Could 2025 Be the Year of the Stablecoin?

• Blockchain Council
• January 22, 2025

A report on the future of Bitcoin in 2025 has suggested that it could be a tipping point year, in which the currency becomes globally accepted. This will see it become a mainstay of many federal governments. A further result of this could be that it is also a year that sees stablecoins become more widely used. 

A stablecoin is a form of cryptocurrency. Its price is pegged to that of a fiat currency or asset. As these rise or fall in value, so does the price of the stablecoin. They have proven popular as they can hedge against the volatility inherent in other forms of cryptocurrency. Their supply is controlled by collateral assets or an algorithm. It is estimated that they have a market cap of $162 billion.

Bitcoin in 2025

After an impressive year in 2024, stablecoins are predicted to be used even more. If their use can come with further measures to ensure compliance with traditional financial systems, they could mature further. However, this will also need some adaptation to traditional systems and further interoperability.

All of this could be further enhanced by more and more companies choosing Bitcoin as their prime asset for reserves. It is estimated that over 1 million bitcoins are held in the treasuries of private and public companies. Some are even adopting a Bitcoin-first approach, where most of the organizations held funds are in Bitcoin as opposed to other means. Companies such as the Singapore-based Genius Group, primarily involved in education technology, are one such company. This upped their holdings to 50% last year. This move then saw a subsequent push in their stock price, surging by 11%. The company even released a statement of intent in regard to Bitcoin, as it said how it aims to bridge the gap between decentralized and traditional finance. This is just one of many companies taking Bitcoin adoption very seriously.

Bitcoin’s further adoption is being led not just by those in the crypto community but also by more traditional financial investors. Mark Cuban is one person who has spoken vocally about it, giving it credence to the general public. He recently came out and said that he would rather own Bitcoin if something bad happened to the economy because he thinks it has more value than gold.

He also added that many people who hold Bitcoins see it as a huge store of value. This has been echoed in recent record highs for the currency. This Bitcoin price chart shows it trajectory over the last few months, reaching a record high. He believes people see it as an option in the event of the economy going down or something bad happening. In his interview with Wired, he also pressed that people look at Bitcoin as a better version of gold, and he agrees with that.

Bitcoin for Hedging

In investing circles, this is known as hedging. It involves holding an asset that will retain value in the face of economic uncertainty. Gold is the typical one used for this purpose. The only major problem with gold is that it needs to be stored physically. In large amounts, this is just impractical. It also needs to be exchanged in some form for fiat currencies. Cuban’s argument was that as it can be broken down, transferred easily, and has more liquidity, it is more valuable.

Their are also risks posed for those not adopting Bitcoin and looking into the use of stablecoins in business. This could include rising inflation on top of already spiraling levels. Another is the devaluation of money and the possible ramifications of stagflation. This is an economic condition characterized by slow growth and a high unemployment rate. When combined with rising levels of inflation, it builds an unfavorable global economic climate. Although it was once thought impossible, it has happened multiple times since the seventies.

Bitcoin’s performance will be determined by the reaction of global economies in the face of this stagflationary period. If it is counteracted with increased spending, then it could do well for Bitcoin. However, if it is managed with reduction measures such as high interest rates, investors will be more likely to head for traditionally safer assets, reducing the value of Bitcoin. Stabelcoins could be a key factor in this economic recovery.

US-Based Bitcoin Miners Are 25% of the Global Network

In the closing months of 2024, Bitcoin entered a huge bull run. It reached record highs before tailing off somewhat. At the same time, around 25.3% of all Bitcoin miners were US-listed in the month of December alone. In this month, Bitcoin rose in profit, and so did mining it, increasing yields by 15%. This was faster than an increase in the network hash rate, which was 6.5% higher than usual. This shows the sentiment for Bitcoin in the country.

A hash rate is the power required to mine and process Bitcoin on a blockchain. Altogether, US companies mined 3,602 bitcoins in the month, as opposed to 3,404 the previous month. Mara was the biggest miner of Bitcoin, creating 890 tokens. They are the largest company in the sector, followed by CleanSpark.

At the time of writing, Bitcoin has neared $95,000 after a small slump in the US. It is down 10% from the weekly high of $120,000. This has been seen to have scuppered plans for a Bitcoin rally. Data also shows that those who have held Bitcoin for a period of less than six months are now selling at a loss. In the past, this has usually been followed by price recoveries. All of this signals that now could be a great time to buy. During these loss periods for short-term investors, it is a great time to accumulate.

Many investors are awaiting data from US non-farm payrolls before making decisions. Better numbers signal a stronger economy, in which interest rates go up. This is usually bad for Bitcoin and other cryptocurrencies, as people seek more stable assets to invest in. This was seen in midweek data, which caused the slump in the US.

Undoubtedly, 2025 will be a key year for Bitcoin. If it does see more tradfi integration, particularly through the use of stablecoins, Bitcoin will only rise in value. However, this does not mean it will lose its volatility, and investors must embrace this. Much of where this price goes will be determined by global economic factors, so it pays to keep an eye on current events.