Original title: Crypto 2025: What Lies Ahead After 2024's Milestones?
Original author: Vera Lim
Original source: https://www.coingecko.com/
Translation: Daisy, Mars Finance
Cryptocurrency 2025: Future Outlook After 2024 Milestones
As we move into 2025, the cryptocurrency market has undergone significant transformations and developments in 2024. From Bitcoin's strong growth to the rise of altcoins, the entire industry landscape is rapidly evolving. Let’s delve into the key trends of 2024 and the possible directions for 2025.
Key trends for 2024: Bitcoin and altcoins
Price surge triggered by Bitcoin halving
In 2024, the Bitcoin halving event once again became a significant market catalyst, driving BTC prices up an astonishing 146%. This event occurs approximately every four years and reduces the rewards miners receive for verifying transactions by half. This reduction in the supply of new Bitcoins typically triggers significant market volatility due to enhanced scarcity.
Looking back, Bitcoin's price has experienced significant growth after each halving. For example, after the halving in 2016, Bitcoin surged from $650 to $20,000 in just over a year. Similarly, after the 2020 halving, Bitcoin rose from around $8,000 to a peak of $69,000 in 2021.
Approval of Bitcoin and Ethereum ETFs
In 2024, the approval of Bitcoin and Ethereum ETFs became a turning point for the cryptocurrency market, significantly boosting institutional adoption. The long-awaited approvals by the U.S. Securities and Exchange Commission (SEC) finally greenlit spot Bitcoin ETFs, providing traditional investors with a regulated and accessible way to engage with Bitcoin. This approval has led to a substantial influx of institutional capital, and Bitcoin's price surged significantly after the announcement.
Similarly, the approval of the Ethereum ETF has elevated Ethereum's status as a serious investment asset. The SEC's approval of a spot Ethereum ETF has paved the way for traditional financial participants to include ETH in their portfolios, consolidating Ethereum's position as the second-largest cryptocurrency.
Latest data shows that institutional investors currently hold about 20% of the market share in Bitcoin-based ETFs in the U.S.
BlackRock's iShares Bitcoin Trust ETF (IBIT) leads in the total amount of BTC held by institutions, owning over 71,000 Bitcoins, although its institutional adoption rate is relatively low at only 18.38%.
Grayscale's GBTC follows closely, holding 44,707.89 Bitcoins, which represents 20.25% of its shareholders.
Fidelity's FBTC ranks third, holding 44,623.23 Bitcoins, with an institutional holding rate of 24.14%.
ARK 21Shares' ARKB performs best in institutional adoption, with asset management companies holding 32.8% of its shares, equivalent to 17,166 Bitcoins. On the other end, Grayscale's Bitcoin Mini Trust has the lowest institutional participation rate at only 1.52%. CoinShares Valkyrie ETF (BRRRR) has the least institutional holdings, with only 451.26 Bitcoins.
Leaked information shows that the world's largest asset management company, BlackRock, is negotiating to acquire shares in a Bitcoin spot ETF held by a 'big player'.
The precedents set by these ETF approvals pave the way for applications from other cryptocurrencies. Currently, the SEC is reviewing over 10 ETF applications covering assets including Solana (SOL) and XRP. This indicates that institutional interest in a wider range of digital assets may expand, and these developments are expected to drive further adoption and price growth across the cryptocurrency market.
Trump wins the presidential election
Donald Trump's victory in 2024 has proven to be a game-changing event for the cryptocurrency market. Trump's supportive stance on cryptocurrencies and his public discussions about using Bitcoin as a tool to repay U.S. debt have significantly boosted market confidence. This bold vision aligns with his broader pro-business and deregulatory policy agenda, filling traders and institutional investors with optimism.
After winning the election, Bitcoin's price surpassed the milestone of $100,000. Investors expect the Trump administration to adopt pro-cryptocurrency policies, further driving adoption and fostering innovation in the blockchain space. His victory has also sparked discussions about the potential integration of cryptocurrencies into a broader economic framework, creating a favorable development environment for digital assets.
Key events to watch in 2025
Bitcoin as a global economic policy tool
One of the most striking developments is the discussion around using Bitcoin as a tool for the U.S. to repay its debt. This bold idea was initially proposed during Trump's campaign and is gradually gaining attention, attracting global focus. Trump has also expressed support for the proposal to establish a strategic Bitcoin reserve, similar to the current gold reserves held by the Federal Reserve. This reserve could serve as an alternative asset to address sovereign debt challenges, showcasing Bitcoin's potential as a legitimate reserve asset.
The U.S. sovereign debt crisis, driven by historically high borrowing levels and ongoing fiscal imbalances, has prompted policymakers to explore unconventional solutions. Proponents argue that holding Bitcoin as a reserve could hedge against inflation, diversify national financial instruments, and enable debt repayment without devaluing the dollar.
At the national level, following El Salvador's lead, countries like Tonga, Paraguay, and Panama are also considering adopting Bitcoin as legal tender. Motivated by economic opportunities, financial inclusion, and remittance efficiency, these countries hope to leverage the potential of cryptocurrencies to modernize their financial systems and attract global investment.
Furthermore, Binance founder Zhao Changpeng stated that it is inevitable for China to establish a strategic Bitcoin reserve. He pointed out that despite China's fluctuating stance on cryptocurrency policy, its decision-making ability in this field remains swift and decisive. Zhao emphasized that if other countries begin to establish Bitcoin reserves, China may follow suit to maintain its position in global financial competition.
Major companies like Amazon and Microsoft have also received proposals from shareholders to convert part of their company reserves into Bitcoin. Although Microsoft shareholders voted against the proposal to include Bitcoin on the balance sheet based on the board’s recommendation, the discussions indicate that large corporations are shifting towards potential use cases for Bitcoin, paving the way for broader adoption in the future.
Approval of other cryptocurrency ETFs
Following the success of Bitcoin and Ethereum ETFs, 2025 may become a turning point for other cryptocurrency ETFs, including Solana (SOL) and XRP. Although the SEC previously rejected the Solana ETF application, it is currently reviewing over 10 related documents, indicating that interest in expanding crypto investment options remains strong.
This ongoing scrutiny has created an optimistic space, as the maturity of the market and clearer regulations may lead to the approval of these ETFs, thereby enhancing market liquidity and boosting investor confidence.
Widespread adoption of real-world assets (RWA)
In 2025, the trend of tokenizing **real-world assets (RWA)** is expected to accelerate further, fundamentally changing the interaction between traditional finance and blockchain technology. Assets such as real estate, commodities, and even artwork are gradually being converted into blockchain-based tokens, achieving fractional ownership and broader accessibility.
According to CoinGecko, tokenization could unlock trillions of dollars of previously illiquid assets, enabling them to be traded within the crypto ecosystem. This shift bridges the gap between traditional finance and digital finance, providing investors with new diversification options and driving innovation across various industries.
End of the mining halving cycle
Historically, Bitcoin cycles after halving often lead to prolonged price increases lasting about a year (approximately 365 days). This trend suggests that the first quarter of 2025 will be impacted by the residual effects of the 2024 halving event, driving optimism and pushing prices higher. Halving events reduce miners' rewards, resulting in supply tightening and increased demand, creating a favorable environment for Bitcoin's growth. This effect is expected to last until at least April 2025, providing ample opportunities for investors and traders.
Predictions for 2025: What will happen in the crypto market?
Bitcoin outlook
Driven by momentum in 2024 and key events approaching in 2025, Bitcoin's growth trajectory looks very promising. By analyzing the logarithmic chart of Bitcoin on a monthly basis, it can be observed that it is operating within an upward channel. Currently, Bitcoin is approaching a critical pivot point within this channel, similar to past bull market cycles.
Optimistic forecasts suggest that Bitcoin could reach the upper limit of the rising channel, reflecting a potential value increase of 154%. This scenario aligns with historical trends following halving, suggesting that Bitcoin could reach $250,000, further solidifying its leading position in the crypto market.
Predictions for total cryptocurrency market capitalization
The total market capitalization of cryptocurrencies shows strong bullish momentum and is operating within a rising wedge pattern. Historical bull market rebounds typically target the upper boundary of this structure. Currently, estimates from the rebound off the downward trend line suggest the upper boundary is $3.4 trillion, representing a potential growth of 270%.
Predictions for total cryptocurrency market capitalization excluding the top 10 by market value
At the same time, the total market capitalization excluding the top 10 cryptocurrencies has formed a classic 'cup and handle' pattern. It is currently testing a resistance level of $370 billion. Breaking through this critical level could trigger a 317% rebound, targeting $1.6 trillion, marking the beginning of a strong altcoin season.
Conclusion
The cryptocurrency market is expected to see significant growth in 2025, driven by milestone events in 2024 such as the Bitcoin halving rebound, ETF approvals, and Trump's support for crypto policies. With the potential integration of Bitcoin's economic framework, widespread adoption of altcoins, and tokenization of real-world assets, the market is poised for innovation and expansion. Despite regulatory challenges, the outlook remains optimistic, with Bitcoin expected to reach new highs as the entire crypto ecosystem reshapes the traditional financial system.
