy for people to regard these successes as the pinnacle of years of work, more and more people believe that they are actually just the beginning of a bigger business." The report focuses on the following five areas: 1. Stable coins are the killer application of encryption. As of December 1, 2024, the stable coin market cap has risen by 48% to a historical high of $193 billion, and this number could rise to $3 trillion within the next five years. We will soon see that their most important use case will be global capital flows and business, not just transactions. 2. RWA tokenization is expected to rise significantly. According to rwa.xyz data, as of December 1, the tokenization of RWA has risen by more than 60%, reaching $13.5 billion (excluding stable coins), and tokenization will continue to make significant progress in 2024. Companies are trying to use tokenized assets as collateral for other financial transactions (such as transactions involving derivatives), which can simplify operations and reduce risks. The RWA trend is surpassing assets such as US Treasuries and currency market funds, and is also gaining traction in private credit, commodities, corporate bonds, real estate, and insurance. 3. Encryption ETFs forever change the supply and demand dynamics of cryptocurrency. After the success of the US SpotBTC ETF set a record, the entire cryptocurrency market has changed. Almost every type of institutional investor (including donor funds, pension funds, hedging funds, investment advisors, and family offices) now has a cryptocurrency ETF. What we are more interested in is what will happen if the SEC allows cash creation and redemption of ETF shares or allows ETFs to stake. These changes can increase the potential return of ETF holders, making ETFs more attractive to investors. 4. The revival of decentralized finance will push it into a new era. Decentralized Finance suffered some shocks in the last cycle, but a more sustainable and resilient ecosystem has emerged. The TVL of lending protocols reached a historical high, and the share of DEX volume (relative to CEX) reached a high point. In addition, the shift in the US regulatory landscape and the adoption of on-chain verification may help provide a clear path for traditional institutional investors to participate in Decentralized Finance. All of this suggests that Decentralized Finance may expand its influence in the near future. 5. Regulation will eventually turn from headwinds to tailwinds. For many years, the encryption market has been plagued by unclear regulations in the United States, but now the situation has reversed, and the US Congress will soon welcome the most cryptocurrency-friendly Congress in history. Both parties in the House of Representatives and the Senate support cryptocurrency, and we believe there is a high possibility of achieving new legislative milestones. It is expected that the United States will establish a comprehensive regulatory framework, enact sound stablecoin legislation, and end the era of enforcement regulation. The breakthroughs and progress in 2025 will likely determine the long-term development trajectory of the encryption industry for decades to come. This will be a critical year.