Original authors: Matt Hougan & Ryan Rasmussen, Bitwise.
Compiled by: Yuliya, PANews.
The year 2024 will be a milestone for the cryptocurrency market. Bitcoin skyrocketed to an all-time high of $103,992 (up 141.72% year-to-date as of the time of writing), largely due to the record issuance of the U.S. spot Bitcoin ETF, which attracted $33.56 billion in assets. Other major crypto assets also saw significant gains: Solana up 127.71%, XRP up 285.23%, Ethereum up 75.77%. Meanwhile, cryptocurrency-related stocks like MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record prices are not the only noteworthy development. Cryptocurrencies are significantly gaining ground in the 2024 U.S. elections, making the regulatory outlook for cryptocurrencies in the U.S. brighter. Elected President Trump supports cryptocurrencies during his campaign, promising to establish a strategic Bitcoin reserve and restructure the SEC (which has traditionally taken a hostile stance towards cryptocurrencies). He also nominated Scott Bessent as Secretary of the Treasury, who has stated, 'Cryptocurrency represents freedom; the crypto economy will endure long-term.' As we enter 2024, Congress also shows a clear inclination to support cryptocurrencies, with pro-crypto candidates defeating opponents in several key elections. Supportive legislation for cryptocurrencies is expected to be seen in the coming months.
With global stimulus policies from China and other major central banks, increasing institutional adoption, and rapid improvements in blockchain technology, the outlook for 2025 appears quite bright.
TL;DR.
01: Bitcoin, Ethereum, and Solana will reach new all-time highs, with Bitcoin trading above $200,000.
02: Inflows into Bitcoin ETFs in 2025 will exceed those in 2024.
03: Coinbase will surpass Charles Schwab to become the most valuable brokerage globally, with its stock price exceeding $700.
04: 2025 will be the 'Year of Cryptocurrency IPOs', with at least five crypto unicorns going public in the United States.
05: Tokens issued by AI agents will lead to a larger meme coin craze than in 2024.
06: The number of countries holding Bitcoin will double.
07: Coinbase will enter the S&P 500, and MicroStrategy will enter the NASDAQ 100, adding cryptocurrency exposure to (almost) every U.S. investor's portfolio.
08: The U.S. Department of Labor will relax guidance on cryptocurrency restrictions in 401(k) plans, allowing hundreds of billions of dollars to flow into crypto assets.
09: With the U.S. passing long-awaited stablecoin legislation, the asset size of stablecoins will double to $400 billion.
10: As Wall Street deepens its acceptance of cryptocurrencies, the value of real-world asset (RWA) tokenization will exceed $50 billion.
Additional prediction: by 2029, Bitcoin will surpass the $18 trillion gold market, with trading prices exceeding $1 million each.
Prediction 1: Bitcoin, Ethereum, and Solana will reach new all-time highs, with Bitcoin surpassing $200,000.
The three giants of cryptocurrency - Bitcoin, Ethereum, and Solana - outperformed all major asset classes in 2024, with increases of 141.72%, 75.77%, and 127.71%, respectively. In contrast, the S&P 500 index rose 28.07%, gold rose 27.65%, and bonds rose 3.40%.
This momentum is expected to continue into 2025, with Bitcoin, Ethereum, and Solana reaching new all-time highs. The specific target prices are as follows:
Bitcoin: $200,000.
Record ETF inflows drive Bitcoin to new highs in 2024.
This trend is expected to continue.
The halving in April 2024 will reduce new supply.
New buying demand from corporations and governments.
If the U.S. government implements the proposal to establish a strategic reserve of 1 million Bitcoins, prices could reach $500,000 or higher.
Ethereum: $7,000.
Despite an increase of 75.77% in 2024, Ethereum's attention among investors has declined.
The narrative is expected to change in 2025.
Driving factors include:
Acceleration of activity in Layer 2 blockchains (like Base and Starknet).
The spot Ethereum ETF will attract billions of dollars in inflows.
Massive growth of stablecoin and tokenization projects on Ethereum.
Solana: $750.
Strong recovery in 2024 driven by meme coin frenzy.
Momentum is expected to continue to strengthen.
Catalysts in 2025 will be the migration of 'serious' projects to the network.
There are early cases, such as the migration of the Render project.
This trend is expected to accelerate in the coming year.
Catalysts.
Increased institutional investment.
Corporations continue to buy.
Investment banks approve cryptocurrency businesses.
U.S. Strategic Bitcoin Reserve Program.
Better regulatory and political environment.
Bitcoin halving leads to tightened supply.
Layer-2 scaling solutions.
Macro tailwinds (interest rate cuts, Chinese stimulus policies).
Increased allocation ratios (3% becomes the new 1% standard).
Potential downsides.
Disappointing policies from Washington.
Risk of leveraged liquidation.
Government sell-offs.
Failure of the meme coin craze.
Interest rate cuts not meeting expectations.
Prediction 2: In 2025, inflows into Bitcoin ETFs will exceed those in 2024.
When the U.S. spot Bitcoin ETF launches in January 2024, ETF experts predict that the product group will attract $5 billion to $15 billion in inflows in the first year. In fact, it exceeded the upper limit of the expected range within the first six months. Since its launch, these record-breaking ETFs have attracted $33.6 billion in inflows. Inflows in 2025 are expected to exceed this figure. Three supporting reasons for this prediction:
1. The first year is typically the slowest for ETFs.
The best historical analogy for Bitcoin ETFs is the launch of the gold ETF in 2004.
That year, the gold ETF attracted $2.6 billion in inflows, which was exciting.
But the situation in the following years (figures adjusted for inflation):
Year 2: $5.5 billion.
Year 3: $7.6 billion.
Year 4: $8.7 billion.
Year 5: $16.8 billion.
Year 6: $28.9 billion.
The key is: the second year's inflows exceeding the first year aligns with the development pattern of the gold ETF. A decrease in inflows would actually be unusual.
2. Major investment banks are joining.
The world's largest investment banks (including Morgan Stanley, Merrill Lynch, Bank of America, and Wells Fargo) have yet to unleash the power of their wealth management teams.
These wealth managers currently have virtually no access to these products.
This situation is expected to change in 2025.
Trillions of dollars managed by these companies will begin to flow into Bitcoin ETFs.
3. Investors are gradually increasing their allocations - moving from 1% to 3% has become a new trend.
Bitwise has observed a distinct pattern over the past seven years as it has helped investment professionals enter the cryptocurrency market:
Most investors start with small allocations and then gradually increase over time.
Investors buying Bitcoin ETFs in 2024 are expected to double their investments in 2025.
Prediction 3: Coinbase will surpass Charles Schwab to become the most valuable brokerage globally, with its stock price exceeding $700.
At the beginning of 2023, investors could purchase Coinbase stock for $35. Today, its share price has risen to $344, nearly a tenfold increase. Predictions indicate that this price may continue to rise, and the extent could be substantial.
Prediction: Coinbase stock will surpass $700 in 2025 (more than double the current price). This will make Coinbase the most valuable brokerage globally, surpassing Charles Schwab.
The reason is: Coinbase is not just a brokerage.
Three main catalysts driving its development:
1. Stablecoin business.
Thanks to the agreement with USDC issuer Circle, Coinbase's stablecoin business is thriving.
Year-to-date, stablecoin revenue has increased by $162 million (+31%).
If the growth trajectory of stablecoins aligns with expectations, this trend will continue.
2. Base network.
Last year, Coinbase launched a new Layer 2 network called Base based on Ethereum.
It currently ranks first in both trading volume and total locked value among L2 networks.
With growth comes considerable revenue.
Base now generates tens of millions of dollars in revenue each quarter.
As more developers, users, and capital flow into the ecosystem, this revenue is expected to grow further.
3. Staking and custody services.
As of the third quarter, these two businesses generated $589 million in revenue.
This is an increase of $304 million (+106%) compared to the same period last year.
Both businesses are driven by asset balances and net new asset inflows.
These two indicators are expected to increase significantly in 2025.
Annual revenues for these business lines are expected to exceed $1 billion.
Prediction 4: 2025 will be the 'Year of Cryptocurrency IPOs', with at least five crypto unicorns going public in the United States.
The past few years have seen relatively quiet IPOs in the cryptocurrency sector. However, 2025 is expected to usher in a wave of IPOs for crypto unicorns.
Why now?
The background of currently listed cryptocurrency companies is significantly different from previous years:
Rising cryptocurrency prices.
Increasing investor demand.
Surge in institutional adoption.
Blockchain technology has become mainstream.
Macro environment favorable.
Most importantly, the political environment has warmed up.
These factors collectively create favorable conditions for industry giants to go public.
Top five candidates for potential IPOs in 2025:
1. Circle.
Issuer of USDC (one of the largest stablecoins).
Has been actively preparing for an IPO.
Strong position in the stablecoin market.
Expanding into new financial service areas.
2. Figure.
Known for providing various financial services utilizing blockchain technology.
Provides loan, personal loan, and asset tokenization services.
Exploring IPO possibilities since 2023.
With Wall Street's increasing focus on tokenization, the timing may be ripe.
3. Kraken.
One of the largest cryptocurrency exchanges in the U.S.
Considering IPO since 2021.
Plans postponed due to market conditions.
May regain development momentum in 2025.
4. Anchorage Digital.
Providing digital asset infrastructure services.
Diverse client base, including investment advisors, asset managers, and venture capital firms.
Holds federal charter bank qualifications.
Comprehensive crypto services may prompt them to seek an IPO.
5. Chainalysis.
Market leader in blockchain compliance and intelligence services.
Unique service offerings.
Good growth trajectory.
With the increasing emphasis on compliance in the crypto industry, it is highly likely to enter the public market.
Prediction 5: Tokens issued by AI agents will lead to a larger meme coin craze than in 2024.
A larger meme coin craze is expected in 2025 than in 2024, with tokens issued by AI agents becoming the leaders of this wave.
GOAT case: The first collision of AI and meme coins.
An intriguing case comes from the interaction between a16z's Marc Andreessen and the autonomous chatbot Truth Terminal. The AI agent promoted a niche meme coin called GOAT, which started as an experimental project and eventually surpassed a market cap of $1.3 billion, showcasing the immense potential of the combination of AI and meme coins.
Clanker: Pioneering AI token issuance platform.
Clanker, as an innovative platform, enables autonomous token deployment on Coinbase's Layer 2 scaling solution, Base.
Users only need to tag Clanker on Farcaster and provide the token name and image for the AI agent to automatically complete the token deployment.
In just one month after launch, Clanker has issued over 11,000 tokens and generated over $10.3 million in fee revenue.
Future outlook.
Tokens issued by AI are expected to drive a new wave of meme coin craze in 2025. Although these tokens may lack real application value and most will likely end up at zero, they represent the fusion of two groundbreaking technologies: AI and cryptocurrency, a direction of innovative development that will continue to attract market attention.
Prediction 6: The number of countries holding Bitcoin will double.
U.S. strategic reserve prospects.
There is still uncertainty about whether the U.S. will establish a Bitcoin strategic reserve by 2025. However, there are positive signals:
Wyoming Republican Senator Cynthia Lummis proposed a bill suggesting that the U.S. purchase 1 million Bitcoins within five years.
Incoming President Trump supports this proposal.
However, according to Polymarket's predictions, this possibility is less than 30%.
Global competitive landscape.
The very act of the U.S. considering establishing a strategic Bitcoin reserve has triggered a chain reaction globally.
Legislators from Poland to Brazil are proposing bills to establish national Bitcoin strategic reserves.
Governments are accelerating their plans to avoid missing the opportunity.
Current status and future outlook.
According to BitcoinTreasuries.net:
Currently, nine countries globally hold Bitcoin, with the U.S. in the lead.
This number is expected to double by 2025.
Prediction 7: Coinbase will enter the S&P 500, and MicroStrategy will enter the NASDAQ 100.
Coinbase and MicroStrategy, two major publicly listed companies in the cryptocurrency space, will be included in mainstream stock indices, meaning that almost all U.S. investors' portfolios will gain exposure to the cryptocurrency sector.
Market status.
Ordinary American investors currently have no exposure to cryptocurrencies.
Cryptocurrency, as an emerging asset class, is either poorly understood or actively avoided by many investors.
However, almost every investor holds funds that track the S&P 500 or NASDAQ 100.
Many investors hold both types of index funds simultaneously.
Potential impact.
Once these two companies are included in the index, there will be a huge market impact:
Approximately $10 trillion in assets directly track the S&P 500 index.
An additional $6 trillion in assets benchmarked against this index.
Expected inflows into Coinbase after being included in the index:
Index funds will need to buy approximately $15 billion in stock.
Benchmark funds could bring an additional $9 billion in buy demand.
Although MicroStrategy's impact is relatively small due to the smaller tracking fund size for the NASDAQ 100, it will still have a significant effect.
Prediction 8: The U.S. Department of Labor will relax guidance on cryptocurrency restrictions in 401(k) plans.
In March 2022, the U.S. Department of Labor issued guidance warning 401(k) plan fiduciaries to be aware of the significant risks of cryptocurrency investment options and announced an investigation project to protect plan participants from these risks.
With the arrival of a new administration in Washington, the Department of Labor is expected to relax this strict guidance. The importance of this policy change can be seen in the data:
U.S. 401(k) plans currently manage $8 trillion in assets.
These funds continuously receive new weekly inflows.
If the allocation ratio for cryptocurrencies reaches:
1%: This will bring $80 billion in new funds to the cryptocurrency sector.
3%: This will bring $240 billion in new funds.
Prediction 9: Stablecoin assets will double to $400 billion as the U.S. passes long-awaited stablecoin legislation.
In 2025, the stablecoin market will see prosperity, with a market cap reaching $400 billion or higher. This growth will be driven by the following key factors:
Stablecoin legislation.
Pro-crypto policymakers in Washington are most likely to achieve their goals through comprehensive stablecoin legislation. This will address important questions, including who will regulate and what the appropriate reserve requirements are. Clear regulations will spark enormous interest from issuers, consumers, and businesses. Major traditional banks like JPMorgan are expected to enter this field.
Fintech integration.
Stripe acquired the stablecoin platform Bridge for $1.1 billion, stating that stablecoins have become 'the superconductor of financial services' due to their speed, accessibility, and low cost. PayPal launched its own stablecoin (PYUSD) in 2023, and Robinhood recently announced plans to collaborate with several cryptocurrency companies to launch a global stablecoin network. As stablecoins integrate into popular fintech applications, the assets managed and transaction volumes of stablecoins will significantly increase.
Global trade and remittances.
In 2024, stablecoin transaction volume will reach $8.3 trillion, close to Visa's $9.9 trillion payment volume for the same period. Stablecoin giant Tether recently provided financing for a $45 million crude oil transaction through its USDT stablecoin. As the digital dollar continues to disrupt these massive markets, demand for stablecoins will continue to grow.
Bull market growth.
As the most obvious catalyst, the overall expansion of the cryptocurrency market will drive the growth of stablecoin managed assets. The cryptocurrency market is bullish in 2025, and the stablecoin market will grow alongside it.
Prediction 10: As Wall Street accelerates its entrance, the scale of RWA tokenization will surpass $50 billion.
Three years ago, the cryptocurrency industry had tokenized less than $2 billion of real-world assets (RWAs), including private credit, U.S. debt, commodities, and stocks. Today, this market size has reached $13.7 billion.
The significant growth of tokenization is primarily due to its clear advantages: it offers instant settlement, costs far lower than traditional securitization, and 24/7 liquidity, while providing transparency and accessibility to almost all asset classes.
BlackRock CEO Larry Fink has transformed from a former Bitcoin skeptic to a staunch supporter of tokenization, stating that 'security tokenization will be the next generation of market form.' This statement from the head of the world's largest asset management company is significant.
Wall Street has only just begun to recognize this, meaning a massive influx of institutional funds could soon flow into the tokenization of RWAs.
By 2025, the market size for tokenized RWAs is expected to reach $50 billion and could potentially grow exponentially from there.
Venture capital firm ParaFi recently predicted that by the 2030s, the market size of tokenized RWAs could grow to $2 trillion, while the Global Financial Markets Association predicts it could reach $16 trillion.
Additional prediction: by 2029, Bitcoin will surpass the $18 trillion gold market, with a price exceeding $1 million.
While people often tend to make one-year predictions, the long-term outlook for Bitcoin appears even more promising.
By 2029, Bitcoin's market value is expected to exceed that of the gold market. Based on gold's current market value, this means the price of each Bitcoin will break through $1 million.
There is a reason for choosing 2029 as the time point: Bitcoin has historically operated on a four-year cycle. While this pattern may not necessarily continue, 2029 will mark the peak of the next cycle (and also the 20th anniversary of Bitcoin's birth). Surpassing the gold market within 20 years of its inception is undoubtedly a significant achievement, but Bitcoin is expected to accomplish this.
It is noteworthy that if the U.S. announces the purchase of 1 million Bitcoins to establish a strategic reserve, the time for Bitcoin prices to exceed $1 million may come much earlier.
