Written by: Nina Bambysheva, Forbes
Compiled by: Luffy, Foresight News
Cryptocurrency winter? It's over. The decline of the crypto empire and courtroom dramas? All in the past. Survivors? Battle-tested, eyes wide open, as if this is a new gold rush.
After years of conflict with the U.S. Securities and Exchange Commission (SEC), Bitcoin and Ethereum exchange-traded funds (ETFs) have finally arrived. According to cryptocurrency research firm K33 Research, as of December 16, U.S. Bitcoin ETFs held assets worth $129 billion, surpassing the $125 billion of gold ETFs.
The market excitement following the U.S. elections, combined with Donald Trump's promise to make the U.S. the 'world's cryptocurrency capital' and establish a strategic Bitcoin reserve, led Bitcoin prices to briefly surpass $100,000.
Solana is seizing development opportunities, thanks to the memecoin hype and the rise of new narratives like DePIN. DePIN is a network that uses blockchain technology to decentralize the control and ownership of physical infrastructure. Platforms like Polymarket (where users can bet on the outcomes of U.S. presidential elections) and the battle royale game Off The Grid have already succeeded in the mainstream market. A new wave of 'degens' is betting on tokens like fartcoin and dogwifhat, both of which currently have market capitalizations exceeding $1 billion.
Rob Hadick, a general partner at the San Francisco-based cryptocurrency venture capital firm Dragonfly, stated: "This year, cryptocurrency has entered mainstream consciousness in a way not seen since 2021; it is now a sustainable long-term asset class that will have a voice and play a significant role." "If you look at the impact of cryptocurrency on elections, whether it's crypto political donations or promoting it among legislators and presidential candidates, it's unprecedented and a major step toward the legitimization of cryptocurrency."
Donald Trump attended the 2024 Bitcoin conference held in Nashville, Tennessee. Photo credit: (The Washington Post)
With Trump and a cohort of pro-crypto officials preparing to take office, what industry insiders are calling the 'Golden Age of Cryptocurrency' has arrived. Here are the trends that are brewing:
Historical highs and U.S. Bitcoin reserves
The art of bold price predictions is back in vogue. Cryptocurrency asset management firm Bitwise predicts that if the U.S. were to establish a strategic reserve similar to that of oil or gold, Bitcoin's price could reach $200,000 or even $500,000. The logic is: official U.S. Bitcoin reserves would trigger global FOMO.
Trump proposed using 200,000 Bitcoins (worth $21 billion) seized from criminals to start a reserve at the Bitcoin conference in Nashville in July. However, the legal pathway is unclear, including whether Congressional approval is needed or if the executive branch can act unilaterally. Pro-crypto Senator Cynthia Lummis proposed a reserve scheme run by the Treasury in July. Skeptics argue that Bitcoin's volatility could undermine financial stability. Trump's silence on whether the U.S. will purchase more Bitcoin in the open market adds another layer of uncertainty.
Cryptocurrency regulatory reset: Friendly Washington
The new administration is expected to be the most crypto-friendly government to date. Some significant government appointments regarding cryptocurrency include:
U.S. Securities and Exchange Commission (SEC): Former SEC commissioner and cryptocurrency supporter Paul Atkins is set to replace crypto adversary Gary Gensler, who is known for suing and enforcing against crypto companies during his tenure.
Commodity Futures Trading Commission (CFTC): Brian Quintenz, policy director at Andreessen Horowitz and former CFTC commissioner, is a leading candidate to lead the agency.
Treasury Department: Hedge fund billionaire and Bitcoin advocate Scott Bessent is Trump's pick for Secretary of the Treasury.
Ministry of Commerce: Howard Lutnik, CEO of Cantor Fitzgerald (the main custodian of Tether's USDT reserves), will lead the department.
Artificial Intelligence and Cryptocurrency Czar: David Sacks, a long-time venture capitalist who previously worked with Elon Musk at PayPal, will oversee policies in two key areas of Trump’s strategy to enhance national competitiveness.
House Financial Services Committee: Arkansas Republican Congressman French Hill, along with outgoing committee chairman Patrick McHenry, advocates for crypto-friendly legislation. He plans to prioritize the cryptocurrency market structure bill within the first 100 days and investigate the so-called 'Choke Point 2.0,' which many believe unfairly targets the crypto industry through de-banking practices.
"This is a real opportunity to craft good policy for the industry," said Kristin Smith, CEO of the Blockchain Association based in Washington, D.C., which represents over 100 cryptocurrency companies. "The White House has indicated this is a priority. I think we will see a concerted effort across government departments, legislative pushes for market structure and stablecoins, and a significant shift of innovation returning to the U.S.," she added.
New cryptocurrency IPOs and venture capital entering
The process for cryptocurrency IPOs is heating up. Bitwise has listed five companies that may go public next year:
Circle: The issuer of the second-largest stablecoin USDC secretly applied for an IPO in January this year.
Figure: Known for its blockchain-based financial services like mortgages, personal loans, and asset tokenization, the company has been exploring an IPO since last year.
Kraken: The IPO plan for this U.S.-based cryptocurrency exchange dates back to 2021.
Anchorage Digital: Its status as a federally chartered bank may pave the way for its IPO.
Chainalysis: A leader in blockchain compliance and intelligence services, is expected to go public.
Additionally, Hadick of Dragonfly stated: "I expect the LP (limited partners of crypto venture capital firms) market to improve, as they will want to allocate more capital to cryptocurrency. Many traditional Web2 crossover funds will return to the Web3 space. We are already seeing such trends in certain areas, such as stablecoins and payments." He added that venture capital deals often lag behind public market price increases by a quarter or two.
Crypto-related businesses included in major stock indices
MicroStrategy's stock price has risen over 400% this year. With new accounting rules allowing companies to reflect their Bitcoin investments at market value on financial statements, the company is now a component of the Nasdaq 100 index, with analysts predicting it will next be included in the S&P 500 index. This shift could allow MicroStrategy to enter index-tracking funds, thus joining the portfolios of countless U.S. investors. MicroStrategy co-founder and executive chairman Michael Saylor's 'Bitcoin treasury' strategy (selling bonds and stocks to accumulate Bitcoin) has pushed its $86 billion company into the top 100 of the S&P 500 index. Analysts suggest that Coinbase, which has also risen 70% this year, could join this coveted index.
Surge in stablecoins
With the U.S. poised to implement highly anticipated stablecoin legislation, the stablecoin industry is expected to experience explosive growth, with market capitalization poised to double to $400 billion. According to Bitwise, the trading volume of stablecoins will reach $8.3 trillion in 2024, nearly matching Visa's $9.9 trillion payment volume.
Tether and Circle still dominate. However, Hadick warned that their growth could soon stagnate if they continue to operate like asset management companies rather than payment companies.
Stripe invested $1.1 billion in October to acquire the stablecoin platform Bridge, sending a message that stablecoins could become the cornerstone of fintech. Stripe calls it "the superconductor of financial services," boasting its unparalleled speed, low cost, and global reach. Robinhood is also following suit, exploring the creation of a global stablecoin network.
Meanwhile, the next-generation 'Stablecoin 2.0' model is quietly emerging. Ceteris, research director at New York cryptocurrency analysis firm Delphi Digital, explains: "Many new stablecoin models are returning income to token holders or applications that actually attract users. I believe these models are disruptive."
Acceleration of traditional asset tokenization
BlackRock CEO Larry Fink has been advocating for tokenization for years. Everything from real estate to artworks could soon be tokenized. The biggest benefits of tokenization are: instant settlement, lower costs than traditional securitization, round-the-clock liquidity, and transparency.
Three years ago, the cryptocurrency industry had only tokenized $2 billion of real-world assets (RWAs), including private credit, U.S. debt, commodities, and stocks. Today, that number is close to $14 billion. Venture capital firm ParaFi predicts that by 2030, the market for tokenized RWAs could soar to $2 trillion, signaling a significant shift in asset ownership and trading.
New applications, better infrastructure
The buzzword for the end of 2024 is AI agents. Get ready to witness the fusion of artificial intelligence and cryptocurrency, a combination that is closer to science fiction.
This trend is already beginning to show. Take TruthTerminal, for example; this AI agent not only received $50,000 from Marc Andreessen but also became a millionaire using X social media. Its success stems from promoting a token based on absurd memes from the early 2000s (the anonymous creator of the token transferred a large sum into TruthTerminal's wallet, managed by Andy Ayrey).
However, analysts remain cautious. Practical AI agents (like those attempting to execute complex transactions on behalf of users across blockchains) are few and still in early stages. "The excitement around agents stems from their novelty," said Ceteris of Delphi, "but whether good or bad, it could be the biggest bubble of this cycle."
Although the blockchain industry remains fragmented, and most decentralized applications have yet to go mainstream, the work to build strong infrastructure continues. Ceteris explains: "Solana has set the trend for high-throughput blockchain eras, with almost every new chain being launched under this trend, thereby giving rise to a large amount of cheap block space."
Thus, the narrative theme of cryptocurrency has shifted from survival to prosperity. This is just part of what might surprise us next year. You can choose to prepare popcorn for this show or pull out your wallet for the opportunity. Caution is essential; the market will experience peaks and troughs. And this time, the stakes seem higher than ever.
