Article source: Jinse Finance
Author: Zoltan Vardai
Translation: Bai Shui, Jinse Finance
With increasing regulatory clarity and soaring cryptocurrency valuations, the global cryptocurrency industry is expected to gain mainstream and institutional recognition again in 2025.
2024 saw a historic high, with Bitcoin's price reaching an all-time high of $108,300 on December 17, more than a month after Donald Trump's victory in the U.S. presidential election, as optimism among cryptocurrency investors is rising.
Industry experts point out that with clearer expectations for regulation under Trump's new government, the cryptocurrency industry may see another milestone year, including more institutional adoption and a record number of global cryptocurrency investors.
Regulatory clarity will lead to a historic high in the number of cryptocurrency investors.
In 2024, the crypto industry experienced significant regulatory developments in some of the largest jurisdictions.
In Europe, the (Crypto Asset Markets Regulation) (MiCA) — the world's first comprehensive crypto regulatory framework — came into full effect on December 30, providing comprehensive guidelines for crypto service providers.
In Asia, Singapore is becoming the next crypto hub with its 'risk-adjusted' regulations that helped the country double the number of digital asset licenses issued annually in 2024.
Singapore has 1,600 blockchain patents, 2,433 industry-related jobs, and 81 cryptocurrency exchanges. These numbers are remarkable for a country with a population of less than 6 million.
Chainalysis CEO Jonathan Levin stated that these global regulatory developments will lead to greater adoption by both retail and institutional investors.
Levin stated, 'We can expect an increase in adoption rates by institutional and retail investors next year, especially as these regulations bring greater transparency to the industry.'
He added that these new regulations will enhance industry trust, market integrity, and consumer protection, 'making the sector more attractive to retail investors.'
Levin stated that regulatory transparency will lead to a historic high in daily cryptocurrency users and stimulate the growth of institutional products like exchange-traded funds (ETFs).
According to Triple-A's 2024 Cryptocurrency Ownership Report, as of July 12, there are an estimated 560 million cryptocurrency holders, accounting for 6.8% of the global population.
Globally, there are 560 million cryptocurrency holders. 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 everywhere, as well as in payments.'
ETFs and government BTC reserve programs will drive institutional adoption.
The U.S. spot Bitcoin exchange-traded fund has led to more institutional adoption by making it easier for traditional financial institutions to access BTC investments.
The Bitcoin ETF approached the $110 billion mark in less than a year after its launch, supporting analysts' predictions of a peak of $200,000 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 infrastructure and resilience needed to support investor demand.
As an important marker for 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 support due to the election of Donald Trump as the U.S. President and the Republican majority in the Senate during the November 2024 elections.
Blockstream co-founder and CEO, Hashcash inventor, and one of the most renowned cryptographers in the industry, Adam Back, stated that if the (Bitcoin bill) is accepted by U.S. lawmakers, the price of Bitcoin could eventually exceed $1 million.
Cryptocurrency adoption in low-income countries is expected to continue to grow.
According to Chainalysis's (Cryptocurrency Geography Report) published in October 2024, cryptocurrency activity increased and peaked at the 2021 bull market high in 2024.
The report states that Chainalysis's Global Index, which measures the total value of global crypto activity, rose to over 0.75 in the first quarter of 2024, a new high.
Global index measuring the value of crypto activity. Source: Chainalysis
The report adds that while cryptocurrency adoption in 2023 was primarily driven by lower-middle-income countries, the highs of 2024 are attributed to increased crypto activity across countries of all income levels, while high-income countries saw a decrease in crypto activity at the start of 2024.
Levin noted that the increase in global activity is mainly due to the growing real-world use cases of stablecoins and the debut of the U.S. Bitcoin ETF:
There are many factors driving this trend, from the U.S. launching a Bitcoin ETF to stablecoins supporting real-world use cases in low-income and lower-middle-income countries, along with a significant increase in DeFi activities in sub-Saharan Africa, Latin America, and Eastern Europe.
2024 Global Cryptocurrency Adoption Index. Source: Chainalysis
Countries with lower-middle incomes, such as India, Nigeria, and Indonesia, are leading in adoption, with India ranking first in Chainalysis's Global Cryptocurrency Adoption Index.
In Latin America, El Salvador adopted Bitcoin as legal tender on September 7, 2021, bringing the country more than $31 million in profit in the first three years.
Despite making a profit of $31 million, President Nayib Bukele's decision faced widespread criticism after Bitcoin fell from its all-time high of $69,000 in November 2021 following the collapse of the FTX exchange. During the bear market, Bitcoin dropped to $16,000, significantly reducing El Salvador's Bitcoin holdings.
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 promote Bitcoin adoption in other countries:
As more countries consider this path, we may see a gradual redefinition of 'safe' reserve assets. If Bitcoin becomes the main currency for national reserves, it could fundamentally change the global financial landscape, driving more decentralized and digitized approaches to economic stability.
BTC and Gold, 1-Year Chart. Source: Cointelegraph/TradingView
Bitcoin may even become the next reserve asset after gold. TradingView data shows that Bitcoin has risen over 131% in 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, after Bitcoin reclaimed $100,000—this is seen as a potential catalyst for cryptocurrency prices due to increased regulatory clarity.
Bitcoin's surge in 2025 is expected to attract more investor attention to the cryptocurrency industry, with price predictions ranging from $160,000 to over $180,000.
