Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: 0xjs@Gold Finance
Every year, the Bitwise team gathers to make annual predictions about the future of cryptocurrency. This process involves dozens of team members engaging in hours of discussion, debate, and reflection. It is one of the most exciting things we do each year.
We will release our 2025 predictions on December 10. Hint: we believe 2025 will be crazy. But it’s worth reviewing how we performed in 2024 before we make predictions for next year.
Background: Revisiting December 2023
First, let's set the stage.
We released our 2024 predictions on December 12, 2023. At that time, cryptocurrency was in a very different place. Bitcoin's trading price was $43,750, and anti-crypto rhetoric was very intense in Washington, D.C. Just days before we released the 2024 predictions, JPMorgan CEO Jamie Dimon testified at a congressional hearing that he has been 'strongly opposed to cryptocurrency, Bitcoin, etc.' He then said, 'If I were the government, I would shut it down.'
The progress made in 2024 is astounding. Bitcoin's current trading price is close to $100,000, pro-crypto politicians dominate Washington, and Wall Street firms are eagerly developing in this space. But none of this was obvious when we made our annual predictions in December 2023.
Let's see how we did.
2024 Prediction 1: The trading price of Bitcoin will exceed $80,000, setting a new historical high.
Result: Correct
Our prediction was accurate. Bitcoin broke through $80,000 in November and continued to rise, currently trading near $100,000. Our argument at the time—that the approval of the spot Bitcoin ETF and the Bitcoin halving would together drive up prices—was entirely correct.
We will announce our price targets for 2025 next week and will increase our price targets for Ethereum and Solana. Stay tuned.
Prediction 2: The spot Bitcoin ETF will be approved and become the most successful ETF launch ever.
Result: Correct
This is also a victory. The spot Bitcoin ETF approved in January 2024 has become the most successful ETF issuance to date. As of December 1, 2024, the Bitcoin ETF has attracted $31 billion in inflows. The previous record for 'most successful ETF issuance ever' was held by Invesco QQQ Trust (QQQ), which was listed in 1999 and attracted $5 billion in its first year. Gold ETFs attracted less than $2 billion in their first year. The inflows for the Bitcoin ETF are several times that figure and are still growing.
Prediction 3: Coinbase's revenue will double, exceeding Wall Street's expectations (profit) by at least ten times.
Result: Correct
It will be a close contest. Coinbase's revenue was $3.1 billion in 2023 and $4.1 billion in the first three quarters of 2024. Can it reach $6.2 billion by the end of the year? I think it can. The fourth quarter is an extraordinary quarter for cryptocurrency.
Coinbase remains one of the most fascinating companies in the world, and in our view, the company is undervalued. Next week, we will also release a series of predictions related to Coinbase.
Prediction 4: Funds settled using stablecoins will exceed those settled using Visa.
Result: Incorrect
In the first six months of 2024, the global amount settled using stablecoins reached $5.1 trillion, a significant increase from the same period last year. But they have not yet caught up to Visa, which settled $6.5 trillion in the same period. Close, but not a victory yet.
Prediction 5: As Wall Street prepares to tokenize real-world assets, JPMorgan will tokenize a fund and launch it on-chain.
Result: Incorrect
I really hope this dream comes true. It would be a sweet irony to see JPMorgan (whose CEO once angrily called for Washington to 'shut down' cryptocurrency) tokenize its own fund.
We are so close to success! Tokenizing funds on Wall Street is a major theme for 2024. BlackRock, Franklin Templeton, Guggenheim, UBS, and Société Générale have all taken steps in this direction. JPMorgan has invested heavily in tokenization, rebranding its tokenization platform and calling tokenization 'the next generation of financial infrastructure.' However, the company has not actually launched a fund, so we cannot claim victory.
Prediction 6: As users flock to crypto applications, Ethereum's revenue will more than double to reach $5 billion.
Result: Incorrect
What we said before was quite outrageous. In 2024, activity for Ethereum-based applications will increase significantly, but revenue by the end of the year may be slightly lower than last year's $2 billion. Why? The Ethereum 'Dencun' upgrade in March reduced network fees by 99%. We ultimately believe this is beneficial for the network, but the short-term hit to revenue is challenging.
Prediction 7: Taylor Swift will launch NFTs to connect with fans in new ways.
Result: Incorrect
This did not happen, but it remains a key area to watch in 2025. Reports suggest that Taylor has been concerned about whether NFTs are securities. If we gain clearer regulatory guidance on NFTs in the next year, this issue may be back on the agenda.
Prediction 8: AI assistants will use cryptocurrency for online payments, confirming cryptocurrency as the 'native currency of the internet.'
Result: Correct
In July, legendary venture capitalist Marc Andreessen donated $50,000 worth of Bitcoin to an AI robot called Truth Terminal. The robot ultimately helped promote a meme coin—Goatseus Maximus (GOAT)—which is currently valued at $674 million. We speculate that AI robots will widely use cryptocurrency and stablecoins in the coming years. Although the GOAT experiment is wild, it provides an astonishing proof of concept.
Prediction 9: As prediction markets become the new 'killer app' for cryptocurrency, over $100 million will be invested in them.
Result: Correct
This is the prediction I am most proud of.
By December 2023, few had heard of Polymarket, a cryptocurrency-based prediction market where users can bet on the outcomes of global events. But we are fans of the platform and believe it will take off as the US elections approach. Wow, we were right: the total amount wagered on the platform surged from $8 million at the time of our prediction to over $500 million at peak levels. Polymarket became a household name in the process. It also proved its special foresight in the 2024 elections.
In our 2025 predictions article, we will forecast the next breakthrough crypto application.
Prediction 10: Major upgrades to the Ethereum blockchain will reduce average transaction costs to below $0.01, paving the way for more mainstream uses.
Result: Correct
Let me calculate this. The average transaction cost for many Ethereum layer 2 networks has dropped by over 90% year-over-year and currently hovers between $0.01 and $0.02. But it fell below $0.01 this summer, and I believe we will reach that level again soon as underlying technology continues to improve. Transactions below one cent on major blockchains will change the world.
Additional Prediction: By the end of 2024, a quarter of financial advisors will allocate cryptocurrency in client accounts.
Result: Pending
Every year, we survey financial advisors to understand how many have clients holding cryptocurrency. In 2023, only 11% responded 'yes.' The survey for the end of 2024 is still ongoing, so we do not yet know if we will reach the 25% level. A potential hurdle is that large banks like Wells Fargo, UBS, and Merrill have yet to approve spot Bitcoin ETFs. But we believe it's just a matter of time, not if.
Conclusion
So how did we do? Six right, four wrong, and one pending. Given how aggressive our predictions were—Bitcoin prices doubling, predictions markets soaring, Ethereum fees dropping by 99%—all in a rapidly changing field—we accept it.
But one thing is certain: our accuracy will be higher in 2025. Stay tuned.
