By Matthew Sigel, Head of Digital Asset Research & Patrick Bush, Senior Investment Analyst
Compilation | Wu Talks about Blockchain
Please note that VanEck may hold positions in the digital assets described below, original link:
https://www.vaneck.com/us/en/blogs/digital-assets/matthew-sigel-vanecks-10-crypto-predictions-for-2025/
Before we get into our 2025 predictions, let’s review how our 2024 predictions fared. Out of 15 predictions made in December 2023, we scored 8.5/15. While a batting average of 0.566 isn’t perfect, it’s good enough to keep us “in the game.” With Bitcoin (BTC) crossing $100,000 and Ethereum (ETH) crossing $4,000, 2024 will undoubtedly be a year to remember, even if we missed a few predictions.
VanEck is an investment management company founded in New York, USA in 1955 by John Van Eck. It has a rich history and extensive influence in the investment field. In January 2024, the Bitcoin spot ETF HODL and Ethereum spot ETF ETHV approved by the SEC began trading. It also launched SUI-based ETN in Europe and introduced staking rewards for Solana ETN.
A review of cryptocurrency predictions for 2024:
1. The launch of Bitcoin spot ETPs — (1 point)
2. Bitcoin halving went smoothly — (1 point)
3. Bitcoin hits all-time high in Q4 2024 — (1 point)
4. Ethereum remains second behind Bitcoin — (1 point)
5. L2 dominates Ethereum activity (but L2 TVL is still lower than Ethereum) - (0.5 points)
6. Stablecoin market capitalization hits all-time high — (1 point)
7. Decentralized Exchange (DEX) spot trading volume accounts for a record share — (1 point)
8. Solana (SOL) outperforms Ethereum — (1 point)
9. DePIN Network Adoption Growth — (1 point)
Now, let’s get to the meat of the matter: the cryptocurrency predictions for 2025.
Top 10 Cryptocurrency Predictions for 2025:
1. The cryptocurrency bull market reached an interim high in the first quarter and set a new high in the fourth quarter.
2. The United States embraces Bitcoin through strategic reserves and increased cryptocurrency adoption.
3. The total value of securities tokenization exceeds $50 billion.
4. The daily settlement volume of stablecoins reaches US$300 billion.
5. On-chain activity of AI agents exceeds 1 million agents.
6. Bitcoin layer 2 total locked value (TVL) reaches 100,000 BTC.
7. Ethereum data sharding (blob space) generates $1 billion in transaction fees.
8. DeFi hit a new high, with decentralized exchange (DEX) trading volume reaching $4 trillion and total TVL reaching $200 billion.
9. The NFT market is picking up, with trading volume reaching $30 billion.
10. The performance of decentralized application (DApp) tokens is gradually narrowing the gap with Layer 1 tokens.
1. The cryptocurrency bull market reached an interim high in the first quarter and set a new high in the fourth quarter
We expect the cryptocurrency bull run to continue through 2025 and reach its first peak in the first quarter. At the peak of this cycle, we expect Bitcoin (BTC) to be priced at around $180,000, while Ethereum (ETH) will be priced at over $6,000. Other well-known projects, such as Solana (SOL) and Sui (SUI), could break through $500 and $10, respectively.
After this peak, we expect BTC to correct 30% and altcoins to fall even more, up to 60%, with the market consolidating over the summer. However, we expect a rebound in the fall, with major coins regaining momentum and recovering their previous all-time highs by the end of the year. To determine when the market is nearing a top, we are watching for the following key signals:
• Sustained high funding rates: When traders borrow money to bet on rising BTC prices and are willing to pay funding rates of more than 10% for three months or more, it indicates excessive speculation.
BTC perpetual contract funding rate exceeding 10% for several months would be a bearish signal
Data source: GlassNode, as of December 8, 2024.
• Excessive unrealized profits: If a large percentage of investors holding BTC have significant paper profits (profit-to-cost ratio of 70% or more) and remain stable, this indicates that the market is in a frenzy.
• Overvaluation of market capitalization relative to realized value: When MVRV (ratio of market capitalization to realized value) exceeds 5, it indicates that the BTC price is far above the average purchase price, which usually indicates an overheated market.
• Declining Bitcoin dominance: If Bitcoin’s share of the total cryptocurrency market capitalization falls below 40%, it would indicate a flight of speculative funds to riskier altcoins, a typical late-cycle behavior.
• Mainstream speculation phenomenon: Receiving a large number of inquiries from friends outside the crypto field about suspicious projects is often a reliable sign of a top signal.
These indicators have historically proven to be reliable signals of market mania and will guide us in developing our outlook through the expected market cycle through 2025.
Example: A "top signal" text message from an acquaintance from 5 years ago
2. The United States embraces Bitcoin through strategic reserves and cryptocurrency adoption
The election of President Donald Trump has injected significant momentum into the crypto market, with his administration appointing a number of pro-cryptocurrency leaders to key positions, including Vice President JD Vance, National Security Advisor Michael Waltz, Commerce Secretary Howard Lutnick, Treasury Secretary Mary Bessent, Securities and Exchange Commission (SEC) Chairman Paul Atkins, Federal Deposit Insurance Corporation (FDIC) Chairman Jelena McWilliams, and Department of Health and Human Services (HHS) Secretary RFK Jr. These appointments not only mark the end of anti-crypto policies, such as the systematic “de-banking” of crypto companies and their founders, but also the beginning of a policy framework that positions Bitcoin as a strategic asset.
The development of crypto ETPs: physical subscription, staking and new spot approvals
New SEC leadership or the Commodity Futures Trading Commission (CFTC) is expected to approve multiple new spot crypto exchange-traded products (ETPs), including VanEck's Solana product. Ethereum ETP functionality will be expanded to support staking, further enhancing its utility for holders, while both Ethereum and Bitcoin ETPs will support physical subscription/redemption. In addition, the SEC or Congress may repeal SEC Accounting Bulletin No. 121 (SAB 121), paving the way for banks and broker-dealers to custody spot crypto assets, further integrating digital assets into traditional financial infrastructure.
Sovereign Bitcoin Adoption: Federal, State, and Mining Expansion
We predict that by 2025, the federal government or at least one state (such as Pennsylvania, Florida, or Texas) will have established a Bitcoin reserve. At the federal level, this could be achieved through executive order using the Treasury’s Exchange Stabilization Fund (ESF), while bipartisan legislation remains an unknown. Meanwhile, state governments may act independently, looking to Bitcoin as a hedge against fiscal uncertainty or a means to attract crypto investment and innovation.
In terms of Bitcoin mining, the number of countries using government resources to mine is expected to increase from the current 7 to double digits, driven by the adoption trend of BRICS countries. Russia has made it clear that it will settle international trade in cryptocurrency, further highlighting the importance of Bitcoin in global economic strategy.
Number of countries using government resources for mining
Data source: VanEck Research, as of December 2024.
We expect this pro-Bitcoin stance to extend to the broader U.S. crypto ecosystem. With increased regulatory clarity and incentives, the U.S. will increase its share of global crypto developers from 19% to 25%, attracting more talent and businesses to return. At the same time, U.S. Bitcoin mining will flourish, with its share of global mining power increasing from 28% in 2024 to 35% by the end of 2025, thanks to cheap energy and potential tax incentives. Together, these trends will solidify the U.S.’ leadership in the global Bitcoin economy.
US listed companies’ share of Bitcoin computing power will reach 35%
Data source: JP Morgan, VanEck Research, as of December 6, 2024.
Corporate Bitcoin Holdings: Expected to Grow 43%
In terms of enterprise adoption, we expect companies to continue accumulating Bitcoin from retail investors. Currently, 68 public companies have Bitcoin on their balance sheets, a number expected to grow to 100 by 2025. Notably, we boldly predict that by next year, the total amount of Bitcoin held by private and public companies (currently 765,000 BTC) will exceed Satoshi Nakamoto’s holdings (1.1 million BTC). This means corporate Bitcoin holdings will see significant growth of 43% over the next year.
Gold and Bitcoin Holdings Comparison: Companies and Governments Still Have Room to Grow
Source: VanEck Research, as of December 2024
3. The total value of securities tokenization exceeds $50 billion
On-chain securities to grow 61% by 2024
Data source: RWA.xyz, Deflama, as of December 6, 2024.
Crypto networks promise a better financial system through increased efficiency, decentralization, and transparency. We believe 2025 will be the year that security tokenization takes off. Currently, the total value of securities tokenized on blockchain has reached approximately $12 billion, with the majority ($9.5 billion) being private bond securities on Figure’s semi-permissioned chain, Provenance.
We see great potential for security tokenization to be launched on public blockchains. We speculate that investors have many motivations to drive tokenized equity or bond securities to be issued only on-chain. In the coming year, we expect institutions like DTCC to enable tokenized assets to be seamlessly transferred between public blockchains and private closed-loop infrastructures. This dynamic will drive the establishment of AML (anti-money laundering)/KYC (know your customer) standards for on-chain investors.
As a bold prediction, we expect Coinbase to take the unprecedented step of tokenizing its shares (COIN) and deploying them on its BASE blockchain.
4. Daily settlement volume of stablecoins reaches $300 billion
Monthly stablecoin transfers (USD) increased 180% YoY (2024)
Data source: Artemis XYZ, as of December 6, 2024.
Stablecoins will move from a niche role in crypto trading to a core component of global commerce. By the end of 2025, we expect stablecoin transfers to reach $300 billion per day, equivalent to 5% of DTCC’s current volume and up from about $100 billion in November 2024. This growth will be driven by stablecoin adoption by large technology companies such as Apple and Google and payment networks such as Visa and Mastercard, redefining payment economics.
In addition to transactional uses, the remittance market will see explosive growth. For example, stablecoin transfers between the United States and Mexico could grow fivefold from $80 million per month to $400 million. The driving factors behind this include increased transfer speed, cost savings, and the growing trust of users in stablecoins, who see them as utilities rather than experiments.
Despite the heated discussion surrounding blockchain adoption, stablecoins are undoubtedly the Trojan Horse for this trend.
5. AI Agents Have Over 1 Million On-Chain Activities
AI agent generates $8.7 million in revenue in 5 weeks
Data source: Dune @jdhpyer, as of December 6, 2024.
We believe AI agents will become one of the most compelling narratives driving mass adoption in 2025. AI agents are specialized AI bots designed to help users achieve specific goals, such as “maximize revenue” or “increase engagement on X/Twitter.” These agents are able to autonomously adjust strategies to optimize outcomes, and are typically trained and specialized on data from a specific domain.
Currently, protocols like Virtuals provide tools for users to allow anyone to create AI agents to perform tasks on-chain. Virtuals makes the decentralized AI agent ecosystem accessible to non-technical people, such as fine-tuning experts, dataset providers, and model developers, allowing ordinary users to create their own AI agents. This mechanism will lead to the emergence of a large number of agents, and the creators of the agents can rent them out to generate income.
Currently, the development of AI agents is mainly focused on the DeFi field, but we believe that their applications will go beyond financial activities. Agents can serve as social media influencers, computer players in games, and interactive companions or assistants in consumer applications. For example, AI agents such as Bixby and Terminal of Truths have become important X/Twitter influencers with 92,000 and 197,000 followers respectively. Given the huge potential of AI agents, we expect that by 2025, more than 1 million new AI agents will be created.
6. Bitcoin Layer-2 Total Locked Value (TVL) Reaches 100,000 BTC
Bitcoin L2 locked-in volume reaches 30,000 BTC in 2024, up 600% year-to-date
Data source: Deflama, as of December 6, 2024.
We are closely watching the rise of Bitcoin Layer-2 (L2) blockchains, and these solutions have great potential to transform the Bitcoin ecosystem. By extending Bitcoin's functionality, these L2 solutions are able to achieve lower latency and higher transaction throughput, thereby addressing the limitations of the underlying blockchain. In addition, Bitcoin L2 enhances Bitcoin's capabilities by introducing smart contract capabilities, thereby supporting the construction of a powerful decentralized finance (DeFi) ecosystem around Bitcoin.
Currently, Bitcoin can be transferred to smart contract platforms through bridging or packaging, but these methods rely on third-party systems and are vulnerable to hacker attacks and security vulnerabilities. The Bitcoin L2 solution aims to address these risks through a framework that integrates directly with the Bitcoin underlying layer and reduces reliance on centralized intermediaries. Although liquidity limitations and adoption barriers remain, Bitcoin L2 enables BTC holders to actively use their Bitcoin in a decentralized ecosystem with greater confidence through enhanced security and decentralization.
Data shows that the Bitcoin L2 program has experienced explosive growth in 2024, with total locked volume (TVL) exceeding 30,000 BTC, equivalent to approximately US$3 billion, a 600% increase year-to-date. Currently, more than 75 Bitcoin L2 projects are in development, but only a few are expected to achieve significant adoption in the long term.
This growth reflects the strong demand from BTC holders for asset yield generation and broader utility. As chain abstraction technology and Bitcoin L2 mature, Bitcoin will become a core component of DeFi, providing practical products for end users. For example, the Ika platform on Sui or the Near chain abstraction technology used by Infinex demonstrate how innovative multi-chain solutions can enhance Bitcoin's interoperability with other ecosystems.
By enabling secure and efficient on-chain lending and other permissionless DeFi solutions, Bitcoin L2 and abstraction technologies transform Bitcoin from a passive store of value to an active participant in the decentralized ecosystem. As adoption scales, these technologies will unlock massive on-chain liquidity, cross-chain innovation opportunities, and drive a more integrated financial future.
7. Ethereum Data Sharding (Blob Space) Generates $1 Billion in Fees
Number of Ethereum data shards published daily
Data source: Dune @hildobby, as of December 6, 2024.
The Ethereum community is actively discussing its ability to capture value through data shards (Blob Space) of the Layer-2 (L2) network, which is a key part of its expansion roadmap. Blob Space is a specialized data layer where L2 compresses its transaction history and submits it to Ethereum, paying ETH fees per data shard. This architecture supports Ethereum's scalability, but currently L2 has a low return on value to the mainnet, with a gross margin of about 90%. This has raised concerns that Ethereum's economic value may be excessively transferred to L2, resulting in underutilization of the underlying network.
Despite the recent slowdown in Blob Space growth, we forecast a significant expansion in its use by 2025, driven by three key factors:
1. Explosive adoption of L2
Transaction volume on Ethereum L2 is growing at an annualized rate of more than 300%, and users are migrating to environments such as DeFi, games, and social applications for lower costs and higher throughput. As consumer-facing dApps gain popularity on L2, more transactions will flow back to Ethereum for final settlement, significantly increasing demand for Blob Space.
2. Rollup Technology Optimization
Advances in Rollup technology, such as improvements in data compression and reduced costs for submitting data to Blob Space, will encourage L2 to store more transaction data on Ethereum, unlocking higher throughput without sacrificing decentralization.
3. Introduction of high-fee scenarios
The rise of enterprise applications, zk-rollup-driven financial solutions, and tokenized real-world assets will drive high-value transactions. The priority of these applications for security and immutability will increase the willingness to pay Blob Space fees.
By the end of 2025, we expect Blob Space fee revenue to grow from negligible levels today to over $1 billion. This growth will solidify Ethereum’s position as the final settlement layer for decentralized applications, while strengthening its ability to capture value from the rapidly expanding L2 ecosystem. Blob Space will not only expand the Ethereum network, but will also become a key revenue source, creating a balance in the economic relationship between the mainnet and L2.
8. DeFi hits new highs: decentralized exchange (DEX) trading volume reaches $4 trillion, and the total locked value (TVL) reaches $200 billion
DeFi Total Locked Value (TVL) Trend
Data source: Deflama, as of December 6, 2024.
Despite record volumes on decentralized exchanges (DEXs) and relative to centralized exchanges (CEXs), DeFi’s total value locked (TVL) remains 24% below its peak. We expect DEX volumes to exceed $4 trillion by 2025, accounting for 20% of CEX spot volume. This growth will be driven by the popularity of AI-related tokens and new consumer-facing dApps.
In addition, security tokenization and the inflow of high-value assets will further drive DeFi growth, injecting new liquidity into it and expanding its functionality. As the demand for decentralized financial infrastructure rises in the evolving digital economy, we expect DeFi TVL to rebound to over $200 billion by the end of 2025.
9. NFT market recovers, with trading volume reaching $30 billion
NFT trading volume declined in 2024 and is expected to rebound in 2025
Data source: as of December 6, 2024.
The 2022–2023 bear market hit the NFT space hard, with trading volumes down 39% from 2023 and 84% from 2022. While fungible token prices began to recover in 2024, most NFTs lagged, with weak prices and low activity until a turning point in November. Despite these challenges, some projects with strong community ties performed well by transcending speculative value.
For example, Pudgy Penguins successfully transitioned to a consumer brand through collectible toys, while Miladys gained cultural recognition in satirical internet culture. Similarly, Bored Ape Yacht Club (BAYC) continues to grow as a dominant cultural force, attracting widespread attention from brands, celebrities, and mainstream media.
As crypto wealth recovers, we expect newly wealthy users to diversify into NFTs not only as speculative assets, but also as assets of lasting cultural and historical significance. Well-known series like CryptoPunks and Bored Ape Yacht Club (BAYC) will benefit from this shift due to their strong cultural value and relevance. While BAYC and CryptoPunks are still well below their historical trading peaks (down approximately 90% and 66% in ETH terms, respectively), other projects such as Pudgy Penguins and Miladys have surpassed their previous price highs.
Ethereum still dominates the NFT market, hosting the majority of significant collections. In 2024, it accounts for 71% of NFT transactions, a share that is expected to rise to 85% by 2025. This dominance is also reflected in the market capitalization rankings, with 16 of the top 10 and top 20 collections based on Ethereum, further emphasizing the blockchain’s centrality to the NFT ecosystem.
While NFT trading volumes may not return to the frenetic highs of previous cycles, we believe $30 billion in annualized volume is achievable, which is about 55% of the peak in 2021. The market will shift more toward sustainability and cultural relevance rather than speculative frenzy.
10. Decentralized Application (DApp) Tokens Close the Performance Gap with Layer 1 Tokens
Layer 1 Tokens Will Outperform Mainstream DApps by Twice in 2024
Data source: Market Vectors, as of December 8, 2024.
A notable theme of the 2024 bull run is the significant outperformance of Layer 1 (L1) blockchain tokens over decentralized application (DApp) tokens. For example, the MVSCLE index, which tracks smart contract platforms, is up 80% year-to-date, while the MVIALE index of application tokens is up just 35% over the same period.
However, we expect this trend to shift by the end of 2024, with the launch of a wave of new DApps, which will bring value to the associated tokens with innovative and useful products. Among them, artificial intelligence (AI) is a prominent category of DApp innovation. In addition, the Decentralized Physical Infrastructure Network (DePIN) project shows great potential to not only attract the interest of investors and users, but also promote a broader performance rebalancing between L1 tokens and DApp tokens.
The change highlights the importance of utility and product-market fit in determining the success of utility tokens in the evolving cryptocurrency ecosystem.
