Original text by: Nina Bambysheva, Forbes
Original text translated by: Luffy, Foresight News
Cryptocurrency winter? It's over. The decline of the crypto empire and court dramas? They are now in the past. Survivors? Battle-tested, with a clear vision, as if this is a new gold rush.
After years of conflict with the U.S. Securities and Exchange Commission (SEC), Bitcoin and Ethereum exchange-traded funds (ETFs) have finally arrived. According to crypto research firm K 33 Research, as of December 16, U.S. Bitcoin ETFs held assets worth $129 billion, surpassing gold ETFs' $125 billion.
Market excitement after the U.S. elections, combined with Donald Trump's promise to make America the 'crypto capital of the world' and establish a strategic Bitcoin reserve, caused Bitcoin's price to briefly break through $100,000.
Solana is seizing development opportunities, thanks to memecoin hype and the rise of new narratives like DePIN. DePIN is a network that utilizes blockchain technology to decentralize control and ownership of physical infrastructure. Platforms like Polymarket (where users can bet on the outcome of the U.S. presidential election) and the battle royale game Off The Grid have achieved mainstream success. A new wave of 'degens' is betting on tokens like fartcoin and dogwifhat, both of which currently have market caps exceeding $1 billion.
Rob Hadick, a general partner at cryptocurrency venture capital firm Dragonfly based in San Francisco, stated, 'This year, cryptocurrency has entered mainstream consciousness in an unprecedented way since 2021; now it is a sustainable long-term asset class that will have a voice and play an important role.' 'When you look at the impact of cryptocurrency on elections, whether it's crypto political donations or promoting it among legislative bodies and presidential candidates, this is unprecedented and marks a significant step towards the legitimization of cryptocurrency.'
Donald Trump attended the 2024 Bitcoin conference in Nashville, Tennessee. Photo credit: (The Washington Post)
With Trump and a group of pro-crypto officials set to take office, what industry insiders are calling the 'crypto golden age' has begun. Here are the trends brewing:
Historic highs and Bitcoin reserves in the U.S.
The art of bold price predictions is back in vogue. Crypto asset management firm Bitwise predicts that if the U.S. establishes a strategic reserve similar to oil or gold, Bitcoin's price could reach $200,000, or even $500,000. The logic is that an official U.S. Bitcoin reserve would trigger global FOMO.
Trump proposed at the Nashville Bitcoin conference in July to use 200,000 bitcoins (worth $21 billion) seized from criminals to start a reserve. But the legal pathway is unclear—will it require congressional approval, or can the executive branch act unilaterally? Senator Cynthia Lummis, a supporter of cryptocurrency, proposed a reserve plan run by the Treasury in July. Skeptics argue that Bitcoin's volatility could undermine financial stability. Trump's silence on whether the U.S. will purchase more Bitcoin through open markets adds another layer of uncertainty.
Cryptocurrency regulatory reset: Friendly Washington
The new administration is expected to be the most crypto-friendly government to date. Some key government appointments regarding cryptocurrency include:
U.S. Securities and Exchange Commission (SEC): Former SEC commissioner and cryptocurrency supporter Paul Atkins is set to replace crypto adversary Gary Gensler, who was known for suing and enforcing against crypto firms during his tenure.
Commodity Futures Trading Commission (CFTC): Brian Quintenz, policy director at Andreessen Horowitz and former CFTC commissioner, is a leading candidate to lead the agency.
Treasury: Billionaire hedge fund manager and Bitcoin advocate Scott Bessent is Trump's pick for Treasury Secretary.
Ministry of Commerce: Howard Lutnik, CEO of Cantor Fitzgerald (the primary custodian of Tether's USDT reserves), will lead the department.
Artificial Intelligence and Cryptocurrency Czar: David Sacks, a long-time venture capitalist who previously worked with Elon Musk at PayPal, will be responsible for overseeing policies in two key areas of Trump's strategy to enhance national competitiveness.
House Financial Services Committee: Arkansas Republican Congressman French Hill, alongside outgoing committee chairman Patrick McHenry, advocates for crypto-friendly legislation. He plans to prioritize legislation on crypto market structure in the first 100 days and investigate the so-called 'Choke Point 2.0' action, which many believe unfairly targets the crypto industry through de-banking practices.
'This is a real opportunity to set good policy for the industry,' said Kristin Smith, CEO of the Blockchain Association based in Washington, D.C., which represents over 100 cryptocurrency companies. 'The White House has indicated this is a priority. I believe we will see a concerted effort from various government departments, legislative pushes for market structure and stablecoins, and a significant shift of innovation returning to the U.S.,' she added.
New crypto IPOs and venture capital influx
The process of cryptocurrency IPOs is heating up. Bitwise has listed five companies that may go public next year:
Circle: The issuer of the second largest stablecoin USDC secretly filed for an IPO this January.
Figure: This company is known for blockchain-based financial services (such as mortgages, personal loans, and asset tokenization) and has been exploring an IPO since last year.
Kraken: The IPO plan for this U.S.-based cryptocurrency exchange dates back to 2021.
Anchorage Digital: Its status as a federally chartered bank may pave the way for its IPO.
Chainalysis: A leader in blockchain compliance and intelligence services, is expected to go public.
Additionally, Hadick from Dragonfly stated, 'I expect the LP (limited partners in crypto venture capital) market to improve; they will want to put more funds into cryptocurrency. Many traditional Web2 crossover funds will return to the Web3 space. We have already seen this trend in certain areas, such as stablecoins and payments.' He added that venture capital deals often lag behind public market price increases by one or two quarters.
Crypto-related companies included in major stock indices
MicroStrategy's stock has risen over 400% this year. With new accounting rules allowing companies to reflect the market value of their Bitcoin investments on financial statements, the company has now become a component of the Nasdaq-100 index, and analysts predict it will be added to the S&P 500 index next. This change could see MicroStrategy enter index-tracking funds, joining the portfolios of countless U.S. investors. Michael Saylor, co-founder and executive chairman of MicroStrategy, has implemented a 'Bitcoin treasury' strategy (selling bonds and stocks to accumulate Bitcoin) that has pushed its $86 billion company into the top 100 of the S&P 500. Analysts say Coinbase, which has also risen 70% this year, could join this coveted index.
Surge in stablecoins
With the anticipated stablecoin legislation soon to be introduced in the U.S., the stablecoin industry is expected to experience explosive growth, with a market cap likely to double to $400 billion. According to Bitwise, stablecoin transaction volumes could reach $8.3 trillion in 2024, almost equivalent to Visa's $9.9 trillion payment volume.
Tether and Circle still dominate. However, Hadick warns that if they continue operating like asset management companies rather than payment companies, their growth may soon stagnate.
Stripe acquired the stablecoin platform Bridge for $1.1 billion in October, sending a message that stablecoins could become the cornerstone of fintech. Stripe calls it 'the superconductor of financial services' and boasts of its unparalleled speed, low costs, and global reach. Robinhood is also exploring the creation of a global stablecoin network.
Meanwhile, the next generation of 'stablecoin 2.0' models is quietly emerging. Ceteris, research director at New York crypto analysis firm Delphi Digital, explains, 'Many new stablecoin models are returning revenue to token holders or actual applications that attract users. I believe these models are disruptive.'
Acceleration of traditional asset tokenization
Larry Fink, CEO of BlackRock, has been promoting tokenization for years. From real estate to art, everything could soon be tokenized. The biggest benefits of tokenization are: instant settlement, lower costs than traditional securitization, around-the-clock liquidity, and transparency.
Three years ago, the cryptocurrency industry had only tokenized $2 billion of real-world assets (RWA), including private credit, U.S. debt, commodities, and stocks. Today, that number has approached $14 billion. Venture capital firm ParaFi predicts that by 2030, the market for tokenized RWA could soar to $2 trillion, indicating a significant transformation in asset ownership and trading.
New applications, better infrastructure
The buzzword at the end of 2024 is AI agents. Get ready to witness the fusion of artificial intelligence and cryptocurrency, a blend closer to science fiction.
This trend has already begun to emerge. Take TruthTerminal as an example; this AI agent not only received $50,000 from Marc Andreessen but also became a millionaire through X social media. Its success stems from promoting a token based on absurd memes from the early 2000s (the token's anonymous creator transferred a large sum to TruthTerminal's wallet, which is managed by Andy Ayrey).
However, analysts are cautious about this. There are few practical AI agents (such as those attempting to execute complex transactions on behalf of users across blockchains) and they are still in early stages. 'The excitement around agents comes from their novelty,' Ceteris of Delphi said, 'but whether good or bad, it could be the biggest bubble of this cycle.'
Despite the blockchain industry still being fragmented, and most decentralized applications not yet mainstream, work continues on building robust infrastructure. Ceteris explains, 'Solana has set the trend for the high-throughput blockchain era, and almost every new chain is launched under this trend, which will lead to a large amount of cheap block space.'
Thus, the narrative theme of cryptocurrency has shifted from survival to prosperity. This is just part of what may surprise us next year. You can choose to prepare popcorn for the show or pull out your wallet for this opportunity. Caution is essential, as the market will experience highs and lows. And this time, the stakes seem higher than ever.
