Crypto’s Mainstreaming Will Take Many Forms in 2025: Fidelity Digital Assets

The launch of Bitcoin exchange-traded products (ETPs) is already beginning to attract big players like pension funds, but nation-states will be the next big investors in Bitcoin, predicts Fidelity Digital Assets research analyst Matt Hogan.

They may not be able to afford not to, he argues in the firm’s 2025 Look Forward report, citing problems like debilitating inflation, currency debasement, and increasingly crushing fiscal deficits.

That’s just one of the predictions in the asset manager’s annual look at the year ahead. Fidelity's research analysts believe the mainstreaming of stablecoins and tokenization are also in the cards.

Strategic Bitcoin Reserves

“Not making any Bitcoin allocation could become more of a risk to nations than making one,” he said.

While strategic Bitcoin reserves like the one President-elect Donald Trump has promised are still very rare, the U.S., China, the U.K. and Ukraine hold $50 billion in BTC between them, largely from seized assets. But before they can be treated as real strategic reserves, both laws and attitudes will have to change, Hogan said.

“We expect 2025 to be the year this changes for both acceptance and adoption. This is to say, we anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in Bitcoin.”

That said, he also noted that political attention is fickle and other issues could cloud the creation of national Bitcoin reserves.

Evolution of Stablecoins

With $12 trillion in value transferred this year, up from $7 trillion in 2023, stablecoins have many uses, said research analyst Martha Reyes. For one thing, trade volume is surging in the current bull market. That said, they are still not entirely ready for prime time, the report suggests.

“We expect additional measures will be implemented to address counterparty and compliance risks, facilitate integration with traditional payment and lending rails, improve cross-chain interoperability, and meet the demand for yield-bearing assets,” she said.

That said, stablecoins’ utility goes beyond their use in trading cryptocurrencies as they make inroads into the $860 billion remittance market and cross-border payments, as well as provide easy access to dollars in countries with less stable currencies.

Another big use is the burgeoning use of stablecoins in the tokenization of traditional finance (TradFi), as “everything from bonds to equity and funds [is] under consideration—representing tens of trillions of dollars in assets,” according to Reyes.

One example is Ethena’s rollout of a new stablecoin backed by Blackrock’s tokenized Treasury fund, BUIDL.

‘Killer App’

The report predicts that tokenization will be the “killer app” of crypto in 2025. While noting that “tokenization is often seen as a buzzword in the world of blockchain technology,” Hogan argued that “its potential in financial services and beyond is only beginning to be realized.”

With $14 billion in tokenized real-world assets on-chain now, the authors predict there will be $30 billion by the end of the year.

“As institutions increasingly recognize the advantages of utilizing blockchains—including faster, cheaper, and relatively frictionless operability—we anticipate growth in tokenized asset classes could continue to expand,” he said.

While these uses should continue to grow, others will also crop up, he said, pointing to California’s initiative to digitize the titles of 42 million cars on the Avalanche blockchain.