Citi Predicts Crypto Surge in 2025: Trump Policies and ETF Inflows as Key Drivers

Citi’s 2025 Crypto Forecast: Major Drivers of Growth

Citi analysts have outlined a bullish outlook for the cryptocurrency market in 2025, citing pivotal factors that include Donald Trump’s pro-crypto stance, rising ETF inflows, and innovations in stablecoins. These dynamics are anticipated to catalyze significant growth for bitcoin, decentralized finance (DeFi), and the broader crypto ecosystem.

Trump’s Policies Set the Stage for Crypto Expansion

Following a record-breaking 2024, fueled by Donald Trump’s election victory and favorable appointments, Citi’s analysts foresee continued momentum in 2025. Trump’s crypto-friendly policies, such as appointing Paul Atkins as chair of the U.S. Securities and Exchange Commission (SEC), have created a more supportive regulatory environment. This policy shift enabled bitcoin to surpass the $100,000 milestone for the first time.

Alex Saunders, a leading analyst at Citi, described 2024 as a landmark year for cryptocurrency, noting a 90%+ increase in total market capitalization. Saunders commented:

“This year was a strong one for crypto, registering a 90%+ increase in total market cap.”

Trump’s administration has further bolstered market confidence by nominating David Sacks as the White House AI and Crypto Czar, signaling a commitment to fostering innovation and establishing a strategic bitcoin reserve.

ETF Inflows Simplify Access to Crypto Investments

The launch of spot bitcoin and ethereum exchange-traded funds (ETFs) in 2024 marked a transformative moment for the crypto industry. These ETFs, approved by the SEC after prolonged debates, have made crypto investments more accessible to traditional investors. Citi analysts emphasized:

“These flows have been the most significant driver of crypto returns, and we expect this to continue in 2025.”

While ETFs have drawn substantial capital, Citi’s report highlights the importance of balancing portfolio allocations due to bitcoin’s inherent volatility. For a 5% allocation in crypto, higher performance—potentially double-digits—is necessary to justify the risks.

Stablecoin Innovation and Market Diversification

The stablecoin sector is poised for continued growth and increased competition. Innovations and partnerships are expected to challenge Tether’s dominance, driving market diversification. Citi’s analysts view this diversification as a critical factor for reducing systemic risks associated with reliance on a single issuer.

The adoption of stablecoins beyond crypto trading could enhance DeFi and broader market engagement. Citi’s report suggests stablecoins have the potential to reshape financial systems by facilitating cross-border transactions and promoting decentralized finance.

Regulatory Shifts: Less Enforcement, More Legislation

Citi’s analysts anticipate a shift in U.S. crypto regulation under Trump’s administration. Moving from enforcement-based regulation to a legislative framework is expected to reduce barriers that previously hindered market growth. However, this shift is not about deregulation but rather removing obstacles to innovation.

“The result is likely to be a shift from regulation by enforcement to a more legislative-based approach,” the analysts explained.

Global Adoption: A Critical Factor for Sustained Growth

While ETFs and stablecoins boost market activity, Citi highlights the importance of global adoption for long-term success. In regions facing economic challenges, such as Turkey, Argentina, and Venezuela, cryptocurrencies could offer solutions to inflation and currency instability.

Citi’s analysts concluded that widespread adoption would play a vital role in ensuring sustained growth, noting:

“Broader adoption of cryptocurrencies will be essential for the market’s long-term success.”