Author: Zoltan Vardai; Translated by: Baishui, Golden Finance
The global cryptocurrency industry is expected to gain mainstream and institutional recognition again in 2025, thanks to increasing regulatory clarity and soaring cryptocurrency valuations.
Optimism among cryptocurrency investors is on the rise as the price of Bitcoin hit a new all-time high of $108,300 on December 17, more than a month after Donald Trump won the U.S. presidential election.
Industry experts say the cryptocurrency industry could be on track for another milestone year, including greater institutional adoption and a new high in the number of global cryptocurrency investors, as expectations grow for greater regulatory clarity under the new Trump administration.
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 (Markets in Crypto-Assets 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, which helped the country double the number of digital asset licenses issued annually in 2024.
Singapore has 1,600 blockchain patents, 2,433 industry-related job openings, and 81 cryptocurrency exchanges. These numbers are impressive for a country with a population of less than 6 million.
Chainalysis CEO Jonathan Levin stated that these global regulatory developments will pave the way for more retail and institutional investor adoption.
Levin stated, 'We can expect that next year, the adoption rates for both institutional and retail investors will increase, especially as these regulations bring greater transparency to the industry.'
He added that these new regulations will also enhance industry trust, market integrity, and consumer protection, 'making the industry more attractive to retail investors.'
Levin stated that regulatory transparency will lead to a historic high in the number of daily cryptocurrency users and stimulate the growth of institutional products such as exchange-traded funds (ETFs).
According to Triple-A's 2024 cryptocurrency ownership report, as of July 12, it is estimated that there are 560 million cryptocurrency holders, accounting for 6.8% of the global population.
There are 560 million cryptocurrency holders worldwide. 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 said during a panel discussion at NFT Fest 2024: 'This is where we see more adoption in various places and in payments.'
ETF and government BTC reserve plans will drive institutional adoption
The US spot Bitcoin exchange-traded fund has led to greater 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 $200,000 peak for Bitcoin in 2025.
Chainalysis CEO Levin stated that this dynamic will pave the way for institutional acceptance of Bitcoin as an asset class:
This is likely to translate into sustained institutional interest, as well as efforts by financial institutions and cryptocurrency firms to build the infrastructure and resilience needed to support investor demand.
As an important milestone in Bitcoin's adoption, Bitcoin's position as a savings technology is increasingly rising in the US, 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
Fideum co-founder and CEO Anastasija Plotnikova stated that the Bitcoin reserve proposal is gaining strong support due to Donald Trump's victory in the 2024 presidential election and the Republican majority in the Senate.
Adam Back, co-founder and CEO of Blockstream, inventor of Hashcash, and one of the industry's most prominent cryptographers, stated that if the (Bitcoin bill) is accepted by US lawmakers, Bitcoin's price could eventually exceed $1 million.
Cryptocurrency adoption in low-income countries is expected to continue growing
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 the Chainalysis global index measuring the total value of global cryptocurrency activity rose to a new high of over 0.75 in the first quarter of 2024.
Global index measuring the global value of cryptocurrency activity. Source: Chainalysis
The report adds that while cryptocurrency adoption in 2023 was primarily driven by low- and middle-income countries, the peak in 2024 is attributed to increased crypto activity in countries across all income levels, with high-income countries experiencing a decrease in crypto activity in early 2024.
Levin pointed out that the increase in global activity is mainly due to the growing use cases of stablecoins in the real world and the debut of the US Bitcoin ETF:
There are many factors driving this trend, from the US launch of the Bitcoin ETF to stablecoins supporting low- and middle-income countries in real-world use cases, as well as significant increases in DeFi activity in sub-Saharan Africa, Latin America, and Eastern Europe.
2024 Global Cryptocurrency Adoption Index. Source: Chainalysis
Low- and middle-income countries 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, which has brought over $31 million in profits to the country in the first three years.
Despite making $31 million in profits, President Nayib Bukele's decision faced widespread criticism after Bitcoin fell from its historical high of $69,000 in November 2021 following the collapse of the FTX exchange. During the bear market, Bitcoin plummeted to $16,000, leading to a significant drop in 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 encourage other countries to adopt Bitcoin:
As more countries consider this path, we may see a gradual redefinition of 'safe' reserve assets. If Bitcoin becomes the primary currency of national reserves, it could fundamentally change the global financial landscape, driving more decentralized and digital approaches to economic stability.
BTC and Gold, 1-Year Chart. Source: Cointelegraph/TradingView
Bitcoin could even become the next reserve asset after gold. TradingView data shows that Bitcoin has risen by over 131% in the past year, while the price of gold has increased by about 30%.
Cryptocurrency investors remain optimistic about 2025, especially on January 6, two weeks before Donald Trump's inauguration on January 20, when Bitcoin reclaimed $100,000—seen as a potential catalyst for cryptocurrency prices due to clearer regulations.
Bitcoin's upward momentum in 2025 is expected to attract more investors to the cryptocurrency industry, with price predictions ranging from $160,000 to over $180,000.
