Author: Matt Hougan, Chief Investment Officer of Bitwise; Edited by: 0xjs@Golden Finance
Every year, the Bitwise team comes together to make annual predictions about the future of cryptocurrency. This process involves dozens of team members engaging in hours of discussion, debate, and reflection. It is one of the most exciting things we do each year.
We will release our 2025 predictions on December 10. Hint: We believe 2025 will be wild. But before we make predictions for next year, it's worth reflecting on the performance of 2024.
Setting the background: Reflecting on December 2023
First, let's set the scene.
We released our 2024 predictions on December 12, 2023. At that time, cryptocurrency was in a very different position. Bitcoin's trading price was $43,750, and anti-crypto rhetoric in Washington was intense. Just days before we released our 2024 predictions, JPMorgan CEO Jamie Dimon testified at a congressional hearing that he has been 'strongly opposed to cryptocurrencies, Bitcoin, etc.' He then said, 'If I were the government, I would shut it down.'
The progress made in 2024 is astounding. Bitcoin's current trading price is close to $100,000, pro-crypto politicians dominate Washington, and Wall Street firms are eagerly developing in this space. But when we set our annual predictions in December 2023, none of this was obvious.
Let's see how we did.
2024 Prediction 1: The trading price of Bitcoin will exceed $80,000, setting a new all-time high.
Result: Correct
We were correct in this prediction. Bitcoin broke $80,000 in November and continued to rise, currently trading close to $100,000. Our argument at the time—that the approval of a spot Bitcoin ETF and the Bitcoin halving would jointly drive up prices—was completely correct.
We will announce our price targets for 2025 next week and increase the price targets for Ethereum and Solana. Stay tuned.
Prediction 2: A spot Bitcoin ETF will be approved and will become the most successful ETF launch in history.
Result: Correct
This is also a victory. The spot Bitcoin ETF approved in January 2024 has become the most successful ETF launch to date. As of December 1, 2024, the Bitcoin ETF has attracted $31 billion in inflows. The previous record for 'the most successful ETF launch ever' was held by the Invesco QQQ Trust (QQQ), which listed in 1999 and attracted $5 billion in assets in its first year. Gold ETFs attracted less than $2 billion in their first year. The inflows to the Bitcoin ETF are multiples of that figure and are still growing.
Prediction 3: Coinbase's revenue will double, exceeding Wall Street expectations (earnings) by at least 10 times.
Result: Correct
It will be a close match. Coinbase's revenue was $3.1 billion in 2023, and $4.1 billion in the first three quarters of 2024. Can it reach $6.2 billion by the end of the year? I think it can. The fourth quarter is an extraordinary quarter for cryptocurrency.
Coinbase remains one of the most fascinating companies in the world, and in our view, the company is undervalued. Next week, we will also release a series of predictions related to Coinbase.
Prediction 4: Funds settled using stablecoins will surpass those settled using Visa.
Result: Incorrect
In the first six months of 2024, global stablecoin settlement amounted to $5.1 trillion, a significant increase from the same period last year. However, they have yet to catch up with Visa, which had $6.5 trillion in settlements during the same period. Close, but not quite victory.
Prediction 5: As Wall Street prepares to tokenize real-world assets, JPMorgan will tokenize a fund and launch it on-chain.
Result: Incorrect
I really hope this dream comes true. It would be a sweet irony to see JPMorgan (whose CEO once angrily called for Washington to 'shut down' cryptocurrency) tokenize its own fund.
We are very close to success! Wall Street tokenized funds are a major theme for 2024. BlackRock, Franklin Templeton, Guggenheim, UBS, and Société Générale have all taken steps in this direction. JPMorgan has invested heavily in tokenization, reshaping its tokenization platform and calling tokenization the 'next generation financial infrastructure.' However, the company has not actually launched a fund, so we cannot claim victory.
Prediction 6: As users flock to crypto applications, Ethereum's revenue will more than double to $5 billion.
Result: Incorrect
What we said before was outrageous. In 2024, activity in Ethereum-based applications surged, but year-end revenue may be slightly below last year's $2 billion. Why? The 'Dencun' upgrade in March reduced network fees by 99%. We ultimately believe this is beneficial for the network, but the short-term hit to revenue is challenging.
Prediction 7: Taylor Swift will launch NFTs to connect with fans in new ways.
Result: Incorrect
This did not happen, but it remains an area to watch in 2025. Reports suggest Taylor has been concerned about whether NFTs are securities. If we gain more clarity on NFT regulation in the coming year, this issue may come back to the forefront.
Prediction 8: AI assistants will use cryptocurrency for online payments and confirm cryptocurrency as the 'native currency of the internet.'
Result: Correct
In July, legendary venture capitalist Marc Andreessen donated $50,000 worth of Bitcoin to an AI bot called Truth Terminal. The bot ultimately helped promote a meme coin—Goatseus Maximus (GOAT)—which is currently valued at $674 million. We speculate that AI bots will make widespread use of cryptocurrencies and stablecoins in the coming years. Although the GOAT experiment was crazy, it provided an astonishing proof of concept.
Prediction 9: As prediction markets become the new 'killer app' for cryptocurrency, over $100 million will be invested in them.
Result: Correct
This is the prediction I am most proud of.
In December 2023, few had heard of Polymarket, a cryptocurrency-based prediction market where users can bet on the outcomes of global events. But we are fans of the platform and believe it will take off as the U.S. elections approach. Wow, we were right: the total amount of bets on the platform surged from $8 million when we predicted it to over $500 million at its peak. Polymarket became a household name in the process. It also proved its extraordinary foresight in the 2024 elections.
In our 2025 prediction article, we will forecast the next breakthrough crypto application.
Prediction 10: Significant upgrades to the Ethereum blockchain will bring average transaction costs below $0.01, paving the way for more mainstream uses.
Result: Correct
Let me calculate this. The average transaction costs of many Ethereum layer 2 networks have declined by more than 90% year-over-year, currently hovering between $0.01 and $0.02. But it dipped below $0.01 this summer, and I believe we will soon reach that level again as the underlying technology continues to improve. Transactions on major blockchains costing less than a cent will change the world.
Additional Prediction: By the end of 2024, a quarter of financial advisors will allocate cryptocurrency in client accounts.
Result: To be determined
Every year, we survey financial advisors to see how many hold cryptocurrency in client accounts. In 2023, only 11% said 'yes.' The survey for the end of 2024 is still ongoing, so we do not yet know if it will reach the 25% level. One potential headwind is that major banks like Wells Fargo, UBS, and Merrill have yet to approve a spot Bitcoin ETF. But we believe it is just a matter of time, not if.
Conclusion
So how did we do? Six correct, four incorrect, and one pending. Considering how aggressive our predictions were—Bitcoin prices doubling, prediction markets soaring, Ethereum fees dropping by 99%, all in a rapidly changing field—we accept it.
But one thing is certain: our accuracy rate will be higher in 2025. Stay tuned.
