A report from financial analytics firm Coalition Greenwich has identified significant trends shaping the financial landscape in 2025, with a strong focus on the integration of cryptocurrency into traditional finance. The report highlights that eight out of ten key trends for the coming year are influenced by the burgeoning crypto market, indicating a notable shift towards what is described as a “love affair” between traditional finance (TradFi) and decentralised finance (DeFi).
Among the forecasts, the growth of exchange-traded funds (ETFs) is positioned as a central theme, with analysts expecting that their influence will continue to expand. "Asset managers and owners have now discovered that ETFs are an incredible distribution tool for almost everything,” including popular cryptocurrencies like Bitcoin and Ethereum, said Coalition Greenwich. It is noted that Bitcoin ETFs currently hold 6% of the total Bitcoin supply, with this figure poised to grow as demand for crypto-related investment vehicles increases.
The report also emphasises the pressure new entrants pose on established financial institutions. The rise of agile newcomers, such as the neobank Revolut, which has recently broadened its crypto exchange reach to 30 additional European markets, reflects a competitive environment where traditional players must adapt rapidly to maintain their market positions.
A notable trend is the anticipated deepening overlap between TradFi and DeFi. The report suggests that financial institutions are beginning to offer access to traditional assets through DeFi mechanisms, hence the phrase “the script has been flipped.” In a discussion with DL News, a portfolio manager from a hedge fund remarked on this shift, noting an increase in arbitrage opportunities between the Solana and Ethereum ecosystems. However, this manager cautioned against the likelihood of traditional finance pouring substantial capital into DeFi, stating the current regulatory environment raises concerns.
The document also points to a burgeoning market for Bitcoin options, which are expected to see a dramatic increase in trading volumes, projected to reach a record $14 billion by the end of 2025. Many traders are betting on the bullish performance of Bitcoin, indicative of wider market optimism. The anticipated regulatory support from the incoming U.S. administration, particularly under Donald Trump, is believed to further energise this momentum, catalysing a rise in crypto-focused ETFs.
However, the report underlines potential volatility in 2025, describing it as potentially "the most unpredictable since the start of the pandemic." The interplay between regulatory changes, market dynamics, and emerging technologies will be closely watched as the year unfolds, affecting both traders and institutional investors alike.
The findings of Coalition Greenwich reflect a transformative period in the finance sector, one in which emerging technologies and evolving market practices are reshaping investment strategies and operational frameworks.
Source: Noah Wire Services