Written by: CoinGecko
Translation: Plain Language Blockchain
As we move into 2025, reflecting on 2024, the cryptocurrency market underwent significant transformations and developments. The robust growth of Bitcoin and the rise of altcoins have rapidly evolved the entire industry. Let's delve into the major trends of 2024 and look forward to the market dynamics of 2025.
1) Key Trends for 2024: Bitcoin and Altcoins
1) Bull Market Triggered by Bitcoin Halving
In 2024, the Bitcoin halving event once again became a catalyst for the bull market, with Bitcoin's price soaring by 146%, showcasing impressive performance. The halving event occurs approximately every four years, reducing the rewards miners receive for validating transactions. This scarcity, due to the reduced supply of new Bitcoin, often triggers significant market volatility.
Historically, Bitcoin's price typically experiences significant growth after each halving. For instance, after the 2016 halving, Bitcoin's price soared 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.
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 spot Bitcoin ETFs by the SEC finally became a reality, allowing traditional investors to access Bitcoin within a regulated and convenient framework. This approval brought a surge of institutional capital, with Bitcoin prices significantly rising after the news was announced.
Similarly, the approval of Ethereum ETFs has elevated Ethereum's status as a significant investment asset. With the SEC approving spot Ethereum ETFs, traditional financial institutions are able to 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 trading platform ETFs traded in the U.S. Although the institutional adoption rate of BlackRock's iShares Bitcoin Trust ETF (IBIT) is below average at just 18.38%, it leads in total Bitcoin holdings, exceeding 71,000 BTC. Grayscale's GBTC follows closely with 44,707.89 BTC held by institutions, accounting for 20.25% of its shareholders, while Fidelity's FBTC ranks third with institutions holding 44,623.23 BTC at a 24.14% ownership rate.
ARK 21Shares' ARKB has performed most prominently in terms of institutional adoption, with 32.8% of its shares held by asset managers, equivalent to 17,166 BTC. In contrast, Grayscale's Bitcoin Mini Trust has the lowest institutional participation rate at just 1.52%, while CoinShares Valkyrie ETF (BRRRR) ranks lowest in terms of institutional Bitcoin holdings, with only 451.26 BTC.
Leaked information shows that the world's largest asset management firm, BlackRock, is negotiating to acquire a stake in the Bitcoin spot ETF 'King.'
These approvals open 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, signaling a growing institutional interest in broader digital assets. These developments may further drive the adoption and price momentum across the cryptocurrency market.
3) Trump Wins Presidential Election
Donald Trump's victory in 2024 proved to be a game changer for the cryptocurrency market. His supportive stance on cryptocurrencies and public discussions about using Bitcoin as a potential tool for repaying U.S. debt greatly boosted market confidence. This bold vision aligns with his broader policy agenda supporting business and deregulation, sparking optimism among traders and institutional investors.
After the election victory, Bitcoin broke the $100,000 mark. Investors expect the Trump administration to adopt crypto-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 flourishing of digital assets.
2) Key Events to Watch in 2025
1) Bitcoin as a Global Economic Policy Tool
One of the most striking developments is the discussion about using Bitcoin as a tool for repaying U.S. debt. This bold idea was first raised during Trump's campaign and gradually gained support, drawing global attention. Trump has also expressed support for the idea of creating 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 persistent fiscal imbalance, has prompted policymakers to explore unconventional solutions. Supporters argue that holding Bitcoin as a reserve can hedge against inflation and diversify the country's financial toolbox, allowing for debt repayment without devaluing the dollar.
At the national level, following El Salvador's groundbreaking move, countries like Tonga, Paraguay, and Panama are considering adopting Bitcoin as legal tender. Driven by factors such as economic opportunity, financial inclusion, and remittance efficiency, these countries hope to leverage the potential of cryptocurrencies to modernize their financial systems and attract global investment.
Additionally, Binance founder Changpeng Zhao stated that China's creation of a strategic Bitcoin reserve 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 begin to establish 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 shareholders voted against including Bitcoin in the balance sheet based on the board's recommendation, their participation in related discussions marks a shift among large corporations exploring potential use cases for Bitcoin, 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 application for a Solana ETF, it is still reviewing over 10 applications, indicating continued 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) Widespread Adoption of Real-World Assets (RWA)
By 2025, the trend of tokenizing real-world assets (RWA) is expected to accelerate, fundamentally transforming the interaction between traditional finance and blockchain technology. Real estate, commodities, and even art are being converted into blockchain-based tokens, enabling fragmented ownership and broader accessibility.
According to CoinGecko data, tokenization has the potential to unlock trillions of dollars in previously illiquid assets, enabling these assets to be traded within the crypto ecosystem. This shift bridges traditional finance and digital finance, providing investors with new diversification channels while driving innovation across various sectors.
4) End of the halving cycle
Historically, the cycles following Bitcoin halving typically lead to prolonged price increases, often lasting up to a year (approximately 365 days). This trend indicates that the first quarter of 2025 will be dominated by the residual effects of the 2024 halving event, driving market optimism and pushing prices higher. The halving reduces miners' rewards, creating supply constraints and increased demand, thereby creating a favorable environment for Bitcoin's growth. This effect is expected to last until April 2025, providing ample opportunity for investors and traders.
3) 2025 Forecast: The Outlook for the Crypto Market
1) Bitcoin Predictions
Building on the strong momentum of 2024 and the anticipated key events of 2025, Bitcoin's growth trajectory looks very promising. A logarithmic analysis of Bitcoin's monthly charts shows it moving steadily within an upward channel. Currently, Bitcoin is approaching a key axis point within that channel, similar to past bull market cycles.
Optimistic predictions suggest that Bitcoin could reach the upper boundary of this channel, reflecting a potential increase in value of 154%. This trend aligns with historical post-halving movements, in which case Bitcoin's price could reach $250,000, further solidifying its position as the leader in the crypto market.
2) Total Cryptocurrency Market Capitalization Forecast
The total cryptocurrency market capitalization shows strong bullish 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 expected to be $3.4 trillion, representing a potential growth of 270%.
3) Market Capitalization Forecast Excluding the Top Ten Cryptocurrencies
Meanwhile, 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 the resistance level of $370 billion. If this key level is broken, 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 experience significant growth in 2025, thanks to key milestones in 2024, such as the Bitcoin halving rebound, ETF approvals, and Trump's supportive policies for crypto. As Bitcoin potentially integrates into the economic framework, the adoption of altcoins increases, and real-world assets are tokenized, the market is at the forefront of innovation and expansion. Despite regulatory challenges, the outlook remains optimistic, with Bitcoin expected to reach new highs and the crypto ecosystem reshaping traditional finance.
