Original authors: Matt Hougan & Ryan Rasmussen, Bitwise
Translated by: Yuliya, PANews
The year 2024 will be a milestone year for the cryptocurrency market. Bitcoin soared to an all-time high of $103,992 (up 141.72% year-to-date as of the time of writing), mainly due to the record issuance of the US spot Bitcoin ETF, which attracted $33.56 billion in assets. Other major crypto assets also saw significant increases: Solana up 127.71%, XRP up 285.23%, and Ethereum up 75.77%. Meanwhile, crypto-related stocks such as MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record prices are not the only noteworthy development. Cryptocurrency has a noticeable advantage in the 2024 US election, making the regulatory outlook for cryptocurrency in the US more promising. Elected President Trump has supported cryptocurrency during his campaign, pledging to establish a Bitcoin strategic reserve and restructure the SEC (which has historically been hostile to cryptocurrency). He also nominated Scott Bessent as Treasury Secretary, who has stated, 'Cryptocurrency represents freedom; the crypto economy will endure.' As we enter 2024, Congress also appears to lean towards supporting cryptocurrency, with pro-crypto candidates defeating opponents in several key elections. Supportive legislation for cryptocurrency is expected in the coming months.
With global stimulus policies from China and other major central banks, the growing institutional adoption rate, and rapid improvements in blockchain technology, the outlook for 2025 looks quite bright.
TL;DR
01: Bitcoin, Ethereum, and Solana will reach new all-time highs, with Bitcoin trading price exceeding $200,000.
02: Capital inflow to Bitcoin ETFs in 2025 will exceed that of 2024.
03: Coinbase will surpass Charles Schwab to become the most valuable brokerage in the world, with its stock price exceeding $700.
04: 2025 will be the 'crypto IPO year', with at least five crypto unicorns going public in the US.
05: Tokens issued by AI agents will lead a larger wave of meme coins than in 2024.
06: The number of countries holding Bitcoin will double.
07: Coinbase will enter the S&P 500 index, and MicroStrategy will enter the Nasdaq 100 index, adding cryptocurrency exposure to (almost) every US investor's portfolio.
08: The US Department of Labor will ease restrictions on cryptocurrency in 401(k) plans, allowing hundreds of billions of dollars to flow into crypto assets.
09: As the US passes the long-awaited stablecoin legislation, the scale of stablecoin assets will double to $400 billion.
10: As Wall Street's acceptance of cryptocurrency deepens, the value of Real World Asset (RWA) tokenization will exceed $50 billion.
Additional prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, trading at over $1 million per coin
Prediction 1: Bitcoin, Ethereum, and Solana will reach new all-time highs, with Bitcoin exceeding $200,000
The three giants of cryptocurrency — Bitcoin, Ethereum, and Solana outperformed all major asset classes in 2024, rising 141.72%, 75.77%, and 127.71%, respectively. In contrast, the S&P 500 index rose 28.07%, gold 27.65%, and bonds 3.40%.
This momentum is expected to continue into 2025, with Bitcoin, Ethereum, and Solana all reaching new all-time highs. Specific target prices are as follows:
Bitcoin: $200,000
Record ETF inflows will drive Bitcoin to new highs in 2024
This trend is expected to continue
The April 2024 halving will reduce new supply
New buying demand from corporations and governments
If the US government implements the proposal to establish a strategic reserve of 1 million Bitcoins, prices could reach $500,000 or higher
Ethereum: $7,000
Despite a 75.77% increase in 2024, Ethereum's attention among investors has declined
A narrative shift is expected in 2025
Drivers include:
Increased activity in Layer 2 blockchains (such as Base and Starknet)
Spot Ethereum ETFs will attract billions in inflows
Massive growth of stablecoins and tokenization projects on Ethereum
Solana: $750
Strong recovery driven by meme coin frenzy in 2024
Momentum is expected to continue to strengthen
The catalyst for 2025 will be the migration of 'serious' projects to the network
There are early cases, such as the migration of the Render project
This trend is expected to accelerate in the coming year
Catalysts
Increased institutional investment
Continued buying by corporations
Investment banks approving cryptocurrency businesses
US strategic Bitcoin reserve plan
Better regulatory and political environment
Bitcoin halving leads to supply tightening
Layer-2 scaling solutions
Macro positives (interest rate cuts, China's stimulus policies)
Increased allocation ratios (3% becoming the new 1% standard)
Potential downside factors
Disappointing Washington policy
Leverage liquidation risks
Government sell-offs
Meme coin frenzy failure
Interest rate cuts not meeting expectations
Prediction 2: Capital inflow to Bitcoin ETFs in 2025 will exceed that of 2024
When the US spot Bitcoin ETF launches in January 2024, ETF experts predict this product group will attract between $5 billion and $15 billion in capital inflows in its first year. In fact, it exceeded the upper limit of this expected range within the first six months. Since its launch, these record-setting ETFs have attracted $33.6 billion in capital inflows. It is expected that capital inflows in 2025 will exceed this number. Three supporting reasons for this prediction:
1. The first year is usually the slowest year for ETFs
The best historical analogy for Bitcoin ETFs is the launch of gold ETFs in 2004
That year, gold ETFs attracted $2.6 billion in capital inflows, which was exciting
But the situation in the following years (numbers adjusted for inflation) was:
Year 2: $5.5 billion
Year 3: $7.6 billion
Year 4: $8.7 billion
Year 5: $16.8 billion
Year 6: $28.9 billion
The key is: the inflow of funds in the second year exceeding that of the first year aligns with the growth pattern of gold ETFs; a decrease in inflows would be unusual.
2. Major investment banks are joining in
The world's largest investment banks (including Morgan Stanley, Merrill Lynch, Bank of America, and Wells Fargo) have yet to unleash the power of their wealth management teams
These wealth managers currently have little access to these products
This situation is expected to change in 2025
Trillions of dollars managed by these firms will begin to flow into Bitcoin ETFs
3. Investors are gradually increasing allocations — 1% becoming 3% is the new trend
Bitwise has observed a clear pattern while helping investment professionals enter the cryptocurrency market over the past seven years:
Most investors start with small allocations and gradually increase them over time
It is expected that investors purchasing Bitcoin ETFs in 2024 will mostly double their investments in 2025
Prediction 3: Coinbase will surpass Charles Schwab to become the most valuable brokerage in the world, with its stock price exceeding $700 per share
At the beginning of 2023, investors could purchase Coinbase stock for $35. Today, its stock price has reached $344, nearly a tenfold increase. Predictions indicate this price may continue to rise, potentially significantly.
Prediction: Coinbase stock will exceed $700 in 2025 (more than double the current price). This will make Coinbase the most valuable brokerage in the world, surpassing Charles Schwab.
The reason is: Coinbase is not just a brokerage.
The three main catalysts driving its development include:
1. Stablecoin business
Thanks to an agreement with USDC issuer Circle, Coinbase's stablecoin business is thriving
Year-to-date, stablecoin revenue has grown by $162 million (+31%)
If the development trajectory of stablecoins meets expectations, this trend will continue
2. Base Network
Last year, Coinbase launched a new Layer 2 network based on Ethereum called Base
Currently ranks first in both trading volume and total value locked among L2 networks
With growth comes significant revenue
Base now generates tens of millions of dollars in revenue each quarter
As more developers, users, and capital flow into the ecosystem, this revenue is expected to grow further
3. Staking and custody services
As of the third quarter, these two businesses generated $589 million in revenue
An increase of $304 million (+106%) compared to the same period last year
Both businesses are driven by asset balances and net new asset inflows
Both metrics are expected to see significant increases in 2025
Annual revenue for these business lines is expected to exceed $1 billion
Prediction 4: 2025 will be the 'crypto IPO year', with at least five crypto unicorns going public in the US.
In recent years, IPOs in the cryptocurrency space have been relatively quiet. However, 2025 is expected to see a wave of IPOs from crypto unicorns.
Why now?
The background of currently listed cryptocurrency companies is significantly different from previous years:
Cryptocurrency prices are rising
Investor demand is growing
Institutional adoption is surging
Blockchain technology has become mainstream
The macro environment is favorable
Most importantly, the political environment has warmed up
These factors together create favorable conditions for industry giants to go public.
Top five candidates for IPO in 2025:
1. Circle
Issuer of USDC (one of the largest stablecoins)
Has been actively preparing for an IPO
Has a strong position in the stablecoin market
Expanding into new financial service areas
2. Figure
Known for providing various financial services utilizing blockchain technology
Offers mortgage, personal loan, and asset tokenization services
Has been exploring the potential for an IPO since 2023
With Wall Street's increasing focus on tokenization, the timing may be ripe
3. Kraken
One of the largest cryptocurrency exchanges in the US
Considering an IPO since 2021
The plan is delayed due to market conditions
Development momentum may be regained in 2025
4. Anchorage Digital
Provides digital asset infrastructure services
Diverse clientele, including investment advisors, asset managers, and venture capital firms
Holds federal charter banking qualifications
Comprehensive crypto services may prompt it to seek an IPO
5. Chainalysis
Market leader in blockchain compliance and intelligence services
Unique service offerings
Good growth trajectory
With the cryptocurrency industry increasingly focusing on compliance requirements, it is very likely to enter the public market
Prediction 5: Tokens issued by AI agents will lead a larger wave of meme coins than in 2024
A larger wave of meme coins is expected in 2025 compared to 2024, with tokens issued by AI agents leading this wave.
GOAT case: The first collision of AI and meme coins
A striking case comes from a16z's Marc Andreessen's interaction with the autonomous chatbot Truth Terminal. The AI agent promoted a niche meme coin called GOAT, which started as an experimental project and ultimately reached a market cap exceeding $1.3 billion, showcasing the vast potential of AI combined with meme coins.
Clanker: A groundbreaking AI token issuance platform
Clanker, as an innovative platform, enables autonomous token deployment on Coinbase's Layer 2 scaling solution, Base.
Users simply need to tag Clanker on Farcaster and provide the token name and image, and the AI agent can automatically complete the token deployment.
Within just one month of operation, Clanker has issued over 11,000 tokens, generating over $10.3 million in fee revenue.
Future outlook
AI-issued tokens are expected to drive a new wave of meme coins in 2025. Although these tokens may lack practical application value and most may eventually go to zero, they represent the fusion of two groundbreaking technologies: AI and cryptocurrency, and this innovative development direction will continue to attract market attention.
Prediction 6: The number of countries holding Bitcoin will double.
Prospects for the US strategic reserve
There remains uncertainty about whether the US will establish a Bitcoin strategic reserve in 2025. However, there are positive signals:
Wyoming Republican Senator Cynthia Lummis has proposed a bill suggesting the US purchase 1 million Bitcoins within five years.
President-elect Trump has expressed support for this proposal.
However, according to Polymarket predictions, this possibility is less than 30%.
Global competitive landscape
The US's consideration of establishing a strategic reserve of Bitcoin has already triggered a global chain reaction:
Lawmakers from Poland to Brazil are introducing bills to establish their own Bitcoin strategic reserves.
Governments are accelerating their layouts to avoid missing out on opportunities.
Current status and future outlook
According to BitcoinTreasuries.net data:
Currently, nine countries around the world hold Bitcoin, with the US leading the way
This number is expected to double by 2025
Prediction 7: Coinbase will enter the S&P 500, and MicroStrategy will enter the Nasdaq 100
Coinbase and MicroStrategy, two major publicly listed companies in the cryptocurrency space, will be included in mainstream stock indices, meaning that almost all US investors' portfolios will gain exposure to the cryptocurrency sector.
Market status
Ordinary American investors currently have no exposure to cryptocurrencies
Cryptocurrency as an emerging asset class, many investors either do not understand it or choose to avoid it actively.
But almost every investor holds funds that track the S&P 500 or Nasdaq 100.
Many investors hold both types of index funds simultaneously
Potential impact
Once these two companies are included in the index, they will have a huge market impact:
Approximately $10 trillion in assets directly track the S&P 500 index
An additional $6 trillion in assets benchmarked to this index
Expected capital inflow after Coinbase is included in the index:
Index funds need to buy approximately $15 billion in stocks
Benchmark funds may bring an additional $9 billion in buying demand
MicroStrategy's impact will still be significant, despite its relatively small influence due to the smaller tracking fund size of the Nasdaq 100.
Prediction 8: The US Department of Labor will ease restrictions on cryptocurrency in 401(k) plans
In March 2022, the US Department of Labor issued guidance warning 401(k) plan fiduciaries to pay attention to the significant risks of cryptocurrency investment options, announcing the launch of an investigation project to protect plan participants from these risks.
With the arrival of the new government in Washington, it is expected that the Department of Labor will relax this strict guidance. The significance of this policy change can be seen in the data:
US 401(k) plans currently manage $8 trillion in assets
These funds continue to receive weekly infusions of new capital
If the allocation ratio for cryptocurrencies reaches:
1%: An additional $80 billion in new capital will flow into the cryptocurrency space
3%: Will bring $240 billion in new capital
Prediction 9: Stablecoin assets will double to $400 billion as the US passes the long-awaited stablecoin legislation.
The stablecoin market will flourish in 2025, with a market capitalization reaching $400 billion or more. This growth will be driven by key factors including:
Stablecoin legislation
Washington's pro-cryptocurrency policymakers are most likely to achieve their goal through comprehensive stablecoin legislation. This will answer important questions regarding regulation and appropriate reserve requirements. Clear regulations will spark immense interest from issuers, consumers, and businesses. Large traditional banks like JPMorgan are expected to enter this space.
Fintech integration
Stripe acquired stablecoin platform Bridge for $1.1 billion, stating that stablecoins have become 'superconductors of financial services' due to their speed, accessibility, and low cost. PayPal launched its own stablecoin (PYUSD) in 2023, and Robinhood recently announced plans to partner with several cryptocurrency companies to launch a global stablecoin network. As stablecoins integrate into popular fintech applications, the scale of assets managed and trading volume will significantly increase.
Global trade and remittances
In 2024, stablecoin trading volume reached $8.3 trillion, close to Visa's $9.9 trillion during the same period. Stablecoin giant Tether recently financed $45 million in crude oil transactions through its USDT stablecoin. As digital dollars continue to disrupt these massive markets, demand for stablecoins will continue to grow.
Bull market growth
As the most obvious catalyst, the overall expansion of the cryptocurrency market will drive growth in managed stablecoin assets. The cryptocurrency market is bullish in 2025, and the stablecoin market will also grow accordingly.
Prediction 10: As Wall Street accelerates its entry, the scale of RWA tokenization will exceed $50 billion
Three years ago, the cryptocurrency industry had tokenized less than $2 billion in real-world assets (RWAs), including private credit, US debt, commodities, and stocks. Today, this market size has reached $13.7 billion.
The significant growth of tokenization is primarily due to its clear advantages: it provides instant settlement, costs far lower than traditional securitization, and offers 24/7 liquidity while bringing transparency and accessibility to nearly all asset classes.
BlackRock CEO Larry Fink has transformed from a bitcoin skeptic to a firm supporter of tokenization, stating that 'security tokenization will be the next generation form of the market.' This statement from the head of the world's largest asset management company carries significant weight.
Wall Street has only just begun to recognize this, meaning that a large amount of institutional capital may soon flood into the tokenized RWA space.
By 2025, the market size for tokenized RWA is expected to reach $50 billion and may begin to grow exponentially thereafter.
Venture capital firm ParaFi recently predicted that by the 2030s, the market size for tokenized RWAs could grow to $2 trillion, while the Global Financial Markets Association predicted it could reach $16 trillion.
Additional prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with a single price exceeding $1 million
While people often tend to make one-year predictions, the long-term outlook for Bitcoin is much more promising.
It is expected that by 2029, Bitcoin's market capitalization will surpass that of the gold market. Based on the current market value of gold, this means that the price of each Bitcoin will exceed $1 million.
Choosing 2029 as the time point is no coincidence: Bitcoin has historically operated on a four-year cycle. While this pattern may not necessarily continue, 2029 will mark the peak of the next cycle (also the 20th anniversary of Bitcoin's birth). Surpassing the gold market within 20 years of its inception is undoubtedly a significant achievement, but Bitcoin is poised to achieve this.
Notably, if the US announces plans to purchase 1 million Bitcoins for a strategic reserve, the price of Bitcoin may breach $1 million much sooner.
