Introduction
2024 will be a milestone year for the cryptocurrency space. Bitcoin reached unprecedented heights that year, breaking through the historical high of $103,992. This achievement was not just a result of natural market growth but was driven by the historic launch of spot Bitcoin ETFs in the U.S., which quickly attracted $3.356 billion in inflows. Additionally, other major crypto assets performed well, with Solana rising 127.71%, XRP rising 285.23%, and Ethereum rising 75.77%. Meanwhile, crypto stocks like MicroStrategy and Coinbase saw their prices soar by 525.39% and 97.57%, respectively.
This year was not just about price increases; cryptocurrencies made significant progress in the political and regulatory arenas. In the 2024 U.S. elections, cryptocurrencies emerged as clear winners, with newly elected President Donald Trump promising during his campaign to create a strategic Bitcoin reserve and restructure the historically hostile U.S. Securities and Exchange Commission (SEC) towards cryptocurrencies. He also nominated Scott Bessent, who has stated that 'cryptocurrency is about freedom,' as Treasury Secretary. Cryptocurrency-friendly candidates in Congress also defeated opponents in several key elections, clarifying the legislative environment for cryptocurrencies.
Prediction 1: Bitcoin, Ethereum, and Solana will reach all-time highs.
In 2024, inflows to Bitcoin ETFs set records, pushing Bitcoin to new all-time highs. We expect this trend to continue. Coupled with the new supply reduction from the April 2024 halving and new buying demand from corporations and governments, we have seen similar situations before. Notably, if the U.S. government implements the proposal to establish a strategic reserve of 1 million Bitcoins, the price of Bitcoin could even exceed $500,000.
Although Ethereum achieved a 75.77% increase in 2024, it lost some investor favor as attention shifted to Bitcoin or rapidly growing programmable blockchains. However, we expect a narrative shift for Ethereum in 2025, with increased activity in Layer 2 blockchains like Base and Starknet, and spot Ethereum ETFs attracting billions in inflows. Another catalyst is the tremendous growth of Ethereum-based stablecoins and tokenization projects.
Solana, dubbed the 'phoenix' of cryptocurrencies, rebounded after the market crash in 2022, reaching new highs in 2024, partly due to the meme coin craze. We believe Solana's momentum is just beginning, and in 2025, 'serious' projects will migrate to the Solana network to complement its dominance in the meme coin space.
Prediction 2: Inflows to Bitcoin ETFs will exceed those of 2024.
In January 2024, the launch of the U.S. spot Bitcoin ETF attracted significant inflows, with first-year inflows reaching $3.36 billion. We expect inflows for 2025 to exceed this figure. Historically, the first year of an ETF launch often sees the least amount of inflows. For example, following the launch of the gold ETF in 2004, the first year saw inflows of $260 million, which increased annually in subsequent years. Therefore, it is logical for the second year of the Bitcoin ETF to see inflows surpassing the first year.
Additionally, the world's largest financial institutions, such as Morgan Stanley, Merrill Lynch, Bank of America, and Wells Fargo, have yet to fully open their wealth management channels to Bitcoin ETFs. We believe this will change in 2025 as trillions of dollars in assets managed by these companies begin flowing into Bitcoin ETFs, leading to a significant increase in inflows.
Prediction 3: Coinbase will surpass Charles Schwab and become the world's most valuable brokerage.
Coinbase's stock was only $35 at the beginning of 2023, and by December 6, 2024, its price had risen to $344, nearly a tenfold increase. We predict that in 2025, Coinbase's stock price will exceed $700, making it the world's most valuable brokerage, surpassing Charles Schwab.
The main factors driving this growth include the expansion of Coinbase's stablecoin business, the growth of the Base network, and enhancements in staking and custody services. Revenue from the stablecoin business grew by $162 million (31%) in 2024; if this growth trend continues, revenue will keep increasing. Additionally, Coinbase's Base network has become the top Layer 2 network in terms of trading volume and total value locked, and this growth is expected to bring in substantial revenue.
Prediction 4: 2025 will be the 'Year of Crypto IPOs'.
The past few years have seen the crypto IPO market relatively quiet. However, we anticipate a wave of IPOs from crypto unicorn companies in 2025. Factors driving this trend include rising crypto prices, increased investor demand, a surge in institutional adoption, the mainstreaming of blockchain technology, and an improved political environment.
Companies likely to go public in 2025 include Circle, the issuer of USDC; Figure, which provides financial services using blockchain technology; Kraken, one of the largest crypto exchanges in the U.S.; Anchorage, which offers digital asset infrastructure services; and Chainalysis, a market leader in blockchain compliance and intelligence services.
Prediction 5: Tokens launched by AI agents will lead to a larger meme coin craze.
As we enter 2025, we expect a larger meme coin craze than in 2024, with tokens launched by AI agents leading this trend. For instance, in an interaction between Marc Andreessen and an AI chatbot named Truth Terminal, the AI agent promoted a meme coin called GOAT, which quickly became an asset with a market cap exceeding $1.3 billion.
However, we are most excited about the breakthrough of Clanker, an AI agent designed to autonomously deploy tokens on Coinbase's Layer 2 scaling solution, Base. Users simply tag Clanker on Farcaster and tell the AI agent to launch a token with a given name and image, and it will automatically deploy the token. In less than a month, Clanker has launched over 11,000 tokens, generating over $10.3 million in fees. We believe that AI-launched tokens will drive a new meme coin craze in 2025.
Prediction 6: The number of countries holding Bitcoin will double.
Currently, according to data from BitcoinTreasuries.net, nine countries globally hold Bitcoin, with the U.S. holding the most. We expect this number to double by 2025. It is uncertain whether the U.S. will establish a strategic Bitcoin reserve in 2025, but this possibility has sparked a global race to buy Bitcoin.
Prediction 7: Coinbase will enter the S&P 500, and MicroStrategy will enter the Nasdaq 100.
Currently, there is virtually no cryptocurrency in the portfolios of ordinary American investors. However, nearly every investor owns funds that track the S&P 500 or Nasdaq 100 indices. We expect these indices to include Coinbase and MicroStrategy in the near future, which will ensure that nearly all American investors have cryptocurrency in their portfolios.
Prediction 8: The U.S. Department of Labor will relax guidance on cryptocurrencies 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 including cryptocurrency investment options in plans. With the new government in Washington, we expect the Department of Labor to relax this guidance.
Prediction 9: The value of stablecoin assets will double to $400 billion.
The long-awaited stablecoin legislation in the U.S. will stimulate market growth. The growth of the stablecoin market will be driven by legislation, global trade and remittances, fintech integration, and bull market growth.
Prediction 10: The value of tokenized real-world assets (RWA) will exceed $50 billion.
Tokenization provides instant settlement, significantly lowers the costs of traditional securitization, and offers liquidity around the clock, while bringing transparency and accessibility to nearly every asset class. We expect the tokenized RWA market to reach $50 billion in 2025, with the potential for exponential growth.
Additional Prediction: By 2029, Bitcoin will surpass the $18 trillion gold market.
We believe that by 2029, Bitcoin will surpass the gold market, with a price exceeding $1 million. Bitcoin has historically fluctuated in four-year cycles; while there is no guarantee that this pattern will continue, 2029 will mark the peak of the next cycle.
