Cryptocurrency winter? Over. The decline of the crypto empire and courtroom dramas? All in the past. Survivors? Battle-tested, eyes on the prize, 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 held by gold ETFs.
The market excitement following the U.S. elections, coupled with Trump's promise to make the U.S. the "world's cryptocurrency capital" and establish a strategic Bitcoin reserve, pushed Bitcoin prices to briefly exceed $100,000.
Solana is seizing development opportunities, thanks to meme coin hype and the rise of new narratives such as DePIN. DePIN is a network that utilizes blockchain technology to decentralize control and ownership of physical infrastructure. Platforms like Polymarket (where users can bet on U.S. presidential election outcomes) and the battle royale game Off The Grid have found mainstream success. A new wave of "degens" is betting on tokens like fartcoin and dogwifhat, both of which currently have market caps 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 awareness in ways unprecedented since 2021; now it is a sustainable long-term asset class that will have a voice and play an important role." "If you look only at the impact of cryptocurrency on elections, whether it's cryptocurrency political donations or promoting it among legislators and presidential candidates, this is unprecedented and a significant step towards the legitimization of cryptocurrency."
With Trump and a cohort of cryptocurrency-supporting officials preparing to take office, the so-called "golden age of cryptocurrency" has arrived. Here are the trends brewing:
Historical highs and U.S. Bitcoin reserves
The art of boldly predicting prices is back in vogue. Cryptocurrency asset management firm Bitwise predicts that if the U.S. establishes strategic reserves similar to oil or gold, Bitcoin's price could reach $200,000, even $500,000. The logic is: official U.S. Bitcoin reserves would trigger global FOMO.
Trump proposed using $200,000 Bitcoin (worth $21 billion) seized from criminals to initiate reserves at the Bitcoin conference in Nashville in July. However, the legal pathway remains unclear: will it require congressional approval, or can the executive branch act unilaterally? Pro-crypto Senator Cynthia Lummis proposed a Treasury-operated reserve scheme in July. Skeptics believe Bitcoin's volatility could jeopardize financial stability. Trump has remained silent on whether the U.S. will buy more Bitcoin on the open market, adding another layer of uncertainty.
Cryptocurrency regulatory reset: Friendly Washington
The new administration is expected to be the most cryptocurrency-friendly government to date. Some key government appointments concerning cryptocurrency include:
U.S. Securities and Exchange Commission (SEC): Former SEC commissioner and cryptocurrency supporter Paul Atkins is set to replace cryptocurrency adversary Gary Gensler, who gained notoriety during his tenure for lawsuits and enforcement against crypto companies.
Commodity Futures Trading Commission (CFTC): Brian Quintenz, former CFTC commissioner and policy director at Andreessen Horowitz, is a leading candidate to head the agency.
Treasury: Hedge fund billionaire and Bitcoin advocate Scott Bessent is Trump's pick for Treasury Secretary.
Commerce Department: Howard Lutnik, CEO of Cantor Fitzgerald (the primary custodian of Tether's USDT reserves), will lead the department.
AI and cryptocurrency czar: David Sacks, a long-time venture capitalist who previously worked with Musk at PayPal, will oversee policy for two key industries in Trump's strategy to enhance national competitiveness.
House Financial Services Committee: Republican Congressman French Hill from Arkansas is advocating for cryptocurrency-friendly legislation alongside outgoing committee chair Patrick McHenry, planning to prioritize a cryptocurrency market structure bill in the first 100 days and investigate the so-called "Choke Point 2.0" action, which many believe unfairly targets the cryptocurrency industry through banking practices.
"This is a real opportunity to set good policy for the industry," said Kristin Smith, executive director 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 collaborative effort from various government departments to legislate market structure and stablecoins, along with significant innovation returning to the U.S.," she added.
New crypto IPOs and venture capital influx
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 this January.
Figure: The company is known for blockchain-based financial services, such as mortgages, personal loans, and asset tokenization, and has been exploring an IPO since last year.
Kraken: The IPO plans for this U.S.-based cryptocurrency exchange date back to 2021.
Anchorage Digital: Its status as a federally chartered bank may pave the way for its listing.
Chainalysis: A leader in blockchain compliance and intelligence services, is expected to go public.
Additionally, Dragonfly's Hadick stated, "I expect the LP (limited partners in cryptocurrency venture capital) market will improve, and they will want to put more money into cryptocurrencies. Many traditional Web2 crossover funds will return to the Web3 industry. We've already seen this trend in some sectors like stablecoins and payments." He added that venture capital deals often lag behind public market price increases by a quarter or two.
Crypto-related companies are being included in major stock indices
MicroStrategy's stock has surged over 400% this year. New accounting rules allow companies to reflect their Bitcoin investments at market value in financial statements, which has led to the company becoming part of the Nasdaq 100 index, with analysts predicting it will soon be included in the S&P 500 index. This change could allow MicroStrategy to enter index-tracking funds, adding it to 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 say Coinbase, which has risen 70% this year, may also join this coveted index.
Surge in stablecoins
With the U.S. set to unveil highly anticipated stablecoin legislation, the stablecoin industry is poised for explosive growth, with a market cap expected to double to $400 billion. According to Bitwise data, stablecoin transaction volumes are projected to reach $8.3 trillion in 2024, nearly equivalent to Visa's $9.9 trillion in payment volumes.
Tether and Circle still dominate. However, Hadick warns that if they continue to operate like asset management companies rather than payment companies, their growth may soon stagnate.
In October, Stripe spent $1.1 billion acquiring the stablecoin platform Bridge, sending a message: stablecoins could become the cornerstone of fintech. Stripe calls it "the superconductor of financial services," boasting unmatched speed, low costs, and global impact. Robinhood is also closely following, exploring the creation of a global stablecoin network.
Meanwhile, the next-generation "stablecoin 2.0" models are quietly emerging. Ceteris, research director at New York-based cryptocurrency analytics firm Delphi Digital, explained, "Many new stablecoin models are providing revenue back to token holders or actual applications that attract users. I think these models are disruptive."
Accelerated tokenization of traditional assets
Larry Fink, CEO of BlackRock, has been promoting tokenization for years. From real estate to artwork, everything could soon be tokenized. The biggest advantages of tokenization are: instant settlement, lower costs compared to traditional securitization, 24/7 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 equities. Today, that figure is approaching $14 billion. Venture capital firm ParaFi predicts that by 2030, the tokenized RWA market could soar to $2 trillion, indicating 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 blend that is closer to science fiction.
This trend has begun to show its potential. Take TruthTerminal, for example, this AI agent not only secured $50,000 from Marc Andreessen but also became a millionaire through leveraging social media X. Its success stems from promoting a token based on absurd memes from the early 2000s (the token's anonymous creator transferred a large sum into the TruthTerminal wallet, which is managed by Andy Ayrey).
However, analysts remain cautious. The number of practical AI agents (like those attempting to execute complex transactions on behalf of users across blockchains) is scarce and still in early stages. "The excitement around agents comes from their novelty," Ceteris of Delphi said, "but whether good or bad, it could be the biggest bubble of this cycle."
Despite the blockchain industry still being fragmented and most decentralized applications not yet mainstream, work continues to build robust infrastructure. Ceteris explained, "Solana has set the trend for high-throughput blockchain eras, and almost every new chain has been launched under this trend, thus a large amount of cheap block space will emerge."
Thus, the narrative around cryptocurrency has shifted from survival to prosperity. This is just part of what may bring surprises next year. You can choose to prepare popcorn for this show or pull out your wallet for this opportunity. Caution is essential, as the market will experience highs and lows. And this time, the stakes seem higher than ever.
This article is republished with permission from: (Foresight News)
Original author: Nina Bambysheva, Forbes
'2025 Cryptocurrency Outlook! Forbes: Get ready to witness the fusion of AI and cryptocurrency, from survival to prosperity.' This article was first published in 'Crypto City.'
