Author: Matt Hougan, Chief Investment Officer of Bitwise; Edited by: 0xjs@Golden Finance
Every year, the Bitwise team gathers to make annual predictions about the future of cryptocurrencies. This process requires a dozen team members to engage in hours of discussion, debate, and reflection. It's one of the most exciting things we do each year.
We will release our 2025 predictions on December 10. Hint: We think 2025 will be crazy. But it's worthwhile to review 2024's performance before we make predictions for next year.
Setting the scene: Looking back at December 2023
First, let's introduce the scenario.
We released our 2024 predictions on December 12, 2023. At that time, cryptocurrencies were in a very different position. Bitcoin was trading at $43,750, and anti-cryptocurrency rhetoric was very strong in Washington, D.C. Just days before we released our 2024 predictions, JPMorgan CEO Jamie Dimon testified at a congressional hearing that he had been 'strongly opposed to cryptocurrencies, Bitcoin, etc.' He then said, 'If I were the government, I would shut it down.'
The progress in 2024 is stunning. Bitcoin's current trading price is close to $100,000, politicians supporting cryptocurrencies dominate Washington, and Wall Street firms are eagerly developing in this space. But none of this was obvious when we made our annual predictions in December 2023.
Let's see how we did.
2024 Prediction 1: The trading price of Bitcoin will exceed $80,000, setting a new all-time high.
Result: Correct
Our prediction was accurate. Bitcoin broke through $80,000 in November and continued to rise, now trading close to $100,000. Our argument at the time—that the approval of the spot Bitcoin ETF and the Bitcoin halving would jointly push prices up—was completely correct.
We will announce our price targets for 2025 next week, along with updated targets for Ethereum and Solana. Stay tuned.
Prediction 2: The spot Bitcoin ETF will be approved and will become the most successful ETF launch ever.
Result: Correct
This is also a victory. The spot Bitcoin ETF approved in January 2024 has become the most successful ETF launch to date. As of December 1, 2024, the Bitcoin ETF has attracted $31 billion in inflows. The previous record for the 'most successful ETF launch in history' was the Invesco QQQ Trust (QQQ), which listed in 1999 and attracted $5 billion in its first year. Gold ETFs attracted less than $2 billion in their first year. The inflows into the Bitcoin ETF are multiples of that number and are still growing.
Prediction 3: Coinbase's revenue will double, exceeding Wall Street expectations (earnings) by at least ten times.
Result: Correct
This will be a close contest. Coinbase had a revenue of $3.1 billion in 2023 and $4.1 billion in the first three quarters of 2024. Will it reach $6.2 billion by the end of the year? I think it can. The fourth quarter is an extraordinary quarter for cryptocurrencies.
Coinbase remains one of the most fascinating companies in the world, and we believe the company is undervalued. Next week, we will also release a series of predictions related to Coinbase.
Prediction 4: Funds settled using stablecoins will exceed those settled using Visa.
Result: Incorrect
In the first six months of 2024, the global settlement amount for stablecoins reached $5.1 trillion, a significant increase from the same period last year. However, they have not yet caught up with Visa, which had a settlement amount of $6.5 trillion during the same period. Close, but not a victory yet.
Prediction 5: As Wall Street prepares to tokenize real-world assets, JPMorgan will tokenize a fund and launch it on-chain.
Result: Incorrect
I really hope this dream comes true. It would be a sweet irony to see JPMorgan (whose CEO once angrily called for Washington to 'shut down' cryptocurrencies) tokenize its own fund.
We are very close to success! Tokenization of funds on Wall Street is a major theme for 2024. BlackRock, Franklin Templeton, Guggenheim, UBS, and Société Générale have all taken steps in this direction. JPMorgan has invested heavily in tokenization, rebranding its own tokenization platform, and calls tokenization the 'next generation of financial infrastructure.' But the company has not actually launched a fund, so we cannot declare victory.
Prediction 6: As users flock to crypto applications, Ethereum's revenue will more than double to $5 billion.
Result: Incorrect
What we said before was quite outrageous. In 2024, activity in Ethereum-based applications saw a significant increase, but year-end revenues might be slightly lower than last year's $2 billion. Why? The 'Dencun' upgrade in March reduced network fees by 99%. We ultimately think this is beneficial for the network, but the short-term hit to revenues is challenging.
Prediction 7: Taylor Swift will launch NFTs to connect with fans in new ways.
Result: Incorrect
This did not happen, but it remains an area to watch in 2025. Reports suggest that Taylor has been concerned about whether NFTs are securities. If we see clearer regulation around NFTs in the coming year, this issue may be back on the agenda.
Prediction 8: AI assistants will use cryptocurrencies for online payments and confirm cryptocurrencies as the 'native currency of the internet.'
Result: Correct
In July, legendary venture capitalist Marc Andreessen donated $50,000 worth of Bitcoin to an AI robot called Truth Terminal. The robot ultimately helped promote a meme coin—Goatseus Maximus (GOAT)—which is currently valued at $674 million. We suspect AI robots will widely use cryptocurrencies and stablecoins in the coming years. Although the GOAT experiment is crazy, it provides an amazing proof of concept.
Prediction 9: As prediction markets become the new 'killer app' for cryptocurrencies, over $100 million will be invested in them.
Result: Correct
This is the one I am most proud of among all our predictions.
In December 2023, few had heard of Polymarket, a cryptocurrency-based prediction market where users can bet on the outcomes of global events. But we are fans of the platform and believe it will take off as the U.S. elections approach. Wow, were we right: the total amount wagered on the platform jumped from $8 million when we predicted it to over $500 million at its peak. Polymarket became a household name in the process. It also proved its remarkable foresight in the 2024 elections.
In our 2025 prediction article, we will forecast the next breakthrough cryptocurrency application.
Prediction 10: A major upgrade to the Ethereum blockchain will reduce average transaction costs to below $0.01, paving the way for more mainstream uses.
Result: Correct
Let me calculate this. The average transaction costs of many Ethereum layer-2 networks have declined by over 90% year-on-year, currently hovering between $0.01 and $0.02. But this summer, it dropped below $0.01, and I believe that with ongoing improvements to the underlying technology, we will soon reach this level again. Transactions below one cent on major blockchains will change the world.
Additional Prediction: By the end of 2024, a quarter of financial advisors will allocate cryptocurrencies in client accounts.
Result: To be determined
Every year, we survey financial advisors to find out how many have clients holding cryptocurrencies. In 2023, only 11% said 'yes.' The survey for the end of 2024 is still ongoing, so we don't yet know if it will reach the 25% level. One potential hurdle is that large banks like Wells Fargo, UBS, and Merrill Lynch have not yet approved spot Bitcoin ETFs. But we believe it's just a matter of time, not if.
Conclusion
So how did we do? Six correct, four wrong, and one pending. Given how aggressive our predictions were—Bitcoin prices doubling, prediction markets skyrocketing, Ethereum fees dropping 99%, all in a rapidly changing field—we’ll take it.
But what’s certain is that our accuracy rate will be higher in 2025. Stay tuned.
