As 2024 comes to a close, Binance CEO Richard Teng shares the outlook for the crypto industry in 2025. Here are some of his insights.
Characterizing the crypto market in 2024 and how it fits into 2025:
● 2024 was a new era for cryptocurrencies with significant developments, including Bitcoin and the total market capitalization of cryptocurrencies reaching new all-time highs, spot Bitcoin ETFs in the U.S. that have accumulated over $31 billion in net inflows and over $100 billion in assets under management (AUM). They have been successful beyond expectations. Spot Ether ETFs joined in July 2024, which have received over $730 million in inflows and more than $9 billion in AUM.
● Regulatory developments around the world, particularly MiCA in Europe. With pro-crypto elected president Donald Trump and several pro-crypto politicians in the Senate and House of Representatives, new developments in crypto legislation are likely to emerge in 2025.
○ This is the first U.S. president with multiple NFT collections and his own DeFi collection. Developments in crypto regulation from the new U.S. government are expected in 2025, encouraging greater crypto participation across the market, especially from U.S.-based TradFi, and helping to inform crypto legislation for other countries around the world.
○ There is also the potential for a Strategic Bitcoin Reserve in the U.S., which could be a significant development and lead many other countries to do the same. In this scenario, Bitcoin could reach new heights in terms of adoption.
● The total supply of stablecoins has reached an all-time high (ATH) of over $200 billion, showing the explosive growth of this important product. A recent report from Castle Island Ventures, Brevan Howard Digital, and Visa showed that stablecoin settlement volumes are also at ATH (over $2.6 trillion in the first half of 2024).
● DeFi has been growing and has over $125 billion in total value locked (TVL) along with new developments in 2024. Additionally, major U.S. institutions like BlackRock and Fidelity have already committed to the tokenization of real-world assets (RWAs), which is considered an important step in driving blockchain adoption for traditional finance (TradFi).
● The resilience and success of cryptocurrencies have attracted a lot of talent to the industry, and we are seeing more developers experimenting with new projects. We expect to see another year of strong innovation and project growth in 2025.
How the market can evolve in the new year from regulatory progress to industry developments
● We expect to see developments in all areas. Crypto regulation saw significant growth worldwide in 2024, and we expect to see more in 2025. Given the recent presidential election in the U.S. and the expected crypto regulation from its new government, we anticipate that other countries will follow the U.S. example and enact more legislation worldwide.
Institutional play
● In terms of institutional interest, financial giants like BlackRock and Fidelity entered the crypto business in 2024, and we expect to see new players next year. More companies are learning about crypto and integrating crypto features like tokenization into their businesses. This is a trend that has been growing for years, and we expect to see more developments in this regard.
● This year we saw that spot Bitcoin and Ether ETFs were approved and successfully traded in the U.S. Given the pro-crypto government entering in January 2025, and the recent filings of new ETFs by existing issuers, we are likely to see more ETFs approved next year. This will bring in more institutional investors as cryptocurrencies become a larger part of the traditional market.
The memecoin craze
● Memecoins highlight the robustness of the existing token creation and trading infrastructure on-chain. It is a truly revolutionary development that today, globally tradable and permissionless assets can be created and traded in volumes of millions of dollars within hours and at minimal costs. Given the current focus on memecoins, the ability to create new tokens at virtually no cost is expected to lead to a significant oversupply of various memecoins in the market. Ultimately, attention and resources are likely to consolidate around a few select memecoins that demonstrate longevity and resilience. Examples of such enduring memecoins include $DOGE and $SHIB, which have maintained their presence for several years.
● At Binance, we focus on the big picture, recognizing the potential of some memecoins to evolve as significant players within the ecosystem while understanding the speculative nature of the trend and highlighting to our users the associated risks. Although many memecoins may not last, they reflect the innovative and dynamic nature of the crypto space and resonate with a young, internet-savvy demographic. This makes them worthy of being understood as part of the broader evolution of blockchain technology.
Approaches for Binance in 2025
● Continue to advance in compliance and be the industry leader in user protection and security to be the most trusted exchange in the world for users and investors to safely engage in the crypto space.
● Binance will continue to make education a major focus, educating new crypto users entering the market daily. The recent growth of Bitcoin has helped bring cryptocurrencies to new groups of people worldwide, and we know that more people will join this industry in the coming years.
● Product innovation, including significant developments in AI, and working with all types of institutions and users to safely integrate them into cryptocurrencies.