Author: Zoltan Vardai; Translation: Bai Shui, Golden Finance
Due to increasingly clear regulations and soaring cryptocurrency valuations, the global cryptocurrency industry is expected to gain mainstream and institutional recognition again in 2025.
2024 set a new historical high, with Bitcoin's price reaching an all-time high of $108,300 on December 17, more than a month after Donald Trump won the U.S. presidential election, and the optimism among cryptocurrency investors is rising.
Industry experts point out that with clearer expectations for regulation under Trump's new government, the cryptocurrency industry may experience another milestone year, including greater institutional adoption and a record number of global cryptocurrency investors.
Regulatory clarity will lead to a historic high in the number of cryptocurrency investors.
In 2024, the cryptocurrency industry experienced significant regulatory developments in some of the largest jurisdictions.
In Europe, the Market in Crypto-Assets Regulation (MiCA) — the world's first comprehensive cryptocurrency regulatory framework — came into full effect on December 30, providing comprehensive guidelines for cryptocurrency service providers.
In Asia, Singapore is becoming the next crypto hub with its 'risk-adjusted' regulations, which helped the country double the number of digital asset licenses issued annually in 2024.
Singapore has 1,600 blockchain patents, 2,433 industry-related job openings, and 81 cryptocurrency exchanges. These numbers are remarkable for a country with a population of less than 6 million.
Jonathan Levin, CEO of Chainalysis, stated that these global regulatory developments will lead to greater adoption by retail and institutional investors.
Levin stated: "We can expect an increase in adoption rates among institutional and retail investors next year, especially as these regulations bring greater transparency to the industry."
He added that these new regulations will also enhance industry trust, market integrity, and consumer protection, "which will make the industry more attractive to retail investors."
Levin stated that regulatory transparency will lead to a record high in daily cryptocurrency users and stimulate the growth of institutional products like exchange-traded funds (ETFs).
According to Triple-A's 2024 Cryptocurrency Ownership Report, as of July 12, it is estimated that there are 560 million cryptocurrency holders, accounting for 6.8% of the global population.
There are 560 million cryptocurrency holders worldwide. Source: triple-a
Pavlo Denysiuk, CEO of cryptocurrency payment company Lunu, stated that based on current user growth, the number of cryptocurrency holders could double in the next two years.
Denysiuk stated during a panel discussion at NFT Fest 2024: "This is where we see more adoption in various places and payments."
ETFs and government BTC reserve plans will drive institutional adoption.
By making it easier for traditional financial institutions to access BTC investments, the U.S. spot Bitcoin exchange-traded fund has brought about greater institutional adoption.
Bitcoin ETFs approached the $110 billion mark in less than a year after launch, supporting analysts' forecasts of a peak of $200,000 for Bitcoin in the 2025 cycle.
Jonathan Levin, CEO of Chainalysis, stated that this dynamic will pave the way for institutions to increasingly accept Bitcoin as an asset class:
"This is likely to translate into sustained institutional interest, as well as efforts by financial institutions and cryptocurrency companies to build the infrastructure and resilience needed to support investor demand."
As an important sign of Bitcoin's popularization, Bitcoin's status as a savings technology is increasingly rising in the U.S., thanks to the Bitcoin bill advocated by Wyoming Senator Cynthia Lummis, which proposes the establishment of strategic Bitcoin reserves.
Lummis Bitcoin Bill. Source: Lummis.senate.gov
Anastasija Plotnikova, co-founder and CEO of Fideum, stated that due to Donald Trump winning the presidential election in November 2024 and the Republican majority in the Senate, the Bitcoin reserve proposal is gaining strong support.
Adam Back, co-founder and CEO of Blockstream and inventor of Hashcash, stated that if the Bitcoin bill is accepted by U.S. legislators, the price of Bitcoin could ultimately exceed $1 million.
Cryptocurrency adoption in low-income countries is expected to continue to grow.
According to the Chainalysis 2024 Cryptocurrency Geography Report released in October 2024, cryptocurrency activity increased in 2024 and peaked at the heights of the 2021 bull market.
The report stated that the Chainalysis global index measuring the total value of global cryptocurrency activity rose to a new high of over 0.75 in the first quarter of 2024.
A global index measuring the total value of cryptocurrency activity. Source: Chainalysis
The report adds that while cryptocurrency adoption in 2023 was primarily driven by middle and low-income countries, the peak in 2024 is attributed to increased cryptocurrency activity across countries of all income levels, while activity in high-income countries decreased at the beginning of 2024.
Levin noted that the increase in global activity is primarily attributed to the growing real-world use cases of stablecoins and the debut of Bitcoin ETFs in the U.S.:
"There are many factors driving this trend, from the U.S. launching Bitcoin ETFs to stablecoins supporting real-world use cases in low- and middle-income countries, along with significant increases in DeFi activity in Sub-Saharan Africa, Latin America, and Eastern Europe."
Global cryptocurrency adoption index for 2024. Source: Chainalysis
Countries like India, Nigeria, and Indonesia lead in adoption, with India ranking first in Chainalysis' global cryptocurrency adoption index.
In Latin America, El Salvador adopted Bitcoin as legal tender on September 7, 2021, bringing the country over $31 million in profit in the first three years.
Despite making a profit of $31 million, President Nayib Bukele's decision has faced widespread criticism after Bitcoin's decline from its historical high of $69,000 in November 2021 following the collapse of the FTX exchange. During the bear market, Bitcoin dropped to $16,000, leading to a significant drop in El Salvador's Bitcoin holdings.
Author and intergovernmental blockchain expert Anndy Lian stated that El Salvador's decision to adopt Bitcoin is an important step in Bitcoin's increasing integration into the global financial system.
Lian stated that similar government initiatives could promote Bitcoin adoption in other countries:
"As more countries consider this path, we may see a gradual redefinition of 'safe' reserve assets. If Bitcoin becomes a primary currency for national reserves, it could fundamentally change the global financial landscape and promote more decentralized and digitized economic stability approaches."
BTC and gold, 1-year chart. Source: Cointelegraph/TradingView
Bitcoin may even become the next reserve asset after gold. TradingView data shows that Bitcoin has risen more than 131% over the past year, while gold prices have increased by about 30%.
Cryptocurrency investors remain optimistic about 2025, especially on January 6, two weeks before Donald Trump's inauguration on January 20, after Bitcoin reclaimed $100,000 — this is seen as a potential catalyst for cryptocurrency prices due to clearer regulations.
The bullish trend for Bitcoin in 2025 is expected to attract more investors' attention to the cryptocurrency industry, with price predictions ranging from $160,000 to over $180,000.
