Author: Zoltan Vardai
Compiled by: Bai Shui, Golden Financial
With increasing regulatory clarity and surging cryptocurrency valuations, the global cryptocurrency industry is expected to gain mainstream and institutional recognition again in 2025.
In 2024, Bitcoin reached an all-time high of $108,300 on December 17, more than a month after Donald Trump won the U.S. presidential election, as investor optimism in cryptocurrencies rises.
Industry experts point out that with people's expectations of clearer regulations from Trump's new government, the cryptocurrency industry may experience another milestone year, including more institutional adoption and a historic high in the number of global cryptocurrency investors.
Regulatory clarity will lead to a historic high in the number of cryptocurrency investors.
In 2024, the cryptocurrency industry experienced significant regulatory developments in some of the largest jurisdictions.
In Europe, the (Markets in Crypto-Assets Regulation) (MiCA)—the world's first comprehensive cryptocurrency regulatory framework—came into full effect on December 30, providing comprehensive guidelines for cryptocurrency service providers.
In Asia, Singapore is becoming the next crypto hub with its 'risk-adjusted' regulations, helping the country double the number of digital asset licenses issued annually in 2024.
Singapore has 1,600 blockchain patents, 2,433 industry-related job openings, and 81 cryptocurrency exchanges. These figures are impressive for a country with a population of less than 6 million.
Chainalysis CEO Jonathan Levin stated that these global regulatory developments will usher in more retail and institutional investor adoption.
Levin said: "We can expect an increase in adoption rates among institutional and retail investors next year, especially as these regulations bring greater transparency to the industry."
He added that these new regulations will also enhance industry trust, market integrity, and consumer protection, "making the industry more appealing to retail investors."
Levin stated that regulatory transparency will lead to a historic high in the number of daily cryptocurrency users and stimulate the growth of institutional products such as exchange-traded funds (ETFs).
According to Triple-A's 2024 cryptocurrency ownership report, as of July 12, an estimated 560 million cryptocurrency holders account for 6.8% of the global population.
There are a total of 560 million cryptocurrency holders worldwide. Source: triple-a
Pavlo Denysiuk, CEO of crypto payment company Lunu, stated that based on current user growth, the number of cryptocurrency holders could double in the next two years.
Denysiuk stated during a panel discussion at NFT Fest 2024: "This is where we see more adoption in various places and in payments."
ETFs and government BTC reserve programs will drive institutional adoption.
The U.S. spot Bitcoin ETF has brought more institutional adoption by making it easier for traditional financial institutions to invest in BTC.
Bitcoin ETFs approached the $110 billion mark in less than a year after launch, supporting analysts' predictions of a $200,000 peak for Bitcoin in 2025.
Chainalysis CEO Levin stated that this dynamic will pave the way for institutions to increasingly accept Bitcoin as an asset class:
"This is likely to translate into sustained institutional interest, as well as efforts by financial institutions and cryptocurrency companies to build the necessary infrastructure and resilience to support investor demand."
As a significant indicator of Bitcoin's adoption, its status as a savings technology is increasingly rising in the U.S., thanks to the Bitcoin bill advocated by Wyoming Senator Cynthia Lummis, which proposes the establishment of strategic Bitcoin reserves.
Lummis Bitcoin Bill. Source: Lummis.senate.gov
Anastasija Plotnikova, co-founder and CEO of Fideum, stated that the Bitcoin reserve proposal is gaining strong support due to U.S. President Donald Trump's victory in the November 2024 election and the Republican majority in the Senate.
Adam Back, co-founder and CEO of Blockstream, the inventor of Hashcash, and one of the most renowned cryptographers in the industry, stated that if the (Bitcoin bill) is accepted by U.S. lawmakers, Bitcoin's price could eventually exceed $1 million.
Cryptocurrency adoption in low-income countries is expected to continue growing.
According to the Chainalysis cryptocurrency geography report released in October 2024, cryptocurrency activity increased and peaked at the 2021 bull market high in 2024.
The report states that the Chainalysis Global Index, which measures the total value of global cryptocurrency activity, reached a new high of above 0.75 in the first quarter of 2024.
Global index measuring the value of cryptocurrency activity. Source: Chainalysis
The report added that while cryptocurrency adoption in 2023 was primarily driven by low- and middle-income countries, the peak in 2024 was attributed to increased cryptocurrency activity across countries of all income levels, while high-income countries saw a decline in cryptocurrency activity at the beginning of 2024.
Levin noted that the increase in global activity is primarily due to the growing real-world use cases for stablecoins and the debut of the U.S. Bitcoin ETF:
"There are many factors driving this trend, from the U.S. launching Bitcoin ETFs to stablecoins supporting use cases in low- and middle-income countries in the real world, and a significant increase in DeFi activities in sub-Saharan Africa, Latin America, and Eastern Europe."
2024 Global Cryptocurrency Adoption Index. Source: Chainalysis
Low- and middle-income countries like India, Nigeria, and Indonesia lead in adoption, with India ranking first in the Chainalysis Global Cryptocurrency Adoption Index.
In Latin America, El Salvador adopted Bitcoin as legal tender on September 7, 2021, bringing over $31 million in profits to the country in the first three years.
Despite making a profit of $31 million, President Nayib Bukele's decision was widely criticized after Bitcoin, which had fallen from its all-time high of $69,000 in November 2021 following the collapse of the FTX exchange, saw a significant decline in El Salvador's Bitcoin holdings after it dropped to $16,000 during the bear market.
Author and intergovernmental blockchain expert Anndy Lian stated that El Salvador's decision to adopt Bitcoin is an important step in Bitcoin's increasing integration into the global financial system.
Lian stated that similar government initiatives could encourage other countries to adopt Bitcoin:
"As more countries consider this path, we may see a gradual redefinition of 'safe' reserve assets. If Bitcoin becomes the primary currency for national reserves, it could fundamentally change the global financial landscape, driving more decentralized and digitized economic stability approaches."
BTC and gold, 1-year chart. Source: Cointelegraph/TradingView
Bitcoin could even become the next reserve asset after gold. TradingView data shows that Bitcoin has risen more than 131% over the past year, while gold prices have increased by about 30%.
Cryptocurrency investors remain highly optimistic about 2025, especially on January 6, just two weeks before Donald Trump's inauguration on January 20, when Bitcoin reclaimed $100,000—seen as a potential catalyst for cryptocurrency prices due to clearer regulations.
The bullish trend for Bitcoin in 2025 is expected to attract more investor attention to the cryptocurrency industry, with price predictions ranging from $160,000 to over $180,000.
