FX168 Financial News (North America) reported that the crypto industry has gone through a year of dramatic ups and downs, primarily driven by Trump's election victory. Citi Analysts indicated that they are focusing on various factors defining the industry. Here are six factors that could either support or obstruct Cryptos in 2025.

Dozens of Bitcoin spot ETFs launched in January sparked a rebound in the industry, making it easier for investors to Trade in Bitcoin. In September, a series of central bank interest rate cuts and Other policies paved the way for economic growth, adding significantly to the rebound.

However, there has been no more crucial development for digital Assets than Donald Trump's victory on election day. Trump advocated for Cryptos during his campaign, and since winning the election, he has selected several crypto supporters to lead his administration.

These moves helped Bitcoin surpass the critical threshold of 0.1 million dollars for the first time in history, with altcoins also gaining momentum.

Elation pushed the total market value of the crypto market to 3.4 trillion dollars, nearly double that of last year, despite facing sell-offs following hawkish remarks from the Federal Reserve meeting last week.

Citi Analysts, led by Alex Saunders, stated in a note last Friday that this year has been a strong one for Cryptos, with total market cap growing by over 90%.

Will Cryptos continue a bull market in 2025? Citi Analysts' note pointed out six key factors that will help determine next year's Cryptos prices, including ETF activity, regulation, and the future market of a type of cryptocurrency known as stablecoins.

(1) A supportive macro background.

Analysts stated that they expect the current macro environment to continue supporting risk trades into the first quarter, but warned that the outlook thereafter is less certain. They noted that the outlook may shift depending on Trump's economic policies and Stock volatility.

They mentioned that given the increased uncertainty of USA policies and predicted Stock volatility, the macro situation may become less favorable for the remainder of this year.

(2) Continued Inflow into Spot ETFs

Analysts expect that the first year of trading for crypto Spot ETFs will last until 2025, providing further momentum for crypto growth.

Since trading began in January, the inflow into Bitcoin Spot ETFs has reached 36.4 billion dollars, while Ethereum Spot ETFs have garnered 2.4 billion dollars since their launch in July.

After years of approval processes, the ETF received SEC approval this year, making it easier to Trade Cryptos. By purchasing the Fund, investors can access the price movements of Bitcoin and Ethereum without having to buy the coins themselves.

Analysts indicated that these flows have been the most important driver of crypto returns, and they expect this trend to continue in 2025.

(3) Cryptos hold a place in multi-asset portfolios

Portfolio allocation is also key to future returns. Analysts state that during this year's rebound, Bitcoin will add value to multi-asset portfolios. Nevertheless, it remains a volatile and risky asset, with a distribution of over 3% accounting for 10% or more of the total portfolio risk.

Therefore, Citigroup analysts suggest that crypto returns need to exceed expected returns from stocks by several percentage points to justify a 1% portfolio allocation, and for larger shares, crypto returns need to be much higher.

Analysts wrote that for a 5% allocation, performance needs to be higher—using the long-term risk-return tradeoff of the S&P, achieving double digits, or using the recent ROI of 21%, high return/risk means that investors need to receive generous compensation for taking on additional risk.

(4) The issuance of stablecoins.

Analysts state that the issuance of stablecoins has been driven by renewed enthusiasm in the industry following Trump's election win, which will help create a healthier crypto market.

Stablecoins are designed to maintain price stability over time—often pegged to fiat currencies like the dollar—meaning their volatility is generally smaller than that of cryptos like Bitcoin, as long as the stablecoin issuers have enough collateral to actually support them.

Analysts indicate that more stablecoins entering this space may threaten the long-term leadership of Tether, especially with the new partnership between Circle and centralized exchange Binance.

They say that innovation, partnerships, and new entrants in the stablecoin space pose risks to Tether's dominance.

They added that these developments might help stablecoins continue to lead in the decentralized finance sector.

Analysts stated, "We generally believe that the diversification of the stablecoin market is positive because it will reduce the systemic risk potential of specific issuers," and added, "The widespread adoption of stablecoins with use cases beyond crypto trading may be a driving factor for broader DeFi participation."

(5) Wider adoption

Analysts indicated that the most important tracking theme is adoption.

They mentioned that while ETF activity and broader trading volumes have improved, the market cap of stablecoins has also risen, but broader adoption is needed to generate returns beyond the post-election excitement.

Analysts stated that they are monitoring Bitcoin trading volumes, the market value of stablecoins, and the increasing adoption rates in currency-issue countries like Turkey, Argentina, and Venezuela.

(6) Less regulation

Finally, analysts mentioned that with Trump's presidency, regulation will become a dominant theme next year. The incoming USA president has appointed several candidates supportive of crypto into his cabinet. Their policies remain unclear, although the industry generally expects lighter regulation, which could drive broader adoption.

Analysts indicate that the outcome may shift from enforcement regulation to a more legislative-based approach, adding that this "is less about a story of deregulation and more about eliminating headwinds."