Original title: (7 Reasons Why 2025 Could Redefine Crypto)
By Nina Bambysheva, Forbes
Compiled by: Luffy, Foresight News
Crypto winter? It’s over. Crypto empires falling and court drama? They’re a thing of the past. The survivors? Battle-tested and savvy, as if this is a new gold rush.
After years of conflict with the U.S. Securities and Exchange Commission (SEC), Bitcoin and Ethereum exchange-traded funds (ETFs) have finally arrived. According to cryptocurrency research firm K33 Research, as of December 16, the assets held by U.S. Bitcoin ETFs reached $129 billion, surpassing the $125 billion of gold ETFs.
Market excitement after the U.S. elections, coupled with Donald Trump's promise to make America the 'crypto capital of the world' and establish a strategic Bitcoin reserve, led Bitcoin prices to briefly surpass $100,000.
Solana is seizing development opportunities, thanks to the hype around memecoins and the rise of new narratives like DePIN. DePIN is a network that uses blockchain technology to decentralize control and ownership of physical infrastructure. Platforms like Polymarket (where users can bet on the outcome of the U.S. presidential election) and the battle royale game Off The Grid have seen success in the mainstream market. A new wave of 'degens' is betting on tokens like fartcoin and dogwifhat, both of which currently have market capitalizations exceeding $1 billion.
Rob Hadick, a general partner at San Francisco-based cryptocurrency venture capital firm Dragonfly, says, 'This year, cryptocurrency has entered mainstream consciousness in a way not seen since 2021; now it is a sustainable long-term asset class that will have a voice and play a significant role.' 'If you look only at the impact of cryptocurrency on elections, whether through crypto political donations or its promotion among legislators and presidential candidates, this is unprecedented and a significant step toward the legalization of cryptocurrency.'
Donald Trump attended the 2024 Bitcoin conference in Nashville, Tennessee. Photo source: (The Washington Post)
With Trump and a group of cryptocurrency-supporting officials preparing to take office, what industry insiders are calling the 'golden age of cryptocurrency' has arrived. Here are the trends in the works:
Historical highs and Bitcoin reserves in the U.S.
The art of boldly predicting prices is back in vogue. Cryptocurrency asset management firm Bitwise predicts that if the U.S. establishes a strategic reserve similar to oil or gold, Bitcoin's price could reach $200,000 or even $500,000. The logic is that an official U.S. Bitcoin reserve would trigger global FOMO.
Trump proposed using 200,000 Bitcoins (worth $21 billion) seized from criminals to fund a reserve at the Bitcoin conference in Nashville in July. However, the legal pathway remains unclear, whether Congressional approval is needed or if the executive branch can act unilaterally. Supportive Senator Cynthia Lummis proposed a treasury-operated reserve scheme in July. Skeptics argue that Bitcoin's volatility could threaten financial stability. Trump has remained silent on whether the U.S. will purchase more Bitcoins from the open market, adding another layer of uncertainty.
Cryptocurrency regulatory reset: a friendly Washington.
The new government is expected to be the most crypto-friendly government to date. Some important government appointments regarding cryptocurrency include:
U.S. Securities and Exchange Commission (SEC): Former SEC commissioner and cryptocurrency supporter Paul Atkins is set to replace cryptocurrency adversary Gary Gensler, known for his lawsuits and enforcement actions against crypto businesses during his tenure.
Commodity Futures Trading Commission (CFTC): Brian Quintenz, policy director at Andreessen Horowitz and former CFTC commissioner, is a leading candidate to head the agency.
Department of Treasury: Hedge fund billionaire and Bitcoin advocate Scott Bessent is Trump's pick for Treasury Secretary.
Department of Commerce: Howard Lutnik, CEO of Cantor Fitzgerald (the primary custodian of Tether's USDT reserves), will lead this department.
Artificial Intelligence and Cryptocurrency Czar: David Sacks, a long-time venture capitalist who previously worked with Elon Musk at PayPal, will oversee policy in two key areas of Trump's strategy to enhance national competitiveness.
House Financial Services Committee: Arkansas Republican Congressman French Hill, alongside outgoing committee chairman Patrick McHenry, advocates for crypto-friendly legislation, planning to prioritize a crypto market structure bill within the first 100 days and investigate the so-called 'Choke Point 2.0' actions, which many believe unfairly target the crypto industry through de-banking practices.
'This is a real opportunity to develop good policies for the industry,' said Kristin Smith, CEO of the Blockchain Association based in Washington, D.C., which represents over 100 cryptocurrency companies. 'The White House has indicated this is a priority. I believe we will see collaborative efforts across government agencies, legislative pushes for market structure and stablecoins, and a significant shift in innovation returning to the U.S.,' she added.
New crypto IPOs and venture capital entering.
The process for cryptocurrency IPOs is heating up. Bitwise lists five companies that could go public next year:
Circle: The issuer of the second-largest stablecoin USDC secretly filed for an IPO this January.
Figure: The company is known for blockchain-based financial services such as mortgages, personal loans, and asset tokenization, and has been exploring an IPO since last year.
Kraken: The IPO plans of this U.S.-based cryptocurrency exchange date back to 2021.
Anchorage Digital: Its status as a federally chartered bank may pave the way for its IPO.
Chainalysis: A leader in blockchain compliance and intelligence services, is expected to go public.
Additionally, Dragonfly's Hadick states, 'I expect the LP (limited partners of crypto venture capital firms) market to improve, and they will want to put more money into cryptocurrency. Many traditional Web2 crossover funds will return to the Web3 space. We have already seen this trend in certain areas, like stablecoins and payments.' He added that venture capital deals often lag behind public market price increases by a quarter or two.
Crypto-related businesses are being included in major stock indices.
MicroStrategy's stock price has risen over 400% this year. As new accounting rules allow companies to reflect their Bitcoin investments at market value in financial statements, the company has now become a component of the Nasdaq 100 index, with analysts predicting that it will next be included in the S&P 500 index. This change could allow MicroStrategy to enter index-tracking funds, thus joining the portfolios of countless U.S. investors. MicroStrategy co-founder and executive chairman Michael Saylor's 'Bitcoin treasury' strategy (selling bonds and stocks to accumulate Bitcoin) has pushed its $86 billion enterprise into the top 100 companies in the S&P 500. Analysts also suggest that Coinbase, which has risen 70% this year, may join this coveted index.
Surge in stablecoins
With the U.S. set to unveil highly anticipated stablecoin legislation, the stablecoin industry is expected to experience explosive growth, with market capitalization potentially doubling to $400 billion. According to Bitwise, stablecoin transaction volume could reach $8.3 trillion in 2024, nearly matching Visa's $9.9 trillion payment volume.
Tether and Circle still dominate. However, Hadick warns that their growth could quickly stall if they continue to operate as asset management companies rather than payment companies.
Stripe spent $1.1 billion in October to acquire stablecoin platform Bridge, sending a message that stablecoins could become the cornerstone of fintech. Stripe calls it the 'superconductor of financial services,' boasting its unparalleled speed, low cost, and global reach. Robinhood is also following suit, exploring the creation of a global stablecoin network.
Meanwhile, the next generation of 'Stablecoin 2.0' models is quietly emerging. Ceteris, research director at New York cryptocurrency analytics firm Delphi Digital, explains: 'There are many new stablecoin models that are providing income back to token holders or applications that actually attract users. I believe these models are disruptive.'
Acceleration of traditional asset tokenization.
BlackRock CEO Larry Fink has been promoting tokenization for years. Everything from real estate to art could soon be tokenized. The biggest benefits of tokenization are: instant settlement, lower costs than traditional securitization, 24/7 liquidity, and transparency.
Three years ago, the cryptocurrency industry had only tokenized $2 billion of real-world assets (RWA), including private credit, U.S. debt, commodities, and stocks. Today, that number is nearly $14 billion. Venture capital firm ParaFi predicts that by 2030, the market size for tokenized RWA could soar to $2 trillion, signaling a significant shift in asset ownership and trading.
New applications, better infrastructure.
The buzzword at the end of 2024 is AI agents. Get ready to witness the fusion of artificial intelligence and cryptocurrency, a combination that feels closer to science fiction.
This trend has already begun to emerge. Take TruthTerminal as an example; this AI agent not only received $50,000 from Marc Andreessen but also became a millionaire using social media platform X. Its success stems from promoting a token based on an absurd meme from the early 2000s (the token's anonymous creator transferred a large sum into TruthTerminal's wallet, which is managed by Andy Ayrey).
However, analysts are cautious. There are still few practical AI agents (those attempting to represent users in executing complex transactions across blockchains) and they are in the early stages. 'The excitement around agents is because they are very novel,' says Delphi's Ceteris, 'but whether good or bad, it could be the biggest bubble of this cycle.'
Although the blockchain industry remains fragmented and most decentralized applications have not become mainstream, work continues to build robust infrastructure. Ceteris explains: 'Solana has set the trend for a high-throughput blockchain era, and almost every new chain is launched under this trend, resulting in a large amount of cheap block space.'
Thus, the narrative theme of cryptocurrency has shifted from survival to prosperity. This is just part of what may bring surprises next year. You can choose to prepare popcorn for the show or pull out your wallet for this opportunity. Caution is essential, as the market will experience highs and lows. And this time, the stakes seem higher than ever.
