Written by: Matt Hougan, Ryan Rasmussen, Bitwise.
Compiled by: Yuliya, PANews.
2024 is a milestone year for the cryptocurrency market. Bitcoin soared to an all-time high of $103,992 (up 141.72% year-to-date as of this writing), primarily due to the record issuance of the US spot Bitcoin ETF, which attracted $33.56 billion in assets. Other major crypto assets also saw significant gains: Solana rose 127.71%, XRP rose 285.23%, and Ethereum rose 75.77%. Meanwhile, cryptocurrency-related stocks like MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record prices are not the only noteworthy development. Cryptocurrencies are set to play a prominent role in the 2024 US elections, which brightens the regulatory outlook for cryptocurrencies in the US. Elected President Trump supports cryptocurrencies during his campaign, promising to establish a Bitcoin strategic reserve and restructure the SEC (which has historically been hostile to cryptocurrencies). He also nominated Scott Bessent for Treasury Secretary, who has stated that 'cryptocurrency represents freedom, and the crypto economy will be here to stay.' As we enter 2024, Congress also appears to favor supporting cryptocurrencies, with pro-crypto candidates defeating opponents in several key elections. Legislative support for cryptocurrencies is expected in the coming months.
With global stimulus policies from China and other major central banks, increasing institutional adoption, and rapid improvements in blockchain technology, the outlook for 2025 looks quite bright.
TL;DR.
01: Bitcoin, Ethereum, and Solana will reach all-time highs, with Bitcoin trading over $200,000.
02: Bitcoin ETF inflows 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 surpassing $700 per share.
04: 2025 will be the 'Year of Cryptocurrency IPOs', with at least five cryptocurrency unicorns going public in the US.
05: AI-issued tokens will lead a larger-scale meme coin craze than in 2024.
06: The number of countries holding Bitcoin will double.
07: Coinbase will enter the S&P 500, and MicroStrategy will enter the Nasdaq 100, adding cryptocurrency exposure to (almost) every American investor's portfolio.
08: The US Department of Labor will relax its guidance on cryptocurrency in 401(k) plans, allowing hundreds of billions of dollars to flow into crypto assets.
09: As the US passes the long-awaited stablecoin legislation, the asset size of stablecoins 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 prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with each coin trading for over $1 million.
Prediction 1: Bitcoin, Ethereum, and Solana will reach all-time highs, with Bitcoin breaking $200,000.
The three cryptocurrency giants—Bitcoin, Ethereum, and Solana—outperformed all major asset classes in 2024, rising 141.72%, 75.77%, and 127.71%, respectively. In comparison, the S&P 500 index rose 28.07%, gold rose 27.65%, and bonds rose 3.40%.
This momentum is expected to continue into 2025, with Bitcoin, Ethereum, and Solana all reaching new all-time highs. Specific target prices are as follows:
Bitcoin: $200,000
Record ETF inflows are driving Bitcoin to new highs in 2024.
This trend is expected to continue.
The April 2024 halving will reduce new supply.
New buying demand from businesses and governments.
If the US government implements the proposal to establish a strategic reserve of 1 million Bitcoins, prices could reach $500,000 or higher.
Ethereum: $7,000
Despite a 75.77% rise in 2024, Ethereum's attention among investors has declined.
The narrative is expected to shift in 2025.
Driving factors include:
Layer 2 blockchain activities (such as Base and Starknet) are accelerating.
Spot Ethereum ETFs will attract billions in inflows.
Massive growth of stablecoin and tokenization projects on Ethereum.
Solana: $750.
A strong recovery in 2024 driven by meme coin frenzy.
Momentum is expected to continue strengthening.
Catalysts for 2025 will be the migration of 'serious' projects to the network.
There are early cases like the migration of the Render project.
This trend is expected to accelerate over the next year.
Catalysts.
Increased institutional investment.
Corporations continue to buy.
Investment banks approve cryptocurrency businesses.
US Strategic Bitcoin Reserve Plan
Better regulatory and political environment.
Bitcoin halving leads to tightened supply.
Layer-2 scaling solutions.
Macro tailwinds (rate cuts, China's stimulus policies)
Increased allocation ratios (3% becoming the new 1% standard).
Potential downside factors.
Washington's policies are disappointing.
Leverage liquidation risks.
Government sell-off
Meme coin craze fails.
Rate cuts fall short of expectations.
Prediction 2: Inflows for Bitcoin ETFs in 2025 will exceed those in 2024.
When the US spot Bitcoin ETF launches in January 2024, ETF experts predict that the product group will attract $5 billion to $15 billion in inflows in the first year. In reality, it exceeded the upper limit of that range within the first six months. Since its launch, these record-breaking ETFs have attracted $33.6 billion in inflows. It is expected that inflows in 2025 will exceed this number. 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.
The gold ETF attracted $2.6 billion in inflows back then, which was exciting.
But the situation in the following years (figures 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.
Key point: The second year's inflows exceeding the first year aligns with the development pattern of gold ETFs; a decrease in inflows would be unusual.
2. Major investment banks are joining.
The world's largest investment banks (including Morgan Stanley, Merrill Lynch, Bank of America, and Wells Fargo) have yet to unleash the power of their wealth management teams.
These financial managers currently have virtually no access to these products.
This situation is expected to change in 2025.
The trillions of dollars managed by these firms will begin to flow into Bitcoin ETFs.
3. Investors are gradually increasing allocations—1% becoming 3% is the new trend.
Bitwise has observed a clear pattern while helping investment professionals enter the cryptocurrency market over the past seven years:
Most investors start with small allocations and gradually increase over time.
It is expected that most investors who buy Bitcoin ETFs in 2024 will double their investments in 2025.
Prediction 3: Coinbase will surpass Charles Schwab to become the world's most valuable brokerage, with its stock price exceeding $700.
At the beginning of 2023, investors could purchase Coinbase stock for $35. Today, its stock price has reached $344, increasing nearly tenfold. Predictions indicate this price could continue to rise significantly.
Prediction: Coinbase stock will surpass $700 in 2025 (doubling from the current price). This will make Coinbase the world's most valuable brokerage, surpassing Charles Schwab.
The reason is: Coinbase is not just a brokerage.
Three main catalysts driving its growth:
1. Stablecoin business.
Thanks to an agreement with USDC issuer Circle, Coinbase's stablecoin business is thriving.
Year-to-date, stablecoin revenues have increased by $162 million (+31%).
If the development trajectory of stablecoins aligns with expectations, this trend will continue.
2. Base Network.
Last year, Coinbase launched a new Layer 2 network called Base, based on Ethereum.
Currently ranked first in trading volume and total locked value among Layer 2 networks.
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 Q3, these two business lines generated $589 million in revenue.
An increase of $304 million compared to the same period last year (+106%).
Both of these businesses are driven by asset balances and net new asset inflows.
Both of these metrics are expected to increase significantly in 2025.
Annual revenue from these business lines is expected to exceed $1 billion.
Prediction 4: 2025 will be the 'Year of Cryptocurrency IPOs', with at least five cryptocurrency unicorns going public in the US.
The past few years have seen the cryptocurrency IPO space relatively quiet. However, it is expected that 2025 will see a wave of IPOs from cryptocurrency unicorns.
Why now?
The background of currently listed cryptocurrency companies is significantly different from previous years:
Cryptocurrency prices rise.
Investor demand increases.
Institutional adoption surges.
Blockchain technology has become mainstream.
Macro environment is favorable.
Most importantly, the political environment has warmed up.
These factors together create favorable conditions for industry giants to go public.
Five major candidates for potential IPOs in 2025:
1. Circle.
The issuer of USDC (one of the largest stablecoins).
Has been actively preparing for an IPO.
Holds a strong position in the stablecoin market.
Expanding into new financial service areas.
2. Figure.
Known for providing various financial services utilizing blockchain technology.
Providing mortgage, personal loan, and asset tokenization services.
Has been 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 US.
Has been considering an IPO since 2021.
Plans delayed due to market conditions.
2025 may regain development momentum.
4. Anchorage Digital
Providing digital asset infrastructure services.
Diverse client base, including investment advisors, asset managers, and venture capital firms.
Holds 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.
Strong growth trajectory.
As the crypto industry places increasing importance on compliance requirements, it is highly likely to enter the public market.
Prediction 5: AI-issued tokens will lead a larger-scale meme coin craze than in 2024.
It is expected that 2025 will see a larger-scale meme coin craze than in 2024, with AI-generated tokens leading this wave.
GOAT case: The first collision of AI and meme coins.
A compelling case comes from a16z's Marc Andreessen interacting with 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, showcasing the immense potential of the fusion between AI and meme coins.
Clanker: A pioneering AI token issuance platform.
Clanker, as an innovative platform, enables 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.
In less than a month after its launch, Clanker issued over 11,000 tokens, generating over $10.3 million in fee revenue.
Future outlook.
AI-issued tokens are expected to drive a new wave of meme coins in 2025. Although these tokens may lack practical application value, and most may ultimately go to zero, they represent a fusion of AI and cryptocurrency, two breakthrough technologies, and this innovative development direction will continue to attract market attention.
Prediction 6: The number of countries holding Bitcoin will double.
Prospects for the US Strategic Reserve.
Whether the US will establish a strategic Bitcoin reserve in 2025 remains uncertain. While there are positive signals:
Wyoming Republican Senator Cynthia Lummis proposed a bill suggesting the US purchase 1 million Bitcoins within five years.
Incoming President Trump has expressed support for this proposal.
However, according to Polymarket predictions, this possibility is below 30%.
Global competitive landscape
The US's consideration of establishing a strategic Bitcoin reserve has already triggered a chain reaction globally.
Legislators from Poland to Brazil are proposing bills to establish national Bitcoin strategic reserves.
Governments around the world are accelerating their plans to avoid missing out on opportunities.
Current status and future outlook.
According to data from BitcoinTreasuries.net:
Currently, nine countries worldwide hold Bitcoin, with the US in the lead.
This number is expected to double in 2025.
Prediction 7: Coinbase will enter the S&P 500, and MicroStrategy will enter the Nasdaq 100.
Coinbase and MicroStrategy, two major publicly listed companies in the cryptocurrency space, will be included in mainstream stock indices, meaning almost all American investors' portfolios will gain exposure to the cryptocurrency sector.
Market status.
Ordinary American investors currently have no exposure to cryptocurrencies.
Cryptocurrency, as an emerging asset class, many investors either do not understand or actively choose to avoid.
But nearly every investor holds funds that track the S&P 500 or Nasdaq 100.
Many investors hold both types of index funds simultaneously.
Potential impact.
Once these two companies are included in the indices, it will have a massive market impact:
About $10 trillion in assets directly track the S&P 500 index.
An additional $6 trillion in assets benchmarked to this index.
Expected inflows for Coinbase after being included in the index:
Index funds need to buy approximately $15 billion worth of shares.
Benchmark funds could bring an additional $9 billion in buying demand.
Although the impact of MicroStrategy is relatively small due to its tracking fund size in the Nasdaq 100, it will still have a significant effect.
Prediction 8: The US Department of Labor will relax its guidance on cryptocurrency in 401(k) plans.
In March 2022, the US Department of Labor issued guidance warning 401(k) plan trustees about the significant risks associated with cryptocurrency investment options, announcing the launch of an investigation project to protect plan participants from these risks.
With the arrival of a new government in Washington, it is expected that the Department of Labor will relax this strict guidance. The significance of this policy change can be seen in the data:
American 401(k) plans currently manage $8 trillion in assets.
These funds continue to receive weekly inflows of new capital.
If the allocation ratio for cryptocurrencies reaches:
1%: This will bring an additional $80 billion in funding to the cryptocurrency space.
3%: This will bring an additional $240 billion in funding.
Prediction 9: Stablecoin assets will double to $400 billion, as the US passes long-awaited stablecoin legislation.
The stablecoin market will flourish in 2025, with a market cap reaching $400 billion or higher. This growth will be driven by several key factors:
Stablecoin legislation.
Pro-cryptocurrency policymakers in Washington have the easiest target to achieve through comprehensive stablecoin legislation. This will address important questions, including who will regulate and what the appropriate reserve requirements are. Clear regulations will spark significant interest from issuers, consumers, and businesses. Major traditional banks like JPMorgan are expected to enter this space.
Fintech integration.
Stripe acquired stablecoin platform Bridge for $1.1 billion, stating that stablecoins have become 'the superconductor 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 size and volume of stablecoin managed assets will grow significantly.
Global trade and remittances.
In 2024, stablecoin transaction volume reached $8.3 trillion, nearly matching Visa's $9.9 trillion payment volume during the same period. Stablecoin giant Tether recently provided financing for $45 million in crude oil trades through its USDT stablecoin. As the digital dollar continues to disrupt these massive markets, demand for stablecoins will keep growing.
Bull market growth.
As the most obvious catalyst, overall expansion of the cryptocurrency market will drive the growth of stablecoin managed assets. The cryptocurrency market is bullish in 2025, and the stablecoin market will grow alongside it.
Prediction 10: As Wall Street accelerates its entry, the scale of RWA tokenization will exceed $50 billion.
Three years ago, the cryptocurrency industry had tokenized less than $2 billion of real-world assets (RWAs), including private credit, US debt, commodities, and stocks. Today, this market size has reached $13.7 billion.
The reason tokenization has achieved such significant growth is primarily due to its clear advantages: it offers instant settlement, costs far lower than traditional securitization, and 24/7 liquidity, while providing transparency and accessibility to almost all asset classes.
BlackRock CEO Larry Fink has transformed from a Bitcoin skeptic to a staunch supporter of tokenization, stating that 'securities tokenization will be the next generation of the market.' This statement from the head of the world's largest asset management company is significant.
Wall Street is just beginning to recognize this, meaning significant institutional funds may flood into the tokenized RWA sector soon.
By 2025, the market size for tokenized RWA is expected to reach $50 billion, potentially leading to exponential growth thereafter.
Venture capital firm ParaFi recently predicted that the market size for tokenized RWA could grow to $2 trillion by the 2030s, while the Global Financial Markets Association predicts it could reach $16 trillion.
Additional prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with a price exceeding $1 million.
While people often tend to make one-year forecasts, from a longer-term perspective, the outlook for Bitcoin is even more remarkable.
It is expected that by 2029, Bitcoin's market cap will surpass that of the gold market. Based on gold's current market cap, this means that each Bitcoin's price will exceed $1 million.
There is a reason for choosing 2029 as a time point: Bitcoin has historically operated on a four-year cycle. Though 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, and Bitcoin is expected to accomplish this.
Notably, if the US announces the purchase of 1 million Bitcoins for strategic reserves, the time for Bitcoin to break through $1 million could be significantly accelerated.
