Written by: Nina Bambysheva, Forbes
Compiled by: Luffy, Foresight News
Cryptocurrency winter? It's over. The decline of the crypto empire and courtroom dramas? All in the past. Survivors? Battle-tested, with eyes keen as if it were 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, U.S. Bitcoin ETFs held assets worth $129 billion, surpassing the $125 billion held by gold ETFs.
The market excitement following the U.S. elections, combined with Donald Trump’s promise to make the U.S. the "world's cryptocurrency capital" and establish a strategic Bitcoin reserve, caused 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 U.S. presidential elections) and the battle royale game Off The Grid have found 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, general partner at San Francisco-based cryptocurrency venture firm Dragonfly, stated, "This year, cryptocurrency has entered the mainstream consciousness in a way unprecedented since 2021; now it is a sustainable long-term asset class that will have a voice and play a crucial role." He added, "If you just look at the impact of cryptocurrencies on elections, whether it's crypto political donations or promoting it among legislators and presidential candidates, this is unprecedented and a significant step towards the legitimization of cryptocurrency."
Donald Trump attends the 2024 Bitcoin conference in Nashville, Tennessee. Photo source: (The Washington Post)
With Trump and a cadre of pro-crypto officials ready to take office, the "golden age of cryptocurrency," as industry insiders call it, has arrived. Here are the trends brewing:
All-time highs and U.S. Bitcoin reserves
The art of bold price predictions 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.
At the Nashville Bitcoin conference in July, Trump proposed using 200,000 Bitcoins (worth $21 billion) seized from criminals to kickstart the reserve. However, the legal route remains unclear—whether Congressional approval is needed, or if the executive branch can act unilaterally. Pro-crypto Senator Cynthia Lummis proposed a reserve scheme operated by the Treasury in July. Skeptics argue that Bitcoin's volatility could undermine financial stability. Trump's silence on whether the U.S. would purchase more Bitcoin in the open market adds another layer of uncertainty.
Cryptocurrency regulatory reset: Friendly Washington
The new administration is expected to be the friendliest to cryptocurrency to date. Some significant 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, who was known for lawsuits and enforcement actions against crypto firms during his tenure.
Commodity Futures Trading Commission (CFTC): Brian Quintenz, policy director at Andreessen Horowitz and former CFTC commissioner, is a leading candidate to lead the agency.
Treasury Department: 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 main custodian of Tether's USDT reserves), will lead the department.
Artificial Intelligence and Cryptocurrency Tsar: David Sacks, a long-time venture capitalist who previously worked with Elon Musk at PayPal, will oversee policies in two key areas of Trump's strategy to enhance national competitiveness.
House Financial Services Committee: Arkansas Republican Congressman French Hill, along with outgoing committee chairman Patrick McHenry, advocates for cryptocurrency-friendly legislation, planning to prioritize a cryptocurrency market structure bill within the first 100 days and investigate the so-called "Choke Point 2.0" action that many believe unfairly targets the crypto industry through de-banking practices.
"This is a real opportunity to set 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 think we will see a collaborative effort from various government departments pushing for market structure and stablecoins, as well as a significant shift that brings a lot of innovation back to the U.S.," she added.
New crypto IPOs and venture capital inflows
The process of cryptocurrency IPOs is heating up. Bitwise has listed five companies that may go public next year:
Circle: The issuer of the second-largest stablecoin, USDC, secretly applied for an IPO in January this year.
Figure: The company is known for blockchain-based financial services, such as mortgages, personal loans, and asset tokenization, and has been exploring going public 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 stated, "I expect the LP (limited partners of crypto venture capital firms) market to improve, and they will want to invest more money into cryptocurrencies. Many traditional Web2 crossover funds will return to the Web3 space. We have already seen this trend in certain areas, such as stablecoins and payments." He added that venture capital deals tend to lag behind public market price increases by a quarter or two.
Crypto-related companies included in major stock indices
MicroStrategy's stock price has risen over 400% this year. With new accounting rules allowing companies to reflect their Bitcoin investments at market value in financial statements, the company has now become a constituent of the Nasdaq 100 index, and analysts predict it will next be included in the S&P 500 index. This change could allow MicroStrategy to enter index-tracking funds, thus joining the investment portfolios of countless U.S. investors. 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 of the S&P 500. Analysts say Coinbase, which has risen 70% this year, may also join this coveted index.
Surge in stablecoins
With the U.S. poised to introduce much-anticipated stablecoin legislation, the stablecoin industry is expected to experience explosive growth, with a market capitalization potentially doubling to $400 billion. According to Bitwise data, stablecoin trading volume is projected to reach $8.3 trillion in 2024, nearly equivalent to Visa's $9.9 trillion payment volume.
Tether and Circle still dominate. However, Hadick warns that their growth may soon stagnate if they continue to operate like asset management companies instead of payment companies.
In October, Stripe spent $1.1 billion to acquire the stablecoin platform Bridge, sending a message that stablecoins may become the cornerstone of fintech. Stripe calls it "the superconductor of financial services," boasting its unparalleled speed, low cost, and global impact. Robinhood is also 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, "Many new stablecoin models are returning income to token holders or applications that actually attract users. I believe these models are disruptive."
Acceleration of traditional asset tokenization
Larry Fink, CEO of BlackRock, has been promoting tokenization for years. From real estate to art, everything could soon be tokenized. The biggest benefits of tokenization are: instant settlement, lower costs than traditional securitization, round-the-clock 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 figure has approached $14 billion. Venture capital firm ParaFi predicts that by 2030, the market size for tokenized RWAs could soar to $2 trillion, signaling a significant shift in asset ownership and trading.
New applications, better infrastructure
The buzzword for the end of 2024 is AI agents. Get ready to witness the fusion of artificial intelligence and cryptocurrency, a blend 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 through social media on X. Its success stems from promoting a token based on early 2000s absurd memes (the anonymous creator of the token transferred a large sum of money to TruthTerminal's wallet, which is managed by Andy Ayrey).
But analysts are taking a cautious stance. The number of practical AI agents (such as those attempting to execute complex transactions across blockchains on behalf of users) is scarce and still in the early stages. "The excitement around agents comes from their novelty," said 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 yet gone mainstream, the work to build strong infrastructure continues. Ceteris explains, "Solana established the trend for high-throughput blockchain eras, and nearly every new chain is launched under this trend, so a large amount of cheap block space will be created."
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. This time, however, the stakes seem higher than ever.
