We see a brighter future: 2025 will usher in the golden age of crypto.
Compiled & organized by: Pzai, Foresight News
The year 2024 will be a milestone year for the cryptocurrency sector: cryptocurrency prices soaring to new all-time highs, the launch of the spot Bitcoin ETF being the most successful ETF launch ever, and pro-crypto politicians winning big in Washington. But we see a brighter future: 2025 will usher in the golden age of crypto. Here are 10 predictions for the coming year.
Bitcoin, Ethereum, and Solana will reach new all-time highs
The three major assets in the crypto space—Bitcoin, Ethereum, and Solana—are expected to outperform all major asset classes in 2024, rising 141.72%, 75.77%, and 127.71% respectively. Meanwhile, the S&P 500 index return is 28.07%, the gold return is 27.65%, and the bond return is 3.40%. We expect this momentum to continue into 2025, with Bitcoin, Ethereum, and Solana reaching new all-time highs. Our expected target prices are as follows:
Bitcoin—$200,000
Record inflows into Bitcoin ETFs have propelled Bitcoin to an all-time high in 2024. We believe this trend will not slow down anytime soon (see below). Combine this demand with the supply reduction caused by the halving in April 2024, along with new purchases from corporations and governments... well, we’ve seen this before. (Note: If the U.S. government implements the proposal to establish a strategic reserve of 1 million Bitcoins, $200,000 could turn into $500,000 or more.)
Ethereum—$7,000
Despite Ethereum rising 75.77% in 2024, the second-largest crypto asset has lost favor with many investors, who either turned to Bitcoin or focused on rapidly growing competing blockchains. However, as Warren Buffett said, 'Be fearful when others are greedy, and greedy when others are fearful.' We expect a narrative shift for Ethereum in 2025 as activity on Layer 2 blockchains like Base and Starknet accelerates, with billions of dollars flowing into spot Ethereum ETFs. Another catalyst could be the substantial growth of Ethereum-based stablecoins and tokenization projects.
Solana—$750
The phoenix of cryptocurrency rises from the ashes of the 2022 market crash, soaring to new heights in 2024 driven by the meme coin frenzy, making the legend of GameStop look relatively mild. We believe Solana's momentum is just beginning to strengthen. The catalyst for 2025 will be the transition of 'serious' projects onto the network to complement its dominance in meme coins. We have already seen early examples of projects like Render making leaps. We expect this trend to accelerate in the coming year.
Catalysts and potential resistance in the crypto market
Bitcoin ETFs will see more inflows
When the U.S. spot Bitcoin ETF launches in January 2024, ETF experts predict that the fund's first-year inflows will be between $5 billion and $15 billion. They exceeded that upper limit in the first six months. Since the launch, these record-breaking ETFs have absorbed $33.6 billion in inflows. We expect inflows in 2025 to surpass this number. Why? There are three reasons:
The first year is usually the slowest year
For the launch of the Bitcoin ETF, we have the best historical analogy, which is the launch of the gold ETF in 2004. That year, the gold ETF had an influx of $2.6 billion right out of the gate, and everyone was excited. But look at what happened in the following years: 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 (inflation-adjusted). The point is: the flow in Year 2 exceeded that of Year 1, which aligns with the example of gold. A gradual decline in flow is abnormal.
Major brokerage firms go online
Speaking of Bitcoin ETFs, the world's largest brokerage firms, from Morgan Stanley and Merrill Lynch to Bank of America and Wells Fargo, have not yet unleashed their army of wealth managers, leaving investors largely unable to access these products. We believe this will change in 2025, as the trillions of dollars managed by these firms will begin to flow into Bitcoin ETFs.
Investors are gradually increasing
In the seven years that Bitwise has helped investment professionals gain exposure to cryptocurrency, we have identified a clear pattern: most investors start with a small allocation and then gradually increase it. We speculate that most investors buying Bitcoin ETFs in 2024 will double down in 2025.
Coinbase will become the largest trading broker
In 2023, investors could purchase Coinbase stock at $35. Today, it trades at $344, nearly a tenfold increase. We believe it can rise even higher. Our prediction is that by 2025, the trading price of Coinbase stock will exceed $700 per share (more than double today's price). This would make Coinbase surpass Charles Schwab to become the world's most valuable trading broker. Why? Coinbase is not just a broker. Three major catalysts will help it achieve this goal:
Stablecoins
Due to a partnership with USDC issuer Circle, Coinbase's stablecoin business is thriving. So far, its stablecoin revenue has surged to $162 million (a growth of 31%). If our assessment of the trajectory of stablecoin development is correct, this trend should continue.
Base
Last year, Coinbase launched a brand new EVM-based Layer 2 network called Base. Now, its trading volume and TVL rank second. With growth comes revenue—substantial revenue. Base is now generating tens of millions of dollars in revenue every quarter. As more developers, users, and capital flow into the ecosystem, we expect revenues to grow even further.
Staking and custodial services
As of the third quarter, these two major business lines generated $589 million in revenue. This is an increase of $304 million (a growth of 106%) compared to the same period last year. Both businesses are driven by asset balances and net new asset flows. We expect both businesses to grow significantly in 2025, pushing the annual revenue of these lines above $1 billion.
2025 will be the 'Crypto IPO Year'
The cryptocurrency sector has been relatively quiet on IPOs over the past few years. But we expect a wave of IPOs from crypto unicorn companies to come in 2025.
Why now? The backdrop of publicly traded crypto companies is vastly different from a few years ago. Cryptocurrency prices are rising, investor demand is growing, institutional adoption is surging, blockchain technology has become mainstream, the macro environment is favorable, and perhaps most importantly, the political environment is warming. This is the recipe for many industry giants to go public. Here are five companies that may go public in 2025:
Circle
USDC is one of the largest stablecoins, and its issuer has been actively preparing for an IPO for some time. Circle's strong position in the stablecoin market, along with its continuous expansion into new financial services, could prompt it to go public.
FIGURE
Figure is known for utilizing blockchain technology to provide various financial services such as mortgages, personal loans, and asset tokenization. Reports suggest that the company has been exploring the possibility of an IPO since 2023, and with Wall Street's increasing obsession with tokenization, now might be the right time.
Kraken
As one of the largest cryptocurrency exchanges in the U.S., Kraken has been considering an IPO since at least 2021. The company's plans were postponed due to market conditions but may come back into focus in 2025.
Anchorage Digital
Anchorage provides infrastructure services for digital assets and has a diversified client base, including investment advisors, asset managers, and venture capital firms. The company’s status as a federally chartered bank and its comprehensive cryptocurrency services could facilitate its public listing.
Chainalysis
As a market leader in blockchain compliance and smart services, Chainalysis is a major potential candidate for entering the market in 2025. The company's unique products and growth trajectory make it quite likely to enter the IPO market, especially considering the increasing importance of compliance in the cryptocurrency industry.
AI Agent will lead the meme explosion
As we enter 2025, we seem to be on the verge of a bigger Meme frenzy than in 2024. For example, recent interactions between a16z's Marc Andreessen and an autonomous chatbot named Truth Terminal have led to the AI promoting an obscure memecoin—GOAT. Starting as a quirky experiment, it quickly became an asset worth over $1.3 billion, demonstrating the vast potential when you mix AI with the wild world of memecoins.
But the breakthrough that excites us the most is Clanker, an AI agent designed to autonomously deploy tokens via Coinbase’s Layer 2 scaling solution Base. Users just need to tag Clanker in a post on Farcaster and tell the AI agent to publish a token with a given name and image, and it will automatically deploy the token. In less than a month, Clanker has released over 11,000 tokens (generating over $10.3 million in fees). We believe that tokens launched by AI will drive a new wave of memecoin frenzy in 2025. Are these memecoins useful in the real world? Unlikely. Will most of them go to zero? Yes. But they represent an interesting collision of two breakthrough technologies—AI and crypto—that is worth watching.
The number of countries holding Bitcoin will double
We don't know if the U.S. will establish a Bitcoin strategic reserve by 2025, but it is certainly a possibility. Senator Cynthia Lummis proposed a bill that would require the U.S. to purchase one million Bitcoins over the next five years, and elected President Trump supported the idea as well. However, Polymarket considers this possibility to be below 30%, and what right do we have to contradict the truth? Nevertheless, we believe it is not significant.
The U.S. is actively considering establishing a Bitcoin strategic reserve, which will spark an arms race globally, prompting governments to purchase Bitcoin early. According to BitcoinTreasuries.net, currently, nine countries hold Bitcoin (led by the U.S.). We expect this number to double by 2025.
Emerging crypto companies will enter stock indices
Most ordinary American investors have not yet been exposed to cryptocurrency. Cryptocurrency is a new asset class, and many investors either don't understand it or simply choose to stay away. Yet almost every investor has funds tracking the S&P 500 index or Nasdaq 100 index. However, so far, these indexes do not include the largest cryptocurrency public companies—Coinbase and MicroStrategy. We expect this to change at the next major restructuring of these two indexes, which could have a significant impact.
Consider this: $10 trillion in assets directly track the S&P 500 index, and another $6 trillion in assets benchmark against it. If Coinbase joins the index, we expect funds will have to purchase about $15 billion in stock. Given the relative size of funds tracking the Nasdaq 100 index, the impact on MicroStrategy is expected to be smaller, but still significant.
The relaxation of 401k plans will bring a substantial influx of liquidity
In March 2022, the U.S. Department of Labor issued guidance 'reminding 401(k) plan fiduciaries of the significant risks of adding cryptocurrency investment options to their plans.' The Department even stated that it would 'conduct an investigation plan to protect plan participants from these risks.' With the new government in Washington, we expect the Department of Labor to soften this guidance. There are at least $80 billion reasons.
The 401(k) plans in the U.S. hold $8 trillion in assets. More funds flow into these funds every week. If cryptocurrency occupies 1% of the 401(k) assets, that would mean $80 billion in new capital flowing into this space, and continuing to flow in thereafter. A 3% return would yield $240 billion. That's a big deal.
The stablecoin market will reach $400 billion
The boom of stablecoins in 2025 will push the market capitalization of stablecoins to reach or exceed $400 billion. Four categories of catalysts will drive this growth:
Stablecoin legislation
For new policymakers in Washington supporting cryptocurrency, comprehensive stablecoin legislation is the lowest hanging fruit. Who will regulate them? What are the appropriate reserve requirements? At that time, large traditional banks like JPMorgan are expected to enter this space.
Fintech applications
Payment giant Stripe spent $1.1 billion in October to acquire the stablecoin platform Bridge, calling stablecoins the 'superconductor for financial services' due to their speed, accessibility, and low cost. PayPal launched its stablecoin (PYUSD) in 2023, and Robinhood recently announced plans to collaborate with some cryptocurrency companies to launch a global stablecoin network. As stablecoins penetrate popular fintech applications, we see the asset management scale and trading volume of stablecoins skyrocketing.
Global trade and remittances
Stablecoins have been encroaching on the global payment and remittance markets. We see that stablecoin transaction volume will reach $8.3 trillion in 2024, second only to Visa's $9.9 trillion payment volume during the same period. Moreover, stablecoin giant Tether recently financed a $45 million crude oil transaction through its USDT stablecoin, clearly demonstrating the potential of stablecoins to facilitate large-scale global trade. As digital dollars continue to disrupt these massive markets, the demand for stablecoins will continue to grow.
Bull market growth
Finally, there is one more obvious catalyst: the bull market. The asset management scale of stablecoins tends to expand with the growth of the cryptocurrency economy. We are optimistic about cryptocurrency in 2025, and thus we are also optimistic about stablecoins.
The RWA market size will exceed $50 billion
Three years ago, the 'tokenization' of real-world assets (RWAs, i.e., private credit, U.S. Treasuries, commodities, and stocks) in the cryptocurrency industry was less than $2 billion. Today, the market size has reached $137 billion. What has caused such massive growth? Why tokenize RWA, that is, represent real assets on the blockchain? It offers instant settlement, significantly lower costs than traditional securitization, and 24/7 liquidity, while also bringing transparency and access to nearly all asset classes. This is why Larry Fink, CEO of BlackRock—once a Bitcoin skeptic—is now the biggest advocate for tokenization—calling it 'the next generation market will be tokenization of securities.' It is worth emphasizing: these words come from the leader of the world's largest asset management company.
In our view, Wall Street has just begun to realize this, which means that large institutional funds will soon flood into tokenized RWA. We believe that by 2025, the market size for tokenized RWA will reach $50 billion and could potentially grow exponentially: Venture capital firm ParaFi recently predicted that the tokenized RWA market will grow to $2 trillion by 2030, while the Global Financial Market Association predicts it will reach $16 trillion.
The price of Bitcoin will exceed a million dollars in 2029
When making predictions, people often look at the next year. But why? We are long-term cryptocurrency investors at Bitwise, so let's look further ahead. We believe Bitcoin will surpass the gold market by 2029. Based on gold's current market capitalization, this implies Bitcoin will rise to over $1 million per coin. Why 2029? Bitcoin has historically cycled every four years. While there's no guarantee this will continue, 2029 will mark the peak of the next cycle (and also the 20th anniversary of Bitcoin's birth). If the U.S. announces the purchase of 1 million Bitcoins as a strategic reserve, Bitcoin will reach a price of $1 million per coin faster.
