Authors: Matthew Sigel & Patrick Bush
Compiled by: Deep Tide TechFlow
Please note that VanEck may hold the digital assets mentioned below.
Before discussing our outlook for 2025, let's first review the performance of our predictions for 2024. Of the 15 predictions made at the end of 2023, our self-score is 8.5/15. While a 56.6% accuracy rate is not perfect, it is sufficient for us to continue to "stay in the game." With Bitcoin (BTC) surpassing $100,000 and Ethereum (ETH) breaking $4,000, 2024 remains a year worth remembering in the history of cryptocurrencies, even if some predictions did not hit the mark completely.
Review of 2024 Predictions
In our 2024 predictions, we successfully identified several key trends, including:
The inaugural launch of Bitcoin spot ETPs
Bitcoin halving successfully completed
Ethereum remains in second place, only behind Bitcoin
Bitcoin sets new all-time high in Q4 2024
L2 dominates Ethereum activity (but L2 TVL still below Ethereum)
Stablecoin market cap reaches an all-time high
Decentralized exchange trading volume reaches a new record share
Solana (SOL) outperforms Ethereum (ETH)
Growth in DePIN network adoption
While some predictions did not fully materialize, the overall trends still validate our analytical direction.
Top 10 Cryptocurrency Predictions for 2025
The crypto bull market will reach a mid-cycle peak in the first quarter and set a new high by the end of the year.
The US further embraces Bitcoin through strategic reserves and policy support.
The total value of tokenized securities exceeds $50 billion
The daily trading settlement volume of stablecoins reaches $300 billion
On-chain activity of AI agents exceeds 1 million
The total locked value (TVL) of Bitcoin's second-layer network reaches 100,000 BTC
Ethereum's Blob space fee revenue reaches $1 billion
DeFi trading volume reaches a new high of $4 trillion, with a total locked value of $200 billion
NFT market recovery, with annual trading volume reaching $30 billion
The performance of decentralized application (DApp) tokens is gradually catching up with mainstream public chain tokens
Next, we will delve into the background and logic behind some of these key predictions.
1. The crypto bull market reaches a mid-cycle peak in the first quarter and sets a new high in the fourth quarter
We believe that the cryptocurrency bull market in 2025 will continue to develop and reach its first peak in the first quarter. At the peak of this cycle, we expect the price of Bitcoin (BTC) to reach around $180,000, while the price of Ethereum (ETH) will break $6,000. Other well-known projects like Solana (SOL) and Sui (SUI) may exceed $500 and $10, respectively.
After the first peak, we expect BTC to pull back by 30%, while altcoins may drop even more, reaching 60%, reflecting market consolidation in the summer. However, a recovery may occur in the fall, with major tokens regaining momentum and breaking historical peaks again before year-end. To ascertain the timing of the market nearing the peak, we will focus on the following key signals:
Sustained high funding rates: When traders are willing to pay more than 10% funding rates for three months or longer while borrowing to bet on BTC price increases, it indicates speculative overheating.
Excess unrealized profits: If a large proportion of investors holding BTC are in a significant paper profit state (with a profit-to-cost ratio reaching 70% or higher), it indicates that the market is in a euphoric state.
Overvaluation of market cap relative to realized value: When the MVRV (market cap to realized value ratio) score exceeds 5, it indicates that the BTC price is far above the average purchase price, usually signaling that the market is overheated.
Declining Bitcoin dominance: If Bitcoin's share of the total crypto market falls below 40%, it indicates speculation is shifting to higher-risk altcoins, which is typical behavior in the late cycle.
Mainstream speculation: When a large number of friends from outside the crypto space begin to inquire about dubious projects, it is often a reliable signal that the market is nearing a peak.
These indicators have historically been reliable signals of market euphoria, guiding us in shaping our outlook for the market cycle in 2025.
2. The US further embraces Bitcoin through strategic reserves and cryptocurrency adoption
Donald Trump's election has injected significant momentum into the crypto market, with his administration appointing several leaders who support cryptocurrencies to key positions, including Vice President JD Vance, National Security Advisor Michael Waltz, Secretary of Commerce Howard Lutnick, Secretary of the Treasury Mary Bessent, SEC Chairman Paul Atkins, FDIC Chairman Jelena McWilliams, and Secretary of Health and Human Services RFK Jr. These appointments not only mark the end of anti-crypto policies (such as the systemic de-banking of crypto companies) but also signal the beginning of a policy framework that positions Bitcoin as a strategic asset.
Crypto ETPs: Physical creation, staking, and new spot approvals
The new SEC leadership (or possibly the Commodity Futures Trading Commission, CFTC) will approve multiple new spot cryptocurrency exchange-traded products (ETPs) in the US, including VanEck's Solana product. The functionality of Ethereum ETPs will expand to include staking, further enhancing their utility for holders, while both Ethereum and Bitcoin ETPs will support physical creation/redemption. The repeal of SEC rule SAB 121 (whether through the SEC or Congress) will pave the way for banks and brokers to custody spot cryptocurrencies, further integrating digital assets into traditional financial infrastructure.
Sovereign Bitcoin adoption: Federal, state, and mining expansions
We predict that by 2025, the US federal government or at least one state (possibly Pennsylvania, Florida, or Texas) will establish Bitcoin reserves. Federally, this is more likely to be achieved through an executive order utilizing the Treasury's Exchange Stabilization Fund (ESF), although bipartisan legislation remains an unknown factor. Meanwhile, state governments may act independently, viewing Bitcoin as a hedge against fiscal uncertainty or a means to attract crypto investment and innovation.
In Bitcoin mining, the number of countries using government resources for mining is expected to reach double digits (currently seven), thanks to the increasing adoption of cryptocurrencies by BRICS nations. This trend is further propelled by Russia's statement on plans to use cryptocurrencies for settling international trade, highlighting Bitcoin's global influence.
We expect this supportive stance towards Bitcoin to ripple through the broader US crypto ecosystem. With regulatory clarity and incentives attracting talent and companies back, the share of global crypto developers in the US is expected to rise from 19% to 25%. Meanwhile, Bitcoin mining activity in the US will flourish, with its share of global mining hash rate increasing from 28% in 2024 to 35% by the end of 2025, thanks to cheap energy and potential tax incentives. These trends will collectively solidify the US's leadership position in the global Bitcoin economy.
The share of Bitcoin hashing power among US-listed companies will reach 35%
Corporate Bitcoin holdings: Expected to grow by 43%
In terms of corporate adoption, we expect companies to continue accumulating Bitcoin from retail holders. Currently, there are 68 publicly traded companies holding Bitcoin on their balance sheets, and we expect this number to reach 100 by 2025. Notably, we boldly predict that the total amount of Bitcoin held by private and public companies (currently at 765,000 BTC) will exceed the 1.1 million BTC held by Satoshi Nakamoto within the next year. This means corporate Bitcoin holdings will achieve a significant growth of 43% over the next year.
Ownership of gold and Bitcoin: Growth potential for businesses and governments
3. The value of tokenized securities exceeds $50 billion
On-chain securities growth of 61% in 2024
On-chain securities grew by 61% in 2024
The infrastructure of cryptocurrencies promises to improve the financial system through enhanced efficiency, decentralization, and greater transparency. We believe 2025 will be a year of explosive growth for tokenized securities. Currently, there are about $12 billion worth of tokenized securities on the blockchain, most of which ($9.5 billion) are tokenized private credit securities on Figure's semi-permissioned blockchain Provenance.
In the future, we see tremendous potential for the launch of tokenized securities on public chains. We believe investors have many motivations to push for the complete on-chain issuance of tokenized stocks or debt securities. We predict that entities like DTCC will support the seamless transition of tokenized assets between public blockchains and private closed infrastructures within the next year. This dynamic will facilitate the establishment of AML/KYC (Anti-Money Laundering/Know Your Customer) standards for on-chain investors. As a bold prediction, we expect Coinbase to take unprecedented steps to tokenize its COIN stock and deploy it on its BASE blockchain.
4. The daily settlement volume of stablecoins reaches $300 billion
Monthly stablecoin transfers (in USD) increased by 180% year-on-year in 2024
Source: Artemis XYZ, data as of December 6, 2024.
Past performance is not indicative of future results.
Stablecoins will leap from a niche role in cryptocurrency trading to a core component of global commerce. By the end of 2025, we expect the daily settlement volume of stablecoins to reach $300 billion, equivalent to 5% of the current DTCC trading volume, while the daily settlement volume in November 2024 was approximately $100 billion. With the adoption of major tech companies (like Apple and Google) and payment networks (Visa and Mastercard), stablecoins will redefine payment economics.
Aside from trading purposes, the remittance market will also experience explosive growth. For example, stablecoin transfers between the US and Mexico may grow from $80 million per month to $400 million, a five-fold increase. This is due to its speed, cost savings, and the increasing number of people viewing stablecoins as practical tools rather than experimental technologies. Despite ongoing discussions about blockchain adoption, stablecoins are effectively the "Trojan horse" of blockchain technology.
5. On-chain activity of AI agents exceeds 1 million agents
The total revenue of AI agents reaches $8.7 million within 5 weeks
Source: Dune @jdhpyer, data as of December 6, 2024.
Past performance is not indicative of future results.
We believe AI agents are a highly compelling trend and will gain significant traction in 2025. AI agents are specialized AI robots that help users achieve goals such as "maximizing returns" or "increasing engagement on X/Twitter." These agents optimize outcomes by autonomously adjusting strategies. AI agents are typically trained in a specific domain with input data. Currently, protocols like Virtuals provide tools for anyone to create on-chain AI agents. Virtuals allow non-technical users access to decentralized AI contributors (such as fine-tuning experts, dataset providers, and model developers), enabling ordinary users to create their own agents. This model will lead to a surge of agents, whose creators can rent them out to generate income.
Currently, the construction of agents is mainly focused on the DeFi space, but we believe AI agents will go beyond financial activities. For example, these agents can be used as influencers on social media, virtual players in games, and interactive assistants or partners in consumer applications. Agents like Bixby and Terminal of Truths have already become significant X/Twitter influencers, with 92,000 and 197,000 followers, respectively. Therefore, we expect over 1 million new agents to emerge by 2025.
6. The total locked value (TVL) of Bitcoin's Layer 2 (L2) network reaches 100,000 BTC
TVL of Bitcoin L2 reaches 30,000 BTC, a year-on-year increase of 600% in 2024
Source: Defillama, data as of December 6, 2024.
Past performance is not indicative of future results. The securities mentioned do not constitute a recommendation to buy or sell.
We are closely monitoring the rise of Bitcoin's Layer 2 (L2) blockchains, which have great potential to transform the Bitcoin ecosystem. By expanding Bitcoin's capabilities, these L2 solutions can achieve lower latency and higher transaction throughput, addressing the limitations of the Bitcoin main chain. Furthermore, Bitcoin L2 enhances Bitcoin's capabilities by introducing smart contract functionality, supporting the decentralized finance (DeFi) ecosystem built around Bitcoin.
Currently, Bitcoin can be transferred to smart contract platforms through bridging or wrapping BTC, but these methods rely on third-party systems that are susceptible to hacking and security vulnerabilities. Bitcoin L2 solutions aim to mitigate these risks through a framework that integrates directly with the Bitcoin main chain, thus reducing reliance on centralized intermediaries. Despite liquidity constraints and adoption barriers still existing, Bitcoin L2 is expected to enhance security and decentralization, providing greater confidence to BTC holders to engage more actively in the decentralized ecosystem.
As shown, Bitcoin L2 solutions experienced explosive growth in 2024, with a total locked value (TVL) exceeding 30,000 BTC, a year-on-year increase of 600%, equivalent to approximately $3 billion. Currently, there are over 75 Bitcoin L2 projects in development, but only a few are likely to achieve significant adoption in the long term.
This rapid growth reflects the strong demand from BTC holders for yield generation and broader asset use cases. As chain abstraction technology and Bitcoin L2 mature into products available to end users, Bitcoin will become an integral part of DeFi. For instance, platforms like Ika on Sui or Infinex using chain abstraction technology illustrate how innovative multi-chain solutions enhance Bitcoin's interoperability with other ecosystems.
By supporting secure and efficient on-chain lending, borrowing, and other permissionless DeFi solutions, Bitcoin L2 and abstraction technologies will transform Bitcoin from a passive store of value into an active participant in the decentralized ecosystem. As adoption scales, these technologies will unlock significant potential for on-chain liquidity, cross-chain innovation, and a more integrated financial future.
7. Ethereum Blob space fee revenue reaches $1 billion
Daily generation of Blob space in Ethereum
Source: Dune @hildobby, data as of December 6, 2024.
Past performance is not indicative of future results.
The Ethereum community is actively discussing whether its Layer-2 (L2) networks can bring sufficient value to the Ethereum mainnet through Blob space. Blob space is a key component of Ethereum's scalability roadmap, serving as a dedicated data layer where L2 can submit compressed versions of their transaction history to Ethereum and pay ETH fees per Blob. Although this architecture supports Ethereum's scalability, the current value paid by L2 to the mainnet is relatively low, with a gross margin of about 90%. This raises concerns about the potential over-transfer of economic value from Ethereum to L2, leading to decreased utilization of the mainnet.
Despite the recent slowdown in Blob space growth, we expect its usage to increase significantly by 2025, driven primarily by the following three factors:
Explosive adoption of L2: Ethereum L2 transaction volume is growing at an annualized rate exceeding 300%, with users migrating to low-cost, high-throughput environments for DeFi, gaming, and social applications. As more consumer-facing dApps emerge on L2, more transactions will flow back to Ethereum for final settlement, significantly increasing demand for Blob space.
Advancements in Rollup technology: Improvements in Rollup technology (such as enhanced 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.
Introduction of high-fee use cases: The rise of enterprise-level applications, zk-rollup-based financial solutions, and tokenized real-world assets will drive high-value transactions, prioritizing security and immutability, thus willing to pay Blob space fees.
By the end of 2025, we expect Blob space fees to exceed $1 billion, while currently they are almost negligible. This growth will solidify Ethereum's role as the ultimate settlement layer for decentralized applications and enhance its ability to capture value from the rapidly expanding L2 ecosystem. Blob space will not only extend the network but will also become an important revenue source for Ethereum, balancing the economic relationship between the mainnet and L2.
8. DeFi reaches all-time highs: DEX trading volume hits $4 trillion, TVL reaches $200 billion
Total locked value (TVL) in DeFi
Source: Defillama, data as of December 6, 2024.
Past performance is not indicative of future results.
Despite decentralized exchanges (DEX) setting new records in trading volume both in absolute terms and relative to centralized exchanges (CEX), the total locked value (TVL) of decentralized finance (DeFi) still remains 24% lower than its historical peak. We anticipate that DEX trading volume will exceed $4 trillion in 2025, accounting for 20% of CEX spot trading volume, thanks to the popularity of AI-related tokens and the emergence of new consumer-facing dApps.
Moreover, the influx of tokenized securities and high-value assets will serve as a catalyst for DeFi growth, bringing new liquidity and broader use cases to the ecosystem. Therefore, we expect the total locked value (TVL) of DeFi to rebound to over $200 billion by the end of the year.
This growth reflects not only the recovery of decentralized finance but also marks its rising status in the global financial system. By introducing more user-friendly dApps and innovative financial tools, DeFi will attract new capital inflows, solidifying its position as a viable alternative to traditional finance.
9. NFT market recovery: Trading volume reaches $30 billion
NFT trading volume declined in 2024; we expect a rebound in 2025
Source: Data as of December 6, 2024.
Past performance is not indicative of future results. The securities mentioned do not constitute a recommendation to buy or sell.
The bear market from 2022 to 2023 has severely impacted the NFT sector, with trading volume decreasing by 39% since 2023 and plummeting by 84% compared to 2022. While the prices of fungible tokens began to recover in 2024, the majority of NFTs continued to lag until November, when their prices began to stabilize and activity picked up. Despite these challenges, some projects with strong community ties have thrived by transcending speculative value.
For example, Pudgy Penguins has successfully transformed from a collectible toy brand to a consumer brand, while Miladys has gained cultural influence in the realm of internet satire. Similarly, the Bored Ape Yacht Club (BAYC) continues to evolve as a dominant cultural force, attracting significant attention from brands, celebrities, and mainstream media.
With the recovery of crypto wealth, we expect new affluent users to diversify their investments into NFTs, not just as speculative investments but also as assets with lasting cultural and historical significance. Established collections like CryptoPunks and Bored Ape Yacht Club (BAYC) will benefit from this shift due to their strong cultural influence and relevance. Despite BAYC and CryptoPunks trading volumes still being 90% and 66% lower than their historical peaks (in ETH), other projects like Pudgy Penguins and Miladys have already surpassed their previous highs.
Ethereum continues to dominate the NFT space, hosting most important collections. In 2024, Ethereum accounted for 71% of NFT trading volume, and we expect this percentage to rise to 85% in 2025. This dominance is also reflected in market capitalization rankings, with NFTs on the Ethereum chain occupying all top 10 positions and 16 of the top 20 positions, highlighting Ethereum's central role in the NFT ecosystem.
Although NFT trading volume may not return to the euphoric highs of previous cycles, we believe that an annual trading volume of $30 billion is feasible, approximately 55% of the peak in 2021. The market is shifting from speculative hype to sustainability and cultural relevance.
10. dApp tokens narrow the performance gap with L1 tokens
In 2024, Layer 1 token performance leads major dApp tokens by two times
Source: Market Vectors, data as of December 8, 2024.
Past performance is not indicative of future results. The MVSCLE index tracks smart contract platforms, while the MVIALE index tracks infrastructure application tokens.
A continuing theme of the 2024 bull market is the significant outperformance of Layer-1 (L1) blockchain tokens relative to decentralized application (dApp) tokens. For instance, the MVSCLE index tracking smart contract platforms has risen 80% year-to-date, while the MVIALE index of application tokens has only increased by 35% during the same period.
However, we anticipate this dynamic will change later in 2024, as a wave of new dApps will bring innovative and practical products, creating value for their associated tokens. Among key thematic trends, we see artificial intelligence (AI) as a prominent category in dApp innovation. Additionally, decentralized physical infrastructure network (DePIN) projects also have immense potential to attract investor and user interest, facilitating a broader performance rebalancing between L1 tokens and dApp tokens.
This shift underscores the importance of practicality and product-market fit in determining the success of application tokens in the evolving cryptocurrency landscape.
