Author: Matt Hougan, Chief Investment Officer at Bitwise; Translated by: 0xjs@Golden Finance
Every year, the Bitwise team gathers to make annual predictions about the future of cryptocurrency. This process involves a dozen team members engaging in hours of discussion, debate, and reflection. It's one of the most exciting things we do each year.
We will release our 2025 predictions on December 10. Hint: We think 2025 will be crazy. But it’s worth reviewing how 2024 performed before we make predictions for next year.
Setting the context: A look back at December 2023
First, let's set the scene.
We released our predictions for 2024 on December 12, 2023. At that time, cryptocurrency was in a very different position. Bitcoin's trading price was $43,750, and anti-cryptocurrency rhetoric in Washington D.C. was very intense. 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.' and then said, 'If I were the government, I would shut it down.'
The progress made in 2024 is astounding. Bitcoin is currently trading close to $100,000, and pro-cryptocurrency politicians dominate in Washington, while Wall Street companies are keenly developing in this space. But none of this was obvious when we set our annual predictions in December 2023.
Let's see how we did.
2024 Prediction 1: Bitcoin's trading price will exceed $80,000, setting a new all-time high.
Result: Correct
Our prediction is accurate. Bitcoin surpassed $80,000 in November and continued to rise, currently trading close to $100,000. Our argument at the time—that the approval of the spot Bitcoin ETF and Bitcoin halving would jointly drive up the price—was completely correct.
We will announce our price targets for 2025 next week and increase the price targets for Ethereum and Solana. Stay tuned.
Prediction 2: The spot Bitcoin ETF will be approved and will become the most successful ETF launch ever.
Result: Correct
This is also a win. The spot Bitcoin ETF approved in January 2024 has become the most successful ETF launch to date. As of December 1, 2024, the Bitcoin ETF has attracted $31 billion in inflows. The previous record for 'the most successful ETF launch ever' was held by Invesco QQQ Trust (QQQ), which was listed in 1999 and attracted $5 billion in assets in its first year. Gold ETFs attracted less than $2 billion in their first year. The inflow into the Bitcoin ETF is multiples of that figure and continues to grow.
Prediction 3: Coinbase's revenue will double, exceeding Wall Street's expectations (profit) by at least 10 times.
Result: Correct
This will be a close contest. Coinbase's revenue in 2023 was $3.1 billion, with $4.1 billion in the first three quarters of 2024. Will 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 in stablecoins will exceed those settled using Visa.
Result: Incorrect
In the first six months of 2024, the global amount settled in stablecoins reached $5.1 trillion, a significant increase compared to the same period last year. However, they have yet to catch up with Visa, which settled $6.5 trillion during the same period. Close, but not quite a win.
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 has angrily called for Washington to 'shut down' cryptocurrency) tokenize its own fund.
We are very close to success! Tokenization of funds on Wall Street is a major theme for 2024. Firms like BlackRock, Franklin Templeton, Guggenheim, UBS, and Societe Generale are taking steps in this direction. JPMorgan has invested heavily in tokenization, reshaping its own tokenization platform and calling it '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, reaching $5 billion.
Result: Incorrect
What we said before was quite outrageous. In 2024, activity in Ethereum-based applications surged significantly, but revenue by the end of the year may fall slightly below last year's $2 billion. Why? The '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
That did not happen, but it remains a space to watch in 2025. Reports indicate that Tyler has been concerned about whether NFTs are securities. If we gain clearer regulation around NFTs in the next year, that question might be readdressed.
Prediction 8: AI assistants will use cryptocurrency for online payments and confirm 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 named Truth Terminal. The robot ultimately helped promote a meme coin—Goatseus Maximus (GOAT)—which is currently valued at $674 million. We suspect that AI robots will widely use cryptocurrency and stablecoins in the coming years. While the GOAT experiment was crazy, it provided 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
Of all our predictions, this is the one I am most proud of.
By December 2023, few people 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 U.S. elections approach. Wow, we were right: the total amount wagered on the platform surged from $8 million when we predicted to peak levels of over $500 million. Polymarket became a household name in the process. It also proved its special foresight in the 2024 elections.
In our 2025 forecast article, we will predict the next breakthrough cryptocurrency application.
Prediction 10: A major upgrade to the Ethereum blockchain will lower 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 decreased by over 90% year-on-year, currently hovering between $0.01 and $0.02. But this summer it fell below $0.01, and I believe we will reach that level again soon as underlying technology continues to improve. Transactions on major blockchains costing less than a cent will change the world.
Additional prediction: By the end of 2024, a quarter of financial advisors will allocate cryptocurrency in client accounts.
Result: To be determined
Every year, we survey financial advisors to understand how many hold cryptocurrency in client accounts. In 2023, only 11% said 'yes.' The survey at the end of 2024 is still ongoing, so we don't yet know if it will reach the 25% level. One potential headwind is that major banks like Wells Fargo, UBS, and Merrill have yet to approve a spot Bitcoin ETF. But we believe it's just a matter of time, not if.
Conclusion
So how did we do? Six correct, four incorrect, and one pending. Given how aggressive our predictions were—Bitcoin prices doubling, prediction markets soaring, Ethereum fees dropping by 99%, all happening in a rapidly changing space—we'll take it.
But what's certain is: our accuracy will be higher in 2025. Stay tuned.
