Driven by global stimulus policies from China and other major central banks, increasing institutional adoption rates, and rapid advancements in blockchain technology, the outlook for 2025 appears quite bright.
Written by: Matt Hougan, Ryan Rasmussen, Bitwise
Compiled by: Yuliya, PANews
2024 will be a milestone year for the cryptocurrency market. Bitcoin soared to a record high of $103,992 (up 141.72% year-to-date), primarily due to the record issuance of the US spot Bitcoin ETF, which attracted $33.56 billion in assets. Other major crypto assets also saw huge gains: Solana rose 127.71%, XRP rose 285.23%, and Ethereum rose 75.77%. Meanwhile, cryptocurrency-related stocks like MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record prices are not the only noteworthy development. Cryptocurrencies are significantly gaining prominence in the 2024 US elections, brightening the regulatory outlook for cryptocurrencies in the US. Elected President Trump supported cryptocurrencies during his campaign, promising to build a Bitcoin strategic reserve and restructure the SEC (which has historically been hostile towards cryptocurrencies). He also nominated Scott Bessent for Treasury Secretary, who has stated that 'cryptocurrency represents freedom, and the crypto economy will be here to stay'. As we enter 2024, Congress is also leaning towards supporting cryptocurrencies, with pro-crypto candidates defeating opponents in several key elections. Legislative support for cryptocurrencies is expected in the coming months.
Driven by global stimulus policies from China and other major central banks, increasing institutional adoption rates, and rapid advancements in blockchain technology, the outlook for 2025 appears quite bright.
TL;DR
01: Bitcoin, Ethereum, and Solana will reach all-time highs, with Bitcoin trading above $200,000.
02: Inflows into Bitcoin ETFs in 2025 will exceed those in 2024.
03: Coinbase will surpass Charles Schwab to become the world's most valuable brokerage, with its stock price breaking $700.
04: 2025 will be the 'Year of Crypto IPOs,' with at least five crypto unicorns going public in the US.
05: AI-issued tokens will lead to a larger Meme coin craze than in 2024.
06: The number of countries holding Bitcoin will double.
07: Coinbase will enter the S&P 500, and MicroStrategy will enter the NASDAQ 100, 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 in funds to flow into crypto assets.
09: As the US passes long-awaited stablecoin legislation, the asset size of stablecoins will double to $400 billion.
10: As Wall Street's acceptance of cryptocurrencies deepens, the value of tokenized real-world assets (RWA) will exceed $50 billion.
Additional prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, trading at over $1 million each.
Prediction 1: Bitcoin, Ethereum, and Solana will reach all-time highs, with Bitcoin breaking $200,000.
The three crypto giants—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 increased 27.65%, and bonds rose 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 drive Bitcoin to a new high in 2024
This trend is expected to continue.
The April 2024 halving will reduce new supply
New buying demand from enterprises 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.
The narrative is expected to shift in 2025.
Driving factors include:
Accelerating activity on Layer 2 blockchains (like Base and Starknet)
A spot Ethereum ETF will attract tens of billions in inflows.
Massive growth of stablecoins and tokenized projects on Ethereum.
Solana: $750
Strong recovery in 2024 driven by Meme coin frenzy.
Momentum is expected to continue to strengthen.
A 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
Corporates continue to buy
Investment banks approve cryptocurrency business.
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 stimulus policies)
Increased allocation ratios (3% becoming the new 1% standard).
Potential downsides
Disappointing Washington policies.
Risk of leveraged liquidation.
Government sell-offs.
The Meme coin craze fails
Interest rate cuts not meeting expectations.
Prediction 2: Inflows into Bitcoin ETFs in 2025 will exceed those in 2024.
When the US spot Bitcoin ETF launches in January 2024, ETF experts predict that the product group will attract $5 billion to $15 billion in inflows in the first year. In reality, it exceeded the upper limit of the expected range in just the first six months. Since its launch, these record ETFs have attracted $33.6 billion in inflows. Inflows for 2025 are expected to exceed this figure. The three main reasons supporting this prediction are:
1. The first year is usually the slowest for ETFs
The best historical analogy for Bitcoin ETFs is the launch of gold ETFs in 2004.
The gold ETF attracted $2.6 billion in inflows that year, which was encouraging.
But the situation in the following years (numbers adjusted for inflation):
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 that inflows in the second year exceeding those in the first year aligns with the development pattern of gold ETFs; a decrease in inflows would be unusual.
2. Major investment banks are joining.
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 virtually no access to these products
This situation is expected to change in 2025.
The trillions of dollars managed by these firms will start flowing into Bitcoin ETFs.
3. Investors are gradually increasing their allocations—1% becoming 3% is becoming the new trend.
Bitwise has observed a clear pattern over the past seven years as it has helped investment professionals enter the cryptocurrency market.
Most investors start with small allocations and then gradually increase over time.
Investors purchasing Bitcoin ETFs in 2024 will mostly double down in 2025.
Prediction 3: Coinbase will surpass Charles Schwab to become the world's most valuable brokerage, with its stock price exceeding $700.
At the beginning of 2023, investors could purchase Coinbase stock for $35. Today, its price has reached $344, nearly a tenfold increase. Predictions show that this price may continue to rise, potentially significantly.
Prediction: Coinbase stock will surpass $700 in 2025 (more than double from current prices). This will make Coinbase the most valuable brokerage in the world, surpassing Charles Schwab.
The reason is that Coinbase is more than just a brokerage.
Three main catalysts driving its development:
1. Stablecoin Business
Thanks to an agreement with USDC issuer Circle, Coinbase's stablecoin business is thriving.
Year-to-date, stablecoin revenues have increased by $162 million (+31%).
If the development trajectory of stablecoins aligns with expectations, this trend will continue.
2. Base Network
Last year, Coinbase launched a new Layer 2 network, Base, based on Ethereum.
Currently ranks first in trading volume and total value locked among L2 networks.
With growth comes substantial 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.
3. Staking and custodial services
As of the third quarter, these two businesses generated $589 million in revenue.
An increase of $304 million compared to the same period last year (+106%).
Both businesses are driven by asset balances and net new asset inflows.
These two indicators are expected to increase significantly in 2025.
These business lines are expected to exceed $1 billion in annual revenue.
Prediction 4: 2025 will be 'the Year of Crypto IPOs,' with at least five crypto unicorns going public in the US.
In the past few years, IPOs in the cryptocurrency sector have been relatively quiet. However, 2025 is expected to welcome a wave of IPOs from crypto unicorns.
Why now?
The background of currently listed cryptocurrency companies is significantly different from previous years:
Rising cryptocurrency prices.
Growing investor demand.
Surge in institutional adoption.
Blockchain technology has become mainstream.
Favorable macro environment.
Most importantly, the political environment has warmed up.
These factors collectively create favorable conditions for industry giants to go public.
Top five candidates for IPO in 2025:
1. Circle
USDC (one of the largest stablecoins) issuer
has been actively preparing for IPO
holds a strong position in the stablecoin market
is expanding into new financial services
2. Figure
Known for providing various financial services using blockchain technology.
Offers mortgage, personal loan, and asset tokenization services.
Exploring IPO possibilities since 2023.
With Wall Street's increasing focus on tokenization, the timing may now be ripe.
3. Kraken
One of the largest cryptocurrency exchanges in the US.
Considering IPO since 2021.
Plans delayed due to market conditions.
May regain momentum in 2025.
4. Anchorage Digital
Provides digital asset infrastructure services.
Diverse client base, 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 increasing focus on compliance requirements in the crypto industry, a public market entry is highly likely.
Prediction 5: AI-issued tokens will lead to a larger Meme coin craze than in 2024.
A larger-scale Meme coin craze is expected in 2025, with AI-issued tokens leading this wave.
GOAT Case: The first collision of AI and Meme coins.
A striking case comes from a16z's Marc Andreessen interacting with the autonomous chatbot Truth Terminal. The AI agent promoted a niche Meme coin called GOAT, which started as an experimental project and ultimately surpassed a market cap of $1.3 billion, fully showcasing the enormous potential of combining AI and Meme coins.
Clanker: A pioneering AI token issuance platform
Clanker, as an innovative platform, implements 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 a month of its launch, 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 ultimately go to zero, they represent the fusion of two groundbreaking technologies: AI and cryptocurrency, which will continue to attract market attention.
Prediction 6: The number of countries holding Bitcoin will double.
US Strategic Reserve Outlook
It remains uncertain whether the US will establish a Bitcoin strategic reserve in 2025. However, there are positive signals:
Wyoming Republican Senator Cynthia Lummis proposed legislation suggesting the US purchase 1 million Bitcoins within five years.
President-elect Trump expressed support for this proposal.
However, according to Polymarket's predictions, this possibility is less than 30%.
Global competitive landscape
The US's consideration of establishing a Bitcoin strategic reserve has already triggered a global chain reaction.
Legislators from Poland to Brazil are proposing bills to establish national Bitcoin strategic reserves.
Governments around the world are accelerating their layouts to avoid missing opportunities.
Current Status and Future Outlook
According to BitcoinTreasuries.net:
Currently, nine countries globally hold Bitcoin, with the US leading.
This number is expected to double by 2025.
Prediction 7: Coinbase will enter the S&P 500, and MicroStrategy will enter the NASDAQ 100.
Major publicly listed companies in the cryptocurrency sector, Coinbase and MicroStrategy, will be included in mainstream stock indices, meaning 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, is often misunderstood or actively avoided by many investors.
Almost every investor holds funds tracking 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 indices, it will create a huge market impact.
About $10 trillion in assets directly track the S&P 500 index.
An additional $6 trillion in assets benchmarked to this index.
Expected capital inflows after Coinbase is added to the index:
Index funds need to buy about $15 billion worth of stocks.
Benchmark funds could bring an additional $9 billion in buying demand.
While MicroStrategy's impact is relatively small due to the smaller size of the tracking funds for NASDAQ 100, it will still have a significant effect.
Prediction 8: The US Department of Labor will relax restrictions on cryptocurrency in 401(k) plans.
In March 2022, the US Department of Labor issued guidance warning 401(k) plan trustees of the significant risks associated with cryptocurrency investment options and announced the initiation of an investigatory project to protect plan participants from these risks.
With the arrival of a 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:
The US 401(k) plans currently manage $8 trillion in assets.
These funds continue to receive weekly new fund injections.
If the allocation ratio for cryptocurrencies reaches:
1%: Will bring an additional $80 billion in new funds to the cryptocurrency sector.
3%: Will bring an additional $240 billion in new funds.
Prediction 9: Stablecoin assets will double to $400 billion as the US passes long-awaited stablecoin legislation.
The stablecoin market will thrive in 2025, with a market cap reaching $400 billion or more. This growth will be driven by key factors:
Stablecoin Legislation
The most achievable goal for pro-crypto policymakers in Washington is comprehensive stablecoin legislation. This will answer important questions such as who will regulate and what the appropriate reserve requirements are. Clear regulations will spark significant interest from issuers, consumers, and businesses. Major traditional banks like JPMorgan are expected to enter this space.
Fintech Integration
Stripe acquired the stablecoin platform Bridge for $1.1 billion, stating that stablecoins have become 'the superconductor 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 collaborate with multiple cryptocurrency firms to launch a global stablecoin network. As stablecoins become integrated into popular fintech applications, the assets and trading volume managed by stablecoins will see significant growth.
Global trade and remittances
In 2024, stablecoin transaction volume reached $8.3 trillion, nearly matching Visa's $9.9 trillion payment volume during the same period. The stablecoin giant Tether recently provided financing for a $45 million crude oil transaction through its USDT stablecoin. As the digital dollar continues to disrupt these massive markets, the 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 the asset management size of stablecoins. The cryptocurrency market is bullish in 2025, and the stablecoin market will grow accordingly.
Prediction 10: With Wall Street accelerating its entry, the RWA tokenization scale 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, all-day liquidity, while bringing transparency and accessibility to nearly all asset classes.
BlackRock CEO Larry Fink has shifted from being a Bitcoin skeptic to a strong advocate for tokenization, stating that 'securities tokenization will be the next generation of the market.' The significance of this statement from the head of the world's largest asset management company is profound.
Wall Street has only just begun to recognize this, meaning vast institutional funds could soon flow into the tokenized RWA space.
By 2025, the market size for tokenized RWAs is expected to reach $50 billion and could potentially grow exponentially from there.
Venture capital firm ParaFi recently predicted that by 2030, the tokenized RWA market could grow to $2 trillion, while the Global Financial Markets Association forecasts it could reach $16 trillion.
Additional prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with a trading price over $1 million.
While people often tend to make one-year predictions, from a longer-term perspective, Bitcoin's development outlook is even more noteworthy.
By 2029, Bitcoin's market cap is expected to surpass that of gold. Based on gold's current market cap, this means the price of each Bitcoin will exceed $1 million.
Choosing 2029 as the timeframe is deliberate: 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 inception). Surpassing the gold market within 20 years of its existence would undoubtedly be a significant achievement, and Bitcoin is poised to achieve this.
Notably, if the US announces plans to purchase 1 million Bitcoins for strategic reserves, the time for Bitcoin prices to break $1 million could be significantly advanced.
