Original author: Matt Hougan & Ryan Rasmussen , Bitwise
Compiled by: Yuliya, PANews
2024 has been a landmark year for the cryptocurrency market. Bitcoin surged to a new all-time high of $103,992 (up 141.72% year-to-date as of writing), largely thanks to a record issuance of a U.S. 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 such as MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record prices aren’t the only noteworthy development. Cryptocurrencies have clearly gained the upper hand in the 2024 U.S. election, which has made the outlook for cryptocurrency regulation in the U.S. brighter. President-elect Trump supported cryptocurrencies during his campaign, promising to establish a strategic reserve of Bitcoin and reorganize the SEC (an agency that has historically been hostile to cryptocurrencies). He also nominated Scott Bessent to be Treasury Secretary, who has said that "cryptocurrencies represent freedom, and the crypto economy will exist for a long time." Congress has also clearly tilted in favor of cryptocurrencies heading into 2024, with pro-cryptocurrency candidates defeating opponents in several key elections. Expect to see pro-cryptocurrency legislation in the coming months.
Driven by global stimulus policies from China and other major central banks, growing institutional adoption, and rapid improvements in blockchain technology, the outlook for 2025 looks pretty bright.
TL;DR
01: Bitcoin, Ethereum, and Solana will hit all-time highs, with Bitcoin trading above $200,000.
02: Bitcoin ETF inflows in 2025 will exceed those in 2024.
03: Coinbase will surpass Charles Schwab to become the world's most valuable brokerage firm, and its stock price will exceed $700 per share.
04: 2025 will become the "first year of crypto IPO", and at least five crypto unicorn companies will be listed in the United States.
05: Tokens issued by AI agents will lead to a meme coin craze that is larger than that 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 the portfolio of (almost) every American investor.
08: The U.S. Department of Labor will relax its guidance on cryptocurrencies in 401(k) plans, allowing hundreds of billions of dollars to flow into crypto assets.
09: As the United States passes the long-awaited stablecoin legislation, the size of stablecoin assets 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.
Bonus prediction: Bitcoin will surpass the $18 trillion gold market and trade at over $1 million per coin by 2029
Prediction 1: Bitcoin, Ethereum, and Solana will hit new all-time highs, and Bitcoin will surpass $200,000
The cryptocurrency trio - Bitcoin, Ethereum and Solana - outperformed all major asset classes in 2024, rising 141.72%, 75.77% and 127.71% respectively. In comparison, the S&P 500 rose 28.07%, gold rose 27.65% and bonds rose 3.40%.
This momentum is expected to continue until 2025, with Bitcoin, Ethereum, and Solana all hitting new all-time highs. The specific target prices are as follows:
Bitcoin: $200,000
Record ETF inflows push Bitcoin to new highs in 2024
This trend is expected to continue
Halving in April 2024 will reduce new supply
New buying demand from businesses and governments
If the US government follows through on its proposal to create a 1 million Bitcoin strategic reserve, the price could reach $500,000 or more
Ethereum: $7,000
Despite a 75.77% gain in 2024, Ethereum’s popularity among investors has declined
Expect a shift in the narrative by 2025
Drivers include:
Layer 2 blockchains such as Base and Starknet are seeing an acceleration in activity
Spot Ethereum ETFs Will Attract Billions of Dollars
Massive growth of stablecoins and tokenized projects on Ethereum
Solana: $750
Strong recovery in 2024 driven by Meme coin craze
Momentum expected to continue to build
The catalyst in 2025 will be the migration of “serious” projects to the web
There are early cases, such as the migration of the Render project
This trend is expected to accelerate in the coming year
Catalyst
Institutional investment increased
Companies continue to buy
Investment bank approves cryptocurrency business
US Strategic Bitcoin Reserve Plan
Better regulatory and political environment
Bitcoin halving tightens supply
Layer-2 Scaling Solutions
Macro positives (rate cuts, China stimulus)
Configuration ratio increased (3% becomes the new 1% standard)
Potential downsides
Washington's policies are disappointing
Risk of margin call
Government sell-off
Meme coin craze fails
Interest rate cuts less than expected
Prediction 2: Bitcoin ETF inflows in 2025 will exceed 2024
When the US spot Bitcoin ETF was launched in January 2024, ETF experts predicted that the product group would attract inflows of $5 billion to $15 billion in the first year. In fact, the upper end of the expected range was exceeded within the first six months. Since its launch, these record-breaking ETFs have attracted inflows of $33.6 billion. Inflows are expected to exceed this figure in 2025. Three reasons support this prediction:
1. The first year is usually the slowest for an ETF
The best historical analogy for Bitcoin ETFs is the launch of gold ETFs in 2004
Gold ETFs attracted an inflow of $2.6 billion that year, which is exciting
But here are the results from the following years (figures 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 point is: it is in line with the development law of gold ETFs that the inflows in the second year exceed those in the first year. It is unusual that the inflows decrease.
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 products are currently largely inaccessible to these financial managers
This is expected to change by 2025
Trillions of dollars managed by these firms will start flowing into Bitcoin ETFs
3. Investors are gradually increasing their allocations - 1% to 3% is becoming a 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 a small allocation and then gradually increase it over time.
Investors who bought Bitcoin ETFs in 2024 are expected to double their investments in 2025
Prediction 3: Coinbase will surpass Charles Schwab to become the world’s most valuable brokerage firm and its stock price will surpass $700 per share
At the beginning of 2023, investors could buy Coinbase shares for $35. Today, the stock price is $344, a nearly 10-fold increase. Forecasts show that this price could continue to rise, and the increase could be significant.
Prediction: Coinbase stock will surpass $700 (more than double its current price) by 2025. This would make Coinbase the most valuable brokerage firm in the world, surpassing Charles Schwab.
Here’s why: Coinbase is more than just a brokerage firm.
There are three main catalysts driving its development:
1. Stable currency business
Coinbase’s stablecoin business is booming thanks to its deal with USDC issuer Circle
Year-to-date, stablecoin revenue grew by $162 million (+31%)
If the trajectory of stablecoins meets expectations, this trend will continue
2.Base network
Last year, Coinbase launched its new Layer 2 network, Base, based on Ethereum.
Currently ranks first among L2 networks in terms of transaction volume and total locked value
With growth comes significant revenue
Base now generates tens of millions of dollars in revenue per quarter
This revenue is expected to grow as more developers, users, and capital enter the ecosystem.
3. Pledge and Custody Services
Through the third quarter, the two businesses generated $589 million in revenue
An increase of US$304 million (+106%) compared to the same period last year
Both businesses were driven by asset balances and net new asset inflows
Both indicators are expected to increase significantly by 2025
These business lines are expected to exceed $1 billion in annual revenue
Prediction 4: 2025 will be the "first year of cryptocurrency IPOs", and at least five crypto unicorns will be listed in the United States
IPOs in the cryptocurrency space have been relatively quiet over the past few years, but 2025 is expected to usher in a boom in crypto unicorn IPOs.
Why now?
The background of current listed cryptocurrency companies is significantly different from previous years:
Cryptocurrency prices rise
Growing investor demand
Institutional adoption surges
Blockchain technology has gone mainstream
Favorable macro environment
Most importantly, the political environment has warmed
These factors together create favorable conditions for industry giants to go public.
Five potential IPO candidates for 2025:
1. Circle
Issuer of USDC (one of the largest stablecoins)
Actively preparing for listing
Strong position in the stablecoin market
Expanding into new financial services
2. Figure
Well-known for providing various financial services using blockchain technology
Providing mortgage loans, personal loans and asset tokenization services
Exploring IPO possibilities since 2023
As Wall Street’s attention to tokenization grows, the time may be ripe
3. Kraken
One of the largest cryptocurrency exchanges in the United States
Considering IPO since 2021
Plan postponed due to market conditions
Development momentum may be regained in 2025
4. Anchorage Digital
Providing digital asset infrastructure services
Diverse client base, including investment advisors, asset managers and venture capital firms
Federally chartered bank
Comprehensive crypto services could prompt it to seek an IPO
5. Chainalysis
Market leader in blockchain compliance and intelligence services
Unique service offering
Good growth trajectory
As the crypto industry pays more attention to compliance requirements, it is very likely to enter the public market
Prediction 5: Tokens issued by AI agents will lead to a larger meme coin boom than in 2024
It is expected that there will be a larger Meme coin craze in 2025 than in 2024, and tokens issued by AI agents will be the leaders of this craze.
GOAT Case Study: The First Collision of AI and Meme Coin
A striking example comes from the interaction between Marc Andreessen of a16z and the autonomous chatbot Truth Terminal. The AI agent promoted a niche meme coin called GOAT. This project, which started as an experimental project, eventually had a market value of over $1.3 billion, fully demonstrating the huge potential of combining AI with meme coins.
Clanker: A groundbreaking AI token issuance platform
Clanker is an innovative platform that enables autonomous token deployment on Coinbase’s Layer 2 scaling solution Base.
Users only need to tag Clanker on Farcaster and provide the token name and image, and the AI agent will automatically complete the token deployment.
In just one month after going live, 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 round of Meme coin craze in 2025. Although these tokens may lack practical application value and most may eventually return to zero, they represent the fusion of two breakthrough technologies, AI and cryptocurrency, and this innovative development direction will continue to attract market attention.
Prediction 6: The number of countries holding Bitcoin will double
Outlook for the U.S. Strategic Reserve
There is still uncertainty as to whether the United States will establish a strategic reserve of Bitcoin in 2025. Although there are positive signals:
Wyoming Republican Senator Cynthia Lummis introduces bill to buy 1 million Bitcoins in five years
President-elect Trump supports the proposal
But according to Polymarket's forecast, this probability is less than 30%.
Global competition
The United States's move to consider establishing a strategic reserve of Bitcoin has already triggered a chain reaction around the world:
Lawmakers from Poland to Brazil are proposing bills to create their own strategic Bitcoin reserves
Governments are accelerating their deployment to avoid missing out on opportunities
Current Status and Future Outlook
According to BitcoinTreasuries.net:
Nine countries around the world currently hold Bitcoin, with the United States leading the way
This number is expected to double by 2025
Prediction 7: Coinbase will enter the S&P 500, MicroStrategy will enter the Nasdaq 100
Coinbase and MicroStrategy, two major public companies in the cryptocurrency space, will be included in mainstream stock indexes, meaning that almost all U.S. investor portfolios will gain exposure to the cryptocurrency sector.
Market Status
The average U.S. investor currently has no exposure to cryptocurrencies
Cryptocurrency is an emerging asset class that many investors either do not understand or actively choose to avoid.
But almost every investor owns a fund that tracks the S&P 500 or the Nasdaq 100
Many investors hold both types of index funds
Potential impact
Once these two companies are included in the index, it will have a huge market impact:
About $10 trillion in assets directly track the S&P 500
Another $6 trillion in assets are benchmarked to the index
Expected inflows after Coinbase inclusion:
Index funds need to buy about $15 billion in stocks
Benchmark funds could bring in an additional $9 billion in buying demand
MicroStrategy will have a significant impact, although it will be less affected due to the smaller size of the Nasdaq 100's tracking funds.
Prediction 8: The U.S. Department of Labor will relax its guidance on cryptocurrency restrictions in 401(k) plans
In March 2022, the U.S. Department of Labor issued guidance warning 401(k) plan trustees of the significant risks of cryptocurrency investment options and announced that it would launch an investigation project to protect plan participants from these risks.
With the arrival of a new administration in Washington, the Department of Labor is expected to relax this strict guidance. The importance of this policy change can be seen in the data:
U.S. 401(k) plans currently manage $8 trillion in assets
These funds continue to receive new weekly inflows of capital
If the allocation ratio of cryptocurrency reaches:
1%: Will bring $80 billion in new funds to the cryptocurrency sector
3%: $240 billion in new funding
Prediction 9: Stablecoin assets will double to $400 billion, and the United States will pass long-awaited stablecoin legislation
The stablecoin market will boom in 2025, with a market capitalization of $400 billion or more. This growth will be driven by the following key factors:
Stablecoin legislation
The lowest hanging fruit for pro-crypto policymakers in Washington is passing comprehensive stablecoin legislation. This would answer important questions, including who regulates and what the appropriate reserve requirements are. Clear regulations would spark huge interest from issuers, consumers, and businesses. Large traditional banks such as JPMorgan Chase are expected to enter the space.
Fintech Integration
Stripe acquired the stablecoin platform Bridge for $1.1 billion, saying that stablecoins have become "superconductors of financial services" with their speed, accessibility and low cost. PayPal will launch its own stablecoin (PYUSD) in 2023, and Robinhood recently announced plans to work with several cryptocurrency companies to launch a global stablecoin network. As stablecoins are integrated into popular fintech applications, the scale of stablecoin managed assets and transaction volume will grow significantly.
Global Trade and Remittances
Stablecoin transactions will reach $8.3 trillion in 2024, close to Visa's $9.9 trillion in payments during the same period. Stablecoin giant Tether recently financed a $45 million oil transaction with its USDT stablecoin. As digital dollars continue to disrupt these massive markets, demand for stablecoins will continue to grow.
Bull Market Growth
As the most obvious catalyst, the overall expansion of the cryptocurrency market will drive the growth of stablecoin assets under management. The cryptocurrency market is bullish in 2025, and the stablecoin market will also grow with it.
Prediction 10: As Wall Street accelerates its entry, the scale of RWA tokenization will exceed US$50 billion
Three years ago, the cryptocurrency industry tokenized less than $2 billion in real-world assets (RWAs), including private credit, U.S. debt, commodities, and stocks. Today, the market has reached $13.7 billion.
Tokenization has seen such phenomenal growth primarily due to its clear advantages: it offers instant settlement, significantly lower costs than traditional securitization, and 24/7 liquidity, while bringing transparency and accessibility to nearly all asset classes.
BlackRock CEO Larry Fink has transformed from a former Bitcoin skeptic to a staunch supporter of tokenization. He said that "security tokenization will become the next generation of the market." These words from the head of the world's largest asset management company are of great significance.
Wall Street is only beginning to realize this, which means that a large amount of institutional money may soon pour into the tokenized RWA space.
The tokenized RWA market is expected to reach $50 billion by 2025 and has the potential to grow exponentially from there.
Venture capital firm ParaFi recently predicted that the tokenized RWA market could grow to $2 trillion by 2030, while the Global Financial Markets Association predicts it could reach $16 trillion.
Additional prediction: Bitcoin will surpass the $18 trillion gold market in 2029, with a unit price exceeding $1 million
While people tend to make one-year predictions, the longer-term outlook for Bitcoin is even more impressive.
It is expected that the market value of Bitcoin will surpass the gold market by 2029. Based on the current market value of gold, this means that the price of each Bitcoin will exceed $1 million.
There is a reason for the choice of 2029: Bitcoin has historically operated in four-year cycles. While this pattern may not necessarily continue, 2029 will mark the apex of the next cycle (and Bitcoin’s 20th anniversary). To outperform the gold market within 20 years of its launch is undoubtedly a major achievement, but Bitcoin is on track to achieve this goal.
It is worth noting that if the United States announces the purchase of 1 million bitcoins to build a strategic reserve, the time for the bitcoin price to break through $1 million may be greatly advanced.
