Long wary of the crypto space, major financial institutions are now eyeing the stablecoin sector, which surpassed a market capitalization of $200 billion in December 2024, according to CCData’s Stablecoins & CBDCs report. This represents a 5.51% increase for the month, underscoring the sector's resilience and growth potential.

Banks Step Into Stablecoins

Tether’s withdrawal from European markets, prompted by compliance with the EU’s Markets in Crypto-Assets (MiCA) legislation, has created opportunities for banks to fill the void. Société Générale-Forge has already made its euro-backed stablecoin available to retail investors. Other institutions, including Oddo BHF SCA, Revolut, and AllUnity—a venture involving Deutsche Bank-owned DWS—are preparing to launch their own euro-denominated stablecoins in 2025.

BBVA is also reportedly working on its entry into the sector, signaling a growing institutional interest in stablecoin innovation.‍

Market Trends and Investments

Beyond stablecoins, the broader market is seeing increased institutional engagement. Tether has been accumulating bitcoin, capitalizing on prices below $100,000, while spot Ether exchange-traded funds (ETFs) attracted $2.6 billion in December 2024, according to Farside Investors. However, this pales in comparison to the $35 billion net inflows into spot bitcoin ETFs over the past year.

Blockchain security firms also reported a sharp decline in crypto scam losses during December 2024, marking the lowest monthly total of the year.‍

Memecoins Lead 2024 Performance

The memecoin sector outperformed all other asset baskets in 2024, delivering a remarkable 371% annual return, driven by tokens like DOGE, SHIB, and BONK. According to CCData, speculative interest in memecoins remains robust, with momentum expected to continue into 2025.

Exchange tokens (+60.6%) and Layer-1 coins (+44.2%) also posted strong returns, reflecting renewed retail interest in established blockchain networks. Meanwhile, real-world asset (RWA) tokens (+41.8%) benefited from growing institutional focus on tokenization, and AI tokens (+38.7%) gained traction amid advancements in AI infrastructure.

In contrast, Layer-2 solutions struggled, recording a -24.4% return as competition from alternative Layer-1 ecosystems like Solana and SUI intensified. DeFi and staking protocols also faced headwinds, ending the year with losses of -12.5% and -34.6%, respectively.

With catalysts such as institutional investment, regulatory clarity, and technological advancements on the horizon, 2025 could further cement digital assets as a cornerstone of global finance.