Original authors: Matt Hougan, Ryan Rasmussen, Bitwise
Original translation by: Yuliya, PANews
2024 is a milestone year for the cryptocurrency market. Bitcoin soared to a historic high of $103,992 (as of writing, up 141.72% year-to-date), primarily driven by the record issuance of the U.S. spot Bitcoin ETF, which attracted $33.56 billion in assets. Other major crypto assets also saw significant increases: Solana rose 127.71%, XRP rose 285.23%, and Ethereum rose 75.77%. Meanwhile, crypto-related stocks like MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record prices are not the only noteworthy development. Cryptocurrencies are clearly gaining an edge in the 2024 U.S. elections, which brightens the regulatory outlook for cryptocurrencies in the U.S. Elected President Trump supports cryptocurrencies during his campaign, promising to establish a Bitcoin strategic reserve and reorganize the SEC (which has historically been hostile towards cryptocurrencies). He also nominated Scott Bessent as Treasury Secretary, who has stated, 'Cryptocurrencies represent freedom, and the crypto economy will exist for the long term.' As we enter 2024, Congress also shows a clear tendency 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 the global stimulus policies from China and other major central banks, the growing institutional adoption rate, and the rapid improvement of blockchain technology, the outlook for 2025 appears quite bright.
TL;DR
01: Bitcoin, Ethereum, and Solana will hit 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 world's most valuable brokerage, with its stock price exceeding $700.
04: 2025 will be the 'Year of Crypto IPOs,' with at least five crypto unicorns going public in the U.S.
05: Tokens issued by AI agents will lead to a larger Meme coin craze in 2024.
06: The number of countries holding Bitcoin will double.
07: Coinbase will enter the S&P 500 index, MicroStrategy will enter the Nasdaq 100 index, adding cryptocurrency exposure to (almost) every American investor's portfolio.
08: The U.S. Department of Labor will relax its guidance on cryptocurrency in 401(k) plans, leading to hundreds of billions of dollars flowing into crypto assets.
09: With the U.S. passing long-awaited stablecoin legislation, the scale of stablecoin assets 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 forecast: By 2029, Bitcoin will surpass the $18 trillion gold market, with a trading price exceeding $1 million
Forecast 1: Bitcoin, Ethereum, and Solana will hit all-time highs, with Bitcoin exceeding $200,000
The three giants of cryptocurrency—Bitcoin, Ethereum, and Solana—outperformed all major asset classes in 2024, increasing by 141.72%, 75.77%, and 127.71%, respectively. In comparison, the S&P 500 index rose by 28.07%, gold increased by 27.65%, and bonds rose by 3.40%.
This momentum is expected to continue into 2025, with Bitcoin, Ethereum, and Solana all setting new all-time highs. 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 April 2024 halving 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, the price could reach $500,000 or higher
Ethereum: $7,000
· Despite rising 75.77% in 2024, Ethereum's attention among investors has declined
· The narrative is expected to change in 2025
· Driving factors include:
- Layer 2 blockchain (such as Base and Starknet) activity accelerates
- Spot Ethereum ETF will attract billions of dollars in inflows
- Large-scale growth of stablecoin and tokenization projects on Ethereum
Solana: $750
· Strong recovery driven by the Meme coin frenzy in 2024
· Momentum is expected to continue strengthening
· The 2025 catalyst 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 a tighter supply
· Layer-2 scaling solutions
· Macroeconomic benefits (interest rate cuts, China’s stimulus policies)
· Increased allocation ratios (3% becomes the new 1% standard)
Potential adverse factors
· Disappointing policies from Washington
· Leverage liquidation risk
· Government sell-offs
· Meme coin craze failure
· Interest rate cuts not meeting expectations
Forecast 2: Inflows into Bitcoin ETFs in 2025 will exceed those in 2024
When the U.S. spot Bitcoin ETF launches in January 2024, ETF experts predict that this product group will attract $5 to $15 billion in inflows in its first year. In fact, the upper limit of this range has already been exceeded within the first six months since launch. Since its inception, these record-breaking ETFs have attracted $33.6 billion in inflows. Inflows for 2025 are expected to surpass this figure. Three supporting reasons for this prediction:
1. The first year is usually the slowest year for ETFs
· The best historical analogy for Bitcoin ETFs is the launch of gold ETFs in 2004
· Gold ETFs attracted $2.6 billion in inflows that year, which was exciting
· But the situation in the following years (the numbers have been 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: inflows in the second year exceeding those in the first year align with the development pattern of gold ETFs, while decreasing inflows would be unusual.
2. Major investment banks are joining
· The world's largest investment banks (including Morgan Stanley, Merrill, Bank of America, and Wells Fargo) have not yet unleashed the power of their wealth management teams
· These financial managers currently have little access to these products
· This situation is expected to change in 2025
· The trillions of dollars managed by these companies will begin to flow into Bitcoin ETFs
3. Investors are gradually increasing their allocation—1% becoming 3% is becoming a new trend
Bitwise has observed a clear pattern over the past seven years as it helps investment professionals enter the cryptocurrency market:
· Most investors start with small allocations and gradually increase over time
· It is expected that most investors purchasing Bitcoin ETFs in 2024 will double their investments in 2025
Forecast 3: Coinbase will surpass Charles Schwab to become the world's most valuable brokerage, with its stock price exceeding $700 per share
At the beginning of 2023, investors could buy Coinbase stock for $35. Today, its stock price has risen to $344, nearly a tenfold increase. Predictions show this price could continue to rise, potentially significantly.
Forecast: Coinbase stock will exceed $700 in 2025 (more than doubling from the current price). This will make Coinbase the world's most valuable brokerage, surpassing Charles Schwab.
The reason is that Coinbase is not just a brokerage.
Three major catalysts driving its development:
1. Stablecoin business
· Thanks to an agreement with USDC issuer Circle, Coinbase's stablecoin business is thriving
· Year-to-date, stablecoin revenue has grown by $162 million (+31%)
· If the trajectory of stablecoin development meets expectations, this trend will continue
2. Base network
· Last year, Coinbase launched a new Layer 2 network based on Ethereum called Base
· Currently leads in both trading volume and total locked value among L2 networks
· Along with growth comes substantial revenue
· Base now generates tens of millions of dollars in revenue each quarter
· With more developers, users, and capital flowing 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
· Increased by $304 million (+106%) compared to the same period last year
· Both businesses are driven by asset balances and net new asset inflows
· Both metrics are expected to significantly increase in 2025
· These business lines are expected to exceed $1 billion in annual revenue
Forecast 4: 2025 will be the 'Year of Crypto IPOs,' with at least five crypto unicorns going public in the U.S.
In recent years, the cryptocurrency IPO space has been relatively quiet. However, 2025 is expected to usher in a wave of IPOs for crypto unicorns.
Why now?
The context for currently listed cryptocurrency companies is significantly different from previous years:
· Cryptocurrency prices are rising
· Increased investor demand
· Surge in institutional adoption
· Blockchain technology has become mainstream
· Favorable macro environment
· 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
· USDC (one of the largest stablecoins) issuer
· Has been actively preparing for an IPO
· Strong position in the stablecoin market
· Expanding into new financial services
2. Figure
· Known for providing various financial services using blockchain technology
· Providing mortgage, 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 an IPO since 2021
· Plans delayed due to market conditions
· May regain momentum in 2025
4. Anchorage Digital
· Providing digital asset infrastructure services
· Diverse client base, including investment advisors, asset managers, and venture capital firms
· Obtained federal charter bank qualifications
· Comprehensive crypto services may prompt it to seek an IPO
5. Chainalysis
· Market leader in blockchain compliance and intelligence services
· Unique service offerings
· Good growth trajectory
· With the increasing importance of compliance requirements in the crypto industry, it is highly likely to enter the public market
Forecast 5: Tokens issued by AI agents will lead to a larger Meme coin craze in 2024
It is expected that in 2025, there will be a larger-scale Meme coin craze than in 2024, with tokens issued by AI agents leading this trend.
GOAT Case: The first collision of AI and Meme coins
A striking 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 ultimately surpassed a market cap of $1.3 billion, fully demonstrating the enormous potential of the combination of AI and Meme coins.
Clanker: A groundbreaking AI token issuance platform
Clanker, as an innovative platform, implements autonomous token deployment on Coinbase's Layer 2 scaling solution, Base.
Users simply need to tag Clanker on Farcaster and provide the token name and image, and the AI agent can automatically complete the token deployment.
Within just a month of launching, Clanker has issued over 11,000 tokens, generating 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 practical application value and most may eventually go to zero, they represent the fusion of two breakthrough technologies: AI and cryptocurrency, which will continue to attract market attention.
Forecast 6: The number of countries holding Bitcoin will double
Prospects for U.S. strategic reserves
There remains uncertainty over whether the U.S. will establish a Bitcoin strategic reserve in 2025. However, there are positive signals:
· Wyoming Republican Senator Cynthia Lummis introduced a bill proposing that the U.S. purchase 1 million Bitcoins within five years
· Incoming President Trump expressed support for this proposal
· But according to Polymarket's predictions, this possibility is below 30%
Global competitive landscape
· The U.S. consideration of establishing a Bitcoin strategic reserve has already triggered a global chain reaction:
· Legislators from Poland to Brazil are introducing proposals to establish national Bitcoin strategic reserves
· Governments are accelerating their efforts to avoid missing opportunities
Current status and future outlook
According to data from BitcoinTreasuries.net:
· Currently, nine countries around the world hold Bitcoin, with the U.S. leading
· This number is expected to double by 2025
Forecast 7: Coinbase will enter the S&P 500, MicroStrategy will enter the Nasdaq 100
Major publicly listed companies in the cryptocurrency space, Coinbase and MicroStrategy, will be incorporated into mainstream stock indices, meaning that nearly every American investor's portfolio will gain exposure to the cryptocurrency space.
Market status
· Ordinary American investors currently have no exposure to cryptocurrencies
· As an emerging asset class, many investors either do not understand cryptocurrencies or actively choose to avoid them
· But nearly every investor holds funds tracking the S&P 500 or Nasdaq 100
· Many investors hold both types of index funds simultaneously
Potential impact
Once these two companies are incorporated into the index, there will be a massive market impact:
· About $10 trillion in assets directly track the S&P 500 index
· Another $6 trillion in assets benchmarked against this index
· Expected inflows after Coinbase is included in the index:
- Index funds need to purchase approximately $15 billion in stocks
- Benchmark funds could bring an additional $9 billion in buying demand
· MicroStrategy will have a significant impact despite having a relatively small influence due to the smaller size of tracking funds for the Nasdaq 100
Forecast 8: The U.S. Department of Labor will relax its guidance on cryptocurrency in 401(k) plans
In March 2022, the U.S. Department of Labor issued guidance warning 401(k) plan fiduciaries about the significant risks of cryptocurrency investment options and announced the initiation of an investigation project to protect plan participants from these risks.
With the arrival of the new government in Washington, it is expected that the Department of Labor will relax this strict guidance. The importance of this policy change can be seen from the data:
· The U.S. 401(k) plans currently manage $8 trillion in assets
· These funds continue to receive weekly new capital injections
· If the allocation ratio for cryptocurrencies reaches:
-1%: Will bring $80 billion in new funds to the cryptocurrency space
-3%: Will bring in $240 billion in new funds
Forecast 9: Stablecoin assets will double to $400 billion, and the U.S. will pass long-awaited stablecoin legislation
The stablecoin market will experience prosperity in 2025, with a market value reaching $400 billion or higher. This growth will be driven by the following key factors:
Stablecoin legislation
Pro-crypto policymakers in Washington have the most attainable goal of comprehensive stablecoin legislation. This will address important questions, including who will regulate and what appropriate reserve requirements are. Clear regulations will spark immense interest from issuers, consumers, and businesses. Major traditional banks like JPMorgan are expected to enter this space.
Fintech integration
Stripe acquired the stablecoin platform Bridge for $1.1 billion, claiming that stablecoins have become 'superconductors 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 managed assets and trading volume of stablecoins will significantly increase.
Global trade and remittances
In 2024, stablecoin trading volume will reach $8.3 trillion, approaching Visa's $9.9 trillion payment volume during the same period. Stablecoin giant Tether recently provided financing for $45 million in crude oil transactions through its USDT stablecoin. As digital dollars continue to disrupt these massive markets, demand for stablecoins will continue to grow.
Bull market growth
As the clearest catalyst, the overall expansion of the cryptocurrency market will drive the growth of managed assets in stablecoins. The cryptocurrency market is bullish in 2025, and the stablecoin market will grow alongside it.
Forecast 10: As Wall Street accelerates its entry, the scale of RWA tokenization will exceed $50 billion
Three years ago, the cryptocurrency industry 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.
Tokenization has achieved such significant growth mainly because it offers clear advantages: it provides instant settlement, costs far lower than traditional securitization, and all-day liquidity, while bringing transparency and accessibility to almost all asset classes.
BlackRock CEO Larry Fink has transformed from a bitcoin skeptic to a firm supporter of tokenization, stating that 'securities tokenization will become the next generation of the market.' This statement from the head of the world's largest asset management company carries significant weight.
Wall Street is just starting to recognize this, which means a massive influx of institutional capital may soon flow into the tokenized RWAs space.
By 2025, the tokenized RWA market is expected to reach $50 billion and potentially experience exponential growth from there.
Venture capital firm ParaFi recently predicted that the tokenized RWA market could grow to $2 trillion by the 2030s, while the Global Financial Markets Association predicts it could reach $16 trillion.
Additional forecast: By 2029, Bitcoin will surpass the $18 trillion gold market, with a price exceeding $1 million
While people tend to make predictions for one year, from a longer-term perspective, Bitcoin's growth prospects are even more eye-catching.
By 2029, Bitcoin's market value is expected to surpass that of the gold market. Based on gold's current market value, this means the price of each Bitcoin will exceed $1 million.
Choosing the year 2029 is intentional: Bitcoin has historically operated on a four-year cycle. Although this pattern may not continue, 2029 will mark the peak of the next cycle (also the 20th anniversary of Bitcoin's creation). Surpassing the gold market within 20 years of its inception is undoubtedly a significant achievement, but Bitcoin is expected to achieve this goal.
Notably, if the U.S. announces plans to purchase 1 million Bitcoins to establish a strategic reserve, the timeline for Bitcoin prices exceeding $1 million could be significantly accelerated.
Original link
