Fidelity Report: Who are the most noteworthy contenders in the crypto market in 2025?

Author: Yogita Khatri, The Block; Compiler: Tao Zhu, Golden Finance

The Ethereum vs. Solana debate continues – focusing on scalability, speed, and decentralization. Fidelity Digital Assets, the cryptocurrency arm of asset management giant Fidelity Investments, said Ethereum has advantages but also acknowledged Solana 's growth.

In its 2025 outlook report, Fidelity highlighted Ethereum 's strong fundamentals, including strong developer activity, total locked value and stablecoin supply. While Solana's revenue and TVL are growing faster, the majority of its revenue comes from memecoin trading, which Fidelity believes is a cyclical trend that thrives in bull markets but fades in bear markets.

Fidelity also noted that Solana’s reliance on memecoin has similarities to Ethereum’s heavy use of Uniswap. However, it believes Ethereum’s fundamentals are less tied to speculation and more stable in the long term. Fidelity said these fundamentals guide long-term investors but may not predict short-term performance.

" Short-term price trends often revolve around narratives, and Solana may be the more compelling contender in this regard in 2025 given the planned upgrades to both networks," Fidelity said.

Solana's Firedancer upgrade aims to significantly increase transaction speeds, while Ethereum's Prague/Electra (Pectra) upgrade focuses on improving functionality, scalability, and user security. However, Fidelity noted that the Pectra upgrade may not spark excitement in the community because it will not directly impact Ethereum’s value proposition from an investment perspective.

Fidelity said that because Ethereum is available through exchange-traded products, it currently has a clear advantage over Solana, although this may change based on regulatory decisions. It added that such decisions could strengthen Ethereum’s position or level the playing field, making it a key factor to watch in 2025.

Fidelity said that despite Solana 's short-term momentum, its performance could be positive for Ethereum in the long term, just as Solana's underperformance until 2024. As the bull run continues, investors are expected to focus more on fundamentals, which may shift attention back to Ethereum.

Fidelity’s view on Bitcoin

In the 2025 Outlook report, Fidelity Digital Assets also shared its outlook for Bitcoin, saying that Bitcoin may still be a valuable asset in various economic scenarios in 2025.

Fidelity also expects more governments, central banks and sovereign wealth funds to add Bitcoin to their treasuries in 2025, following the example of Bhutan and El Salvador. It said: “Faced with challenges such as inflation, currency devaluation and growing fiscal deficits, not having any Bitcoin allocation may be more risky to the country than having a Bitcoin allocation.”

About Stablecoins, Tokenization and DeFi

Fidelity acknowledged the meteoric growth of stablecoins but noted that they are not yet perfect products. It looks forward to taking further steps to address compliance risks, improve cross-chain interoperability and integrate with traditional financial systems. The report states that stablecoins can coexist with tokenized bank deposits and increase the efficiency of tokenized securities trading while maintaining the U.S. dollar’s ​​status as the global reserve currency.

Fidelity also calls tokenization the “killer” app of 2025. The company said the notional value of on-chain tokenized real-world assets has grown from $8 billion in 2023 to $14 billion and is expected to reach $30 billion by 2025. Fidelity added: “As institutions increasingly recognize the benefits of leveraging blockchain – including faster, cheaper and relatively frictionless operability – we expect growth in the tokenized asset class is likely to continue expand."

Fidelity said DeFi is also expected to continue to innovate in 2025, with growth in the areas of dedicated blockchains, decentralized social media, decentralized physical infrastructure networks (DePIN) and cryptographic artificial intelligence.

'It's not too late' to get into cryptocurrencies

Fidelity believes mainstream cryptocurrency adoption will grow this year and says it's "not too late" for investors to get into the space, despite Bitcoin's recent topping $100,000.

“In fact, we believe we may be entering the dawn of a new era of digital assets that will last for years — even decades,” Fidelity said. “This era is likely to see digital assets permeate every sector – industries, technologies, sectors, balance sheets, and even nation-states.”