Original title: 7 Predictions For Crypto In 2025: Bitcoin, ETFs & Global Adoption
Original author: Leeor Shimron, Forbes
Compiled by: Luke, Mars Finance
2024 is set to be a historic turning point for Bitcoin and the broader cryptocurrency ecosystem. This year marks the launch of the first Bitcoin and Ethereum ETFs, signaling true institutional adoption. Bitcoin will break the $100,000 mark for the first time, while stablecoins continue to solidify the dollar's dominant position globally. To further drive this momentum, the winning U.S. presidential candidate will make support for Bitcoin a core pillar of their campaign.
Overall, these milestones solidify 2024 as the year the crypto industry proves itself as an unstoppable force on the global stage. As the industry shifts its focus to 2025, here are seven major predictions for significant events that may occur next year.
1) A major country in the G7 or BRICS will establish and announce a strategic Bitcoin reserve.
The Trump administration proposed establishing a Strategic Bitcoin Reserve (SBR) for the U.S., sparking much debate and speculation. While adding Bitcoin to the U.S. Treasury's balance sheet would require considerable political will and congressional approval, merely proposing this initiative has far-reaching implications.
By signaling the possibility of SBR, the U.S. is effectively inviting other major countries to consider similar measures. Game theory suggests that these countries may be incentivized to take preemptive action, potentially securing a strategic advantage in national reserve diversification ahead of the U.S. The limited supply of Bitcoin and its emerging role as a digital store of value may escalate the urgency for countries to act swiftly.
Now, a race is underway to see which major country will be the first to incorporate Bitcoin into its national reserves, holding it as a diversification asset like gold, foreign currency, and government bonds. This move would not only solidify Bitcoin's status as a global reserve asset but could also reshape the landscape of international finance and have profound implications for economic and geopolitical power structures. The establishment of strategic Bitcoin reserves by any major economy could mark the beginning of a new era in sovereign wealth management.
2) Stablecoins will continue to grow, doubling to over $400 billion.
Stablecoins have become one of the most successful mainstream use cases for cryptocurrencies, bridging traditional finance and the cryptocurrency ecosystem. Millions of people worldwide use stablecoins for remittances, everyday transactions, and to hedge against local currency volatility by leveraging the relative stability of the dollar.
In 2024, the circulation of stablecoins reached an all-time high of $200 billion, with market leaders being Tether and Circle. These digital currencies rely on blockchain networks like Ethereum, Solana, and Tron to facilitate seamless, borderless transactions.
Looking ahead, the growth of stablecoins is expected to accelerate in 2025, possibly doubling to over $400 billion. The passage of specialized legislation for stablecoins will drive this growth, potentially providing the much-needed regulatory clarity and fostering innovation in the industry. U.S. regulators are increasingly recognizing the strategic importance of stablecoins in strengthening the dollar's global dominance and solidifying its status as the world's reserve currency.
3) Bitcoin DeFi supported by L2 will become a major growth trend.
Bitcoin is transcending its role as a store of value, with second-layer (L2) networks like Stacks, BOB, Babylon, and CoreDAO unlocking the potential of a thriving Bitcoin DeFi ecosystem. These L2s enhance Bitcoin's scalability and programmability, enabling decentralized finance (DeFi) applications to thrive on the most secure and decentralized blockchain.
2024 will be a transformative year for Stacks, marked by the launch of the Nakamoto upgrade and sBTC. The Nakamoto upgrade allows Stacks to inherit 100% of Bitcoin's determinism and introduces faster block speeds, significantly improving user experience. Meanwhile, the trustless Bitcoin-pegged asset sBTC launched in December enables seamless participation in DeFi activities such as lending, swapping, and staking—all based on the security of Bitcoin.
Previously, Bitcoin holders seeking DeFi opportunities were forced to transfer their Bitcoins to other networks like Ethereum. This process relied on centralized custodians such as WBTC (BitGo), BTCB (Binance), and cbBTC (Coinbase), exposing users to centralization and censorship risks. Bitcoin L2 reduces these risks by providing a more decentralized alternative, allowing Bitcoin to operate natively within its own ecosystem.
Looking ahead to 2025, Bitcoin DeFi will experience exponential growth. I predict that the total value locked (TVL) on Bitcoin L2 will exceed the $24 billion currently represented by wrapped Bitcoin derivatives, accounting for approximately 1.2% of Bitcoin's total supply. As Bitcoin's market capitalization reaches $2 trillion, L2 networks will enable users to safely and efficiently unlock this enormous potential value, solidifying Bitcoin's position as the cornerstone of decentralized finance.
4) Bitcoin ETFs will continue to surge, and new cryptocurrency-focused ETFs will emerge.
The launch of the spot Bitcoin ETF marks a historic milestone, becoming the most successful ETF debut in history. These ETFs attracted over $108 billion in assets under management (AUM) in their first year, demonstrating unparalleled demand from retail and institutional investors. Major players like BlackRock, Fidelity, and Ark Invest have played a key role in bringing regulated Bitcoin risk exposure into traditional financial markets, laying the groundwork for a wave of innovation in cryptocurrency-focused ETFs.
Following the success of Bitcoin ETFs, Ethereum ETFs have also emerged, providing investors with opportunities to invest in the second-largest cryptocurrency by market capitalization. Looking ahead, I expect staking to be integrated into Ethereum ETFs for the first time in 2025. This feature will allow investors to earn staking rewards, further enhancing the appeal and utility of these funds.
Other cryptocurrency protocols, such as Solana, are expected to launch ETFs soon, as Solana is known for its high-performance blockchain, thriving DeFi ecosystem, and rapid growth in games, NFTs, and memecoins.
In addition, we may see the launch of weighted cryptocurrency index ETFs aimed at providing diversified investment for the broader crypto market. These indices may include top-performing assets such as Bitcoin, Ethereum, and Solana, as well as emerging protocols, offering investors a balanced portfolio to capture the growth potential of the entire ecosystem. Such innovations will make crypto investments more accessible, efficient, and attract a wide range of investors, further driving capital into the space.
5) Other companies in the "Seven Tech Giants" of U.S. stocks, aside from Tesla, will also add Bitcoin to their balance sheets.
The Financial Accounting Standards Board (FASB) introduced fair value accounting rules for cryptocurrencies, which will take effect for fiscal years starting after December 15, 2024. These new standards require companies to report the fair market value of cryptocurrencies like Bitcoin that they hold, capturing gains and losses from market fluctuations in real-time.
Previously, digital assets were classified as intangible assets, forcing companies to write down impaired assets while prohibiting the recognition of unrealized gains. This conservative approach often undervalued the true worth of cryptocurrency assets on companies' balance sheets. The new rules address these limitations, making financial reporting more accurate and making cryptocurrencies a more attractive asset for company finances.
The seven tech giants—Apple, Microsoft, Google, Amazon, Nvidia, Tesla, and Meta—together hold over $600 billion in cash reserves, providing them with significant flexibility to allocate some capital to Bitcoin. With strengthened accounting frameworks and increased regulatory transparency, it is highly likely that one of these tech giants, aside from Tesla, will add Bitcoin to its balance sheet.
This move will reflect prudent financial management:
· Hedge against inflation: Prevent the devaluation of fiat currency.
· Diversified reserves: Adding uncorrelated limited digital assets to their portfolios.
· Capitalize on appreciation potential: Leverage the historical long-term growth of Bitcoin.
· Strengthen technological leadership: Stay aligned with the spirit of digital transformation and innovation-driven.
With the new accounting rules coming into effect and companies adapting their finances, Bitcoin may become a key reserve asset for the largest tech companies globally, further legitimizing its role in the global financial system.
6) The total market capitalization of cryptocurrencies will exceed $8 trillion.
In 2024, the total market capitalization of cryptocurrencies skyrocketed to a historic high of $3.8 trillion, encompassing a wide range of use cases including Bitcoin as a store of value, stablecoins, DeFi, NFTs, meme coins, GameFi, and SocialFi. This explosive growth reflects the expanding influence of the industry and the increasing adoption of blockchain-based solutions across various sectors.
By 2025, the influx of developer talent into the crypto ecosystem is expected to accelerate, driving the creation of new applications that achieve product-market fit and attract millions of additional users. This wave of innovation may spawn breakthrough decentralized applications (dApps) in areas such as artificial intelligence (AI), decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), and other emerging fields still in their infancy.
These transformative dApps offer practical utility and solve real-world problems, driving increased adoption and economic activity within the ecosystem. As the user base expands and capital flows into the space, asset prices will rise accordingly, pushing the overall market capitalization to unprecedented heights. With this momentum, the cryptocurrency market is expected to surpass $8 trillion, marking the continued growth and innovation of the industry.
7) The revival of crypto startups, and the U.S. will regain its status as a global crypto powerhouse.
The U.S. crypto industry stands on the brink of a transformative revival. The controversial "enforcement regulatory" approach of SEC Chairman Gary Gensler will end with his departure in January next year, a method that stifled innovation and forced many crypto startups overseas. His successor, Paul Atkins, brings a distinctly different perspective. As a former SEC commissioner (2002-2008), Atkins is known for his pro-crypto stance, support for deregulation, and leadership in initiatives such as Token Alliance that advocate for crypto. His approach promises to establish a more collaborative regulatory framework that promotes innovation rather than stifles it.
"Operation Chokepoint 2.0" was a secret initiative aimed at restricting cryptocurrency startups from accessing the U.S. banking system, and its conclusion lays the groundwork for the revival of cryptocurrencies. By restoring the right to fairly use banking infrastructure, the U.S. is creating an environment where blockchain developers and entrepreneurs can thrive without excessive restrictions.
Regulatory clarity: Changes in the leadership of the U.S. Securities and Exchange Commission and balanced regulatory policies will reduce uncertainty for startups, creating a more predictable environment for innovation.
Access to capital and resources: With the elimination of banking barriers, cryptocurrency companies will find it easier to enter capital markets and traditional financial services, achieving sustainable growth.
Talent and entrepreneurship: A reduction in regulatory hostility is expected to attract top blockchain developers and entrepreneurs back to the U.S., thereby revitalizing the ecosystem.
Increased regulatory transparency and renewed support for innovation will also lead to a significant increase in token issuance within the U.S. Startups will be able to issue tokens as part of their fundraising and ecosystem building efforts without worrying about regulatory backlash. These tokens will include utility tokens for decentralized applications and governance tokens for protocols, attracting both domestic and foreign capital while encouraging participation in U.S. projects.
Conclusion
Looking ahead to 2025, it is clear that the crypto industry is entering a new era of growth and maturity. With Bitcoin solidifying its status as a global reserve asset, the rise of ETFs, and exponential growth in DeFi and stablecoins, the foundation for widespread adoption and mainstream attention is being laid.
With clearer regulations and breakthrough technologies supporting it, the crypto ecosystem is bound to break boundaries and shape the future of global finance. These forecasts highlight a year full of potential, as the industry continues to prove itself as an unstoppable force.
