By Zoltan Vardai
Compiled 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 rising as the price of Bitcoin hit an 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 record 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 Act (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 emerging as the next crypto hub with its “risk-adjusted” regulation that helps the country double the number of digital asset licenses issued annually by 2024.
Singapore has 1,600 blockchain patents, 2,433 industry-related jobs, and 81 cryptocurrency exchanges—staggering numbers for a country with a population of less than 6 million.
Jonathan Levin, CEO of Chainalysis, said these global regulatory developments will usher in greater adoption among retail and institutional investors.
“We can expect to see increased adoption from both institutional and retail investors next year, especially as these regulations bring greater transparency to the industry,” Levin said.
He added that the new regulations would also enhance industry trust, market integrity and consumer protection, “which will make the industry more attractive to retail investors.”
Levin said regulatory clarity would lead to record numbers of daily cryptocurrency users and spur growth in institutional products such as exchange-traded funds (ETFs).
According to Triple-A’s 2024 Crypto Ownership Report, as of July 12, there are an estimated 560 million cryptocurrency holders, representing 6.8% of the world’s population.
There are 560 million cryptocurrency holders around the world. Source: triple-a
Pavlo Denysiuk, CEO of crypto payments company Lunu, said the number of cryptocurrency holders could triple in the next two years based on current user growth.
“That’s where we’re going to get more adoption everywhere and in terms of payments,” Denysiuk said during a panel discussion at NFT Fest 2024.
ETFs and government BTC reserve programs will drive institutional adoption
U.S. spot Bitcoin exchange-traded funds have already led to greater institutional adoption by making BTC investing more accessible to traditional financial institutions.
The Bitcoin ETF is approaching the $110 billion mark less than a year after its launch, supporting analysts’ predictions of a $200,000 peak for the Bitcoin cycle in 2025.
Chainalysis CEO Levin said this dynamic will pave the way for increasing institutional acceptance of Bitcoin as an asset class:
“This will likely translate into continued institutional interest and efforts by financial institutions and crypto businesses to build the infrastructure and resiliency needed to support investor demand.”
In a major sign of its popularity, Bitcoin’s status as a savings technology is growing in the United States, thanks to the Bitcoin Act, championed by Wyoming Senator Cynthia Lummis, which proposes the creation of a strategic Bitcoin reserve.
Lummis Bitcoin Act. Source: Lummis.senate.gov
Fideum co-founder and CEO Anastasija Plotnikova said the Bitcoin reserve proposal is gaining strong support due to U.S. President-elect Donald Trump's victory in the November 2024 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 renowned cryptographers, said that if the Bitcoin Act is accepted by U.S. lawmakers, the price of Bitcoin could eventually exceed $1 million.
Cryptocurrency adoption in low-income countries expected to continue to grow
According to Chainalysis’s October 2024 Geography of Cryptocurrency Report, cryptocurrency activity increases in 2024 and reaches a peak similar to the 2021 bull run high.
The Chainalysis Global Index, which measures the total value of global crypto activity, rose to a new high above 0.75 in the first quarter of 2024, the report said.
A global index measuring the global value of crypto activity. Source: Chainalysis
The report added that while cryptocurrency adoption in 2023 was driven primarily by low- and middle-income countries, the 2024 high was attributed to increased crypto activity in countries of all income levels, while high-income countries saw a decrease in crypto activity in early 2024.
Levin noted that the increase in global activity can be largely attributed to the growing real-world use cases for stablecoins and the debut of a Bitcoin ETF in the United States:
“There are a number of factors driving this trend, from the launch of a Bitcoin ETF in the U.S. to stablecoins supporting real-world use cases in low-income and lower-middle-income countries, and a significant increase in DeFi activity in Sub-Saharan Africa, Latin America, and Eastern Europe.”
Global Cryptocurrency Adoption Index 2024. Source: Chainalysis
Low- and middle-income countries such as India, Nigeria, and Indonesia led adoption, with India ranking first in the Chainalysis Global Crypto Adoption Index.
In Latin America, El Salvador adopted Bitcoin as legal tender on September 7, 2021, which brought the country more than $31 million in profits in the first three years.
Despite the $31 million profit, President Nayib Bukele’s decision was widely criticized after Bitcoin fell from its November 2021 all-time high of $69,000 following the collapse of the FTX exchange. Bitcoin holdings in El Salvador fell sharply after the currency dropped to $16,000 during the bear market.
Author and intergovernmental blockchain expert Anndy Lian said El Salvador’s decision to adopt Bitcoin is an important step in Bitcoin’s increasing integration into the global financial system.
Lian said similar government initiatives could boost Bitcoin adoption in other countries:
“As more countries consider this path, we may see a gradual redefinition of ‘safe’ reserve assets. If Bitcoin becomes the primary currency held as national reserves, it could fundamentally change the global financial landscape, driving a more decentralized and digital approach to economic stability.”
BTC and gold, 1-year chart. Source: Cointelegraph/TradingView
Bitcoin could even become the next reserve asset after gold. Over the past year, Bitcoin has risen more than 131%, while gold prices have risen about 30%, according to TradingView data.
Optimism among cryptocurrency investors for 2025 remains high, especially after Bitcoin recaptured $100,000 on January 6, two weeks before Donald Trump’s January 20 inauguration — which was seen as a potential catalyst for cryptocurrency prices due to greater regulatory clarity.
Bitcoin’s 2025 rally is expected to attract more investor attention to the cryptocurrency industry, with price predictions ranging from $160,000 to over $180,000.
