Written by: CoinGecko
Translated by: Blockchain in Plain Language
As we move into 2025, reflecting on 2024, the cryptocurrency market has undergone significant transformations and developments. Bitcoin's strong growth and the rise of altcoins have rapidly evolved the entire industry. Let’s delve into the key trends of 2024 and look ahead to the market dynamics of 2025.
1) Key trends in 2024: Bitcoin and altcoins
1) Bull market triggered by Bitcoin halving
In 2024, the Bitcoin halving event once again became a catalyst for a bull market, with Bitcoin's price soaring by 146% and showing impressive performance. The halving event occurs approximately every four years, reducing the rewards for miners validating transactions on the platform by half. This scarcity, due to the reduced supply of newly minted Bitcoin, often triggers significant market volatility.
Historically, Bitcoin's price has typically experienced significant growth following each halving. For instance, after the halving in 2016, Bitcoin's price soared from $650 to $20,000 in just over a year. Similarly, following the 2020 halving, Bitcoin rose from around $8,000 to a peak of $69,000 in 2021.
2) Approval of Bitcoin and Ethereum ETFs
In 2024, the approval of Bitcoin ETFs and Ethereum ETFs became a milestone event for the cryptocurrency market, significantly boosting institutional participation. The long-awaited approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) finally became a reality, enabling traditional investors to access Bitcoin within a regulated and convenient framework. This approval led to a surge of institutional capital, and Bitcoin's price rose significantly following the announcement.
Similarly, the approval of Ethereum ETFs has elevated Ethereum's status as a significant investment asset. With the SEC approving a spot Ethereum ETF, traditional financial institutions can incorporate ETH into their portfolios, further solidifying Ethereum's market position as the second-largest cryptocurrency globally.
Recent data shows that institutional investors currently hold about 20% of all Bitcoin exchange-traded funds (ETFs) traded on platforms in the U.S. Although BlackRock's iShares Bitcoin Trust ETF (IBIT) has an institutional adoption rate below average at just 18.38%, its total Bitcoin holdings lead the pack, exceeding 71,000 BTC. Grayscale's GBTC follows closely, with institutional holdings of 44,707.89 BTC, accounting for 20.25% of its shareholders; while Fidelity's FBTC ranks third, with institutions holding 44,623.23 BTC, representing an institutional ownership ratio of 24.14%.
ARK 21Shares' ARKB stands out with the highest institutional adoption rate, with 32.8% of shares held by asset managers, equating to 17,166 BTC. In contrast, Grayscale's Bitcoin Mini Trust has the lowest institutional participation rate at just 1.52%; CoinShares Valkyrie ETF (BRRRR) ranks lowest in terms of institutional Bitcoin holdings, with only 451.26 BTC.
Leaked reports indicate that the world's largest asset management firm, BlackRock, is negotiating to acquire shares of the Bitcoin spot ETF 'King'.
These approvals have opened the door for future ETF applications for other cryptocurrencies. Currently, the SEC is reviewing over 10 ETF applications, including assets like Solana (SOL) and XRP, indicating that institutional interest in a broader range of digital assets is likely to expand further. These developments could drive further adoption and price momentum across the entire cryptocurrency market.
3) Trump wins the presidential election
Donald Trump’s victory in 2024 proved to be a game changer for the cryptocurrency market. Trump's pro-crypto stance and open discussions about using Bitcoin as a potential tool for repaying U.S. debt significantly boosted market confidence. This bold vision aligns with his broader policy agenda supporting business and deregulation, inspiring optimism among traders and institutional investors.
After the election victory, Bitcoin broke the $100,000 barrier. Investors expect the Trump administration to adopt cryptocurrency-friendly policies, driving further adoption and fostering innovation in the blockchain space. His victory also sparked discussions about integrating cryptocurrencies into a broader economic framework, creating a favorable environment for the booming digital asset market.
2. Key events to watch in 2025
1) Bitcoin as a global economic policy tool
One of the most notable developments is the discussion around using Bitcoin as a tool for repaying U.S. debt. This bold idea was first proposed during Trump's campaign and has gradually gained support, attracting global attention. Trump has also expressed support for the proposal to create a 'strategic Bitcoin reserve' similar to the Federal Reserve's current gold reserves. 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 record-high borrowing and ongoing fiscal imbalance, has prompted policymakers to explore unconventional solutions. Proponents argue that holding Bitcoin as a reserve can hedge against inflation and diversify the national financial toolbox, allowing for debt repayment without devaluing the dollar.
At the national level, following El Salvador's groundbreaking initiative, countries such as Tonga, Paraguay, and Panama are considering adopting Bitcoin as legal tender. Driven by factors like economic opportunities, financial inclusion, and remittance efficiency, these nations hope to harness the potential of cryptocurrencies to modernize their financial systems and attract global investment.
Furthermore, Binance founder Changpeng Zhao stated that the creation of a strategic Bitcoin reserve in China is inevitable. He pointed out that while China's cryptocurrency policy is unpredictable, the country can make swift decisions in this area. Zhao emphasized that if other countries start building Bitcoin reserves, China may follow suit to maintain its leading position in global financial competition.
Large companies like Amazon and Microsoft are also receiving inquiries from shareholders about investing a portion of their company reserves in Bitcoin. Although Microsoft's shareholders voted against including Bitcoin on the balance sheet based on the board's recommendation, their involvement in related discussions marks a shift for large companies exploring potential Bitcoin use cases, laying the groundwork for broader adoption in the coming years.
2) Approval of other cryptocurrency ETFs
Building on the success of Bitcoin and Ethereum ETFs, 2025 could be a turning point for other cryptocurrency ETFs, including Solana (SOL) and XRP. Although the SEC previously rejected the Solana ETF application, it is still reviewing over 10 applications, indicating sustained interest in expanding crypto-based investment options.
This ongoing review leaves room for optimism, as market maturation and regulatory clarity may pave the way for approvals, thereby enhancing market liquidity and investor confidence.
3) The widespread adoption of Real World Assets (RWA)
It is expected that by 2025, the trend of tokenizing real-world assets (RWA) will accelerate, fundamentally changing the interaction between traditional finance and blockchain technology. Real estate, commodities, and even artworks are being transformed into blockchain-based tokens, enabling fractional ownership and broader accessibility.
According to CoinGecko data, tokenization has the potential to unlock trillions of previously illiquid assets, allowing these assets to trade within the crypto ecosystem. This shift bridges traditional finance and digital finance, providing investors with new diversification avenues while driving innovation across various industries.
4) The end of the halving cycle
Historically, the cycles following Bitcoin halvings tend to lead to prolonged price increases, often lasting up to a year (around 365 days). This trend suggests that the first quarter of 2025 will be dominated by the residual effects of the 2024 halving event, driving market optimism and pushing prices upward. The halving decreases miners' rewards, resulting in supply tightness and increased demand, creating a favorable environment for Bitcoin's growth. This effect is expected to last until April 2025, providing ample opportunities for investors and traders.
3. Predictions for 2025: The outlook for the crypto market
1) Bitcoin predictions
Based on the strong momentum of 2024 and anticipated key events in 2025, Bitcoin's growth trajectory looks very promising. A logarithmic analysis of Bitcoin's monthly chart reveals that Bitcoin is steadily moving within an upward channel. Currently, Bitcoin is approaching a critical axis point within that channel, similar to previous bull market cycles.
Optimistic forecasts suggest that Bitcoin could potentially reach the upper boundary of this channel, reflecting a possible value increase of 154%. This trend aligns with historical post-halving price movements, where Bitcoin's price could reach $250,000, further cementing its position as a leader in the crypto market.
2) Total cryptocurrency market capitalization predictions
The total cryptocurrency market capitalization shows strong bull market momentum and is in an ascending wedge pattern. Historically, rebounds in bull market cycles typically target the upper boundary of this structure. With the current rebound from the lower trend line, the upper boundary is projected to be $3.4 trillion, representing a potential growth of 270%.
3) Market capitalization predictions excluding the top ten cryptocurrencies
At the same time, the total market capitalization excluding the top ten cryptocurrencies has formed a classic 'cup and handle' pattern on the monthly chart. The market is currently testing a resistance level of $370 billion. If this key level is breached, it could trigger a 317% increase, with a potential target of $1.6 trillion, marking the beginning of a strong altcoin season.
4. Conclusion
The cryptocurrency market is expected to see significant growth in 2025, driven by important milestones in 2024, such as Bitcoin's halving rebound, ETF approvals, and Trump’s pro-crypto policies. As Bitcoin potentially integrates into the economic framework, altcoin adoption increases, and the tokenization of real-world assets takes shape, the market is at the forefront of innovation and expansion. Despite regulatory challenges, the outlook remains optimistic, with Bitcoin poised to set new highs and the crypto ecosystem reshaping traditional finance.
