Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: 0xjs@Golden Finance
Every year, the Bitwise team gathers to make annual predictions about the future of cryptocurrencies. This process requires a dozen team members to engage in hours of discussion, debate, and reflection. It's one of the most exciting things we do each year.
We will release our 2025 predictions on December 10. Hint: We think 2025 will be crazy. But before we make predictions for next year, it's worth reviewing how 2024 performed.
Background setting: Reviewing December 2023
First, let’s set the scene.
We published our 2024 predictions on December 12, 2023. At that time, cryptocurrencies were in a very different position. Bitcoin's trading price was $43,750, and anti-cryptocurrency rhetoric in Washington, D.C. was very intense. Just days before we published our 2024 predictions, JPMorgan CEO Jamie Dimon testified before Congress, stating that he has been 'strongly opposed to cryptocurrencies, Bitcoin, etc.' He then said, 'If I were the government, I would shut it down.'
The progress made in 2024 is astonishing. Bitcoin's current trading price is close to $100,000, politicians supporting cryptocurrencies dominate in Washington, and Wall Street companies are eagerly developing in this field. But it was not obvious when we made our annual predictions in December 2023.
Let's see how we did.
2024 Prediction 1: Bitcoin's trading price will exceed $80,000, setting a new all-time high.
Result: Correct
Our prediction was accurate. Bitcoin broke $80,000 in November and continued to rise, currently trading close to $100,000. Our argument at the time—that the approval of a spot Bitcoin ETF and Bitcoin halving would jointly drive up prices—was completely correct.
We will announce our price targets for 2025 next week and increase our price targets for Ethereum and Solana. Stay tuned.
Prediction 2: The spot Bitcoin ETF will be approved and will become the most successful ETF launch in history.
Result: Correct
This is also a victory. The spot Bitcoin ETF approved in January 2024 has become the most successful ETF launch to date. As of December 1, 2024, the Bitcoin ETF has attracted $31 billion in inflows. The previous record for 'the most successful ETF launch ever' was held by Invesco QQQ Trust (QQQ), which listed in 1999 and attracted $5 billion in assets in its first year. Gold ETFs attracted less than $2 billion in their first year. The inflow to the Bitcoin ETF is several times that number and is still growing.
Prediction 3: Coinbase's revenue will double, exceeding Wall Street expectations (profits) by at least 10 times.
Result: Correct
It will be a closely contested match. Coinbase's revenue in 2023 was $3.1 billion, and the revenue for the first three quarters of 2024 was $4.1 billion. Can it reach $6.2 billion by the end of the year? I think it can. The fourth quarter is an extraordinary one for cryptocurrencies.
Coinbase remains one of the most fascinating companies in the world, and it seems to us that the company is undervalued. Next week, we will also release a series of predictions related to Coinbase.
Prediction 4: The funds settled using stablecoins will exceed those settled using Visa.
Result: Incorrect
In the first six months of 2024, the global settlement amount for stablecoins reached $5.1 trillion, a significant increase compared to the same period last year. However, they have not yet caught up with Visa, which had a settlement amount of $6.5 trillion during the same period. Close but not yet a victory.
Prediction 5: As Wall Street prepares to tokenize real-world assets, JPMorgan will tokenize a fund and launch it on-chain.
Result: Incorrect
I really hope this dream comes true. It would be a sweet irony to see JPMorgan (whose CEO once angrily demanded Washington 'shut down' cryptocurrencies) tokenize its own fund.
We are very close to success! Wall Street's tokenization of funds is a major theme for 2024. BlackRock, Franklin Templeton, Guggenheim, UBS, and Société Générale have all taken steps in this direction. JPMorgan has invested heavily in tokenization, reshaping its tokenization platform and calling it 'the next generation of financial infrastructure.' However, the company did not actually launch a fund, so we cannot claim victory.
Prediction 6: As users flock to cryptocurrency applications, Ethereum's revenue will more than double, reaching $5 billion.
Result: Incorrect
What we said before was outrageous. In 2024, activity in Ethereum-based applications surged, but year-end revenue may be slightly below last year's $2 billion. Why? The 'Dencun' upgrade in March significantly reduced network fees by 99%. We ultimately think this is beneficial for the network, but the short-term hit to revenue is challenging.
Prediction 7: Taylor Swift will launch NFTs to connect with fans in new ways.
Result: Incorrect
This did not happen, but it remains an area to watch in 2025. Reports suggest that Taylor has been concerned about whether NFTs are securities. If we gain clearer regulation on NFTs in the coming year, this question may be back on the agenda.
Prediction 8: AI assistants will use cryptocurrencies for online payments and confirm that cryptocurrencies are the 'native currency of the internet.'
Result: Correct
In July, legendary venture capitalist Marc Andreessen donated $50,000 worth of Bitcoin to an AI robot called Truth Terminal. The robot ultimately helped promote a meme coin—Goatseus Maximus (GOAT)—which is currently valued at $674 million. We speculate that AI robots will widely use cryptocurrencies and stablecoins in the coming years. Although the GOAT experiment is crazy, it offers an astounding proof of concept.
Prediction 9: As prediction markets become the new 'killer app' for cryptocurrencies, over $100 million will be invested in them.
Result: Correct
This is the prediction I am most proud of.
In December 2023, few people had heard of Polymarket, a cryptocurrency-based prediction market where users can bet on the outcomes of global events. But we are fans of the platform and believe it will take off as the U.S. elections approach. Wow, we were right: the total amount wagered on the platform jumped from $8 million when we predicted it to peak levels of over $500 million. Polymarket became a household name in the process. It also proved its unique foresight in the 2024 elections.
In our 2025 prediction article, we will forecast the next breakthrough crypto application.
Prediction 10: Major upgrades to the Ethereum blockchain will lower average transaction costs to below $0.01, paving the way for more mainstream use.
Result: Correct
Let me calculate this. The average transaction costs of many Ethereum Layer 2 networks have dropped more than 90% year-over-year, currently hovering between $0.01 and $0.02. But this summer, it fell below $0.01, and I believe we will soon reach that level again as the underlying technology continues to improve. Transactions below one cent on major blockchains will change the world.
Additional prediction: By the end of 2024, a quarter of financial advisors will allocate cryptocurrencies in client accounts.
Result: To be determined
Each year, we survey financial advisors to understand how many hold cryptocurrencies in client accounts. In 2023, only 11% said 'yes.' The survey for the end of 2024 is still ongoing, so we do not yet know if it will reach the 25% level. A potential obstacle is that large banks like Wells Fargo, UBS, and Merrill have not yet approved a spot Bitcoin ETF. But we believe it is just a matter of time, not if.
Conclusion
So how did we do? Six correct, four incorrect, and one pending. Considering how aggressive our predictions were—Bitcoin doubling in price, prediction markets soaring, Ethereum fees dropping by 99%, all in a rapidly changing field—we'll take it.
But one thing is certain: our accuracy will be higher in 2025. Stay tuned.
