Author: Matt Hougan, Chief Investment Officer at Bitwise; Ryan Rasmussen, Head of Research at Bitwise; Translated by: 0xjs@Jinse Finance
2024 was a landmark year for cryptocurrencies.
Cryptocurrency prices soared to new all-time highs, the first-ever spot Bitcoin ETF had the most successful launch in history, and pro-crypto politicians triumphed in Washington.
But we see an even brighter future: 2025 will usher in the golden age of cryptocurrencies. Here are our 10 predictions for 2025.
Prediction 1: BTC, ETH, and Solana will hit new all-time highs, with BTC reaching over $200,000.
Prediction 2: Bitcoin ETFs will attract more inflows in 2025 than in 2024.
Prediction 3: Coinbase will surpass Fidelity to become the world's largest brokerage firm by market cap, with its stock price exceeding $700 per share.
Prediction 4: 2025 will be the "Year of the Crypto IPO," with at least five crypto unicorns going public in the US.
Prediction 5: Tokens launched by AI agents will spark an even more frenetic meme coin craze than 2024.
Prediction 6: The number of countries holding Bitcoin will double.
Prediction 7: Coinbase will be added to the S&P 500, and MicroStrategy will join the Nasdaq 100, bringing crypto exposure to nearly every American investor's portfolio.
Prediction 8: The US Department of Labor will relax restrictions on crypto in 401(k) plans, unlocking billions in inflows to crypto assets.
Prediction 9: With the long-awaited US stablecoin legislation, stablecoin assets will double to $400 billion.
Prediction 10: As Wall Street embraces crypto, the value of tokenized real-world assets (RWAs) will exceed $50 billion.
Bonus Prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with each BTC worth over $1 million.
Introduction
2024 was a landmark year for cryptocurrencies. Bitcoin soared to a new all-time high of $103,992 (as of the time of writing, up 141.72% year-to-date), fueled by the record-breaking launch of a US Bitcoin spot ETF, which amassed $33.6 billion in assets. Other major crypto assets also saw massive gains: Solana was up 127.71% for the year, XRP surged 285.23%, and Ethereum climbed 75.77%. Meanwhile, crypto stocks like MicroStrategy and Coinbase skyrocketed 525.39% and 97.57%, respectively.
Record-breaking prices were not the only notable development. Crypto also broke through in the 2024 US elections, brightening the regulatory outlook for US crypto. President-elect Trump supported crypto on the campaign trail, vowing to establish a strategic Bitcoin reserve and reorganize the historically crypto-hostile SEC. He also nominated Scott Bessent as Treasury Secretary, who has stated that "crypto is about freedom, and the crypto economy is here to stay." Going into 2024, Congress was heavily pro-crypto, with pro-crypto candidates defeating crypto skeptics in several key races. We expect crypto-friendly legislation to be enacted in the coming months.
Add in the imminent global stimulus measures from China and other major central banks, rising institutional adoption, and rapid blockchain technology improvements, and the outlook for 2025 looks quite bright.
We recently convened the Bitwise brain trust to envision 2025. Our view is: we are entering the golden age of crypto. What do we specifically expect in 2025? Over the next few pages, we lay out our key predictions for the year ahead.
Please note: As with all predictions, these are not guarantees, but our best-informed estimates. The future is complex and conditional, and whether these predictions fully materialize as described will depend on many intricate factors. The following content does not constitute investment advice.
Prediction 1: BTC, ETH, and Solana will hit new all-time highs, with BTC reaching over $200,000
The crypto big three - BTC, ETH, and Solana - outperformed all major asset classes in 2024, rising 141.72%, 75.77%, and 127.71%, respectively. Meanwhile, the S&P 500 returned 28.07%, gold returned 27.65%, and bonds returned 3.40%. We expect this momentum to continue into 2025, with BTC, ETH, and Solana all reaching new all-time highs. Our price targets for each asset are as follows:
BTC: $200,000. The record-breaking inflows into Bitcoin ETFs in 2024 propelled Bitcoin to new highs. We don't see this demand slowing anytime soon (see Prediction 2). Combine that demand with the 2024 halving reducing new supply, plus new corporate and government purchases... well, we've seen this movie before. (Note: If the US government implements its proposed 1 million BTC strategic reserve, $200,000 becomes $500,000 or higher.)
ETH: $7,000. While Ethereum surged 75.77% in 2024, the second-largest crypto asset lost favor with many investors, who either turned their attention to Bitcoin or to the fast-growing, Ethereum-competing programmable blockchains. But as Warren Buffett says, "Be fearful when others are greedy, and greedy when others are fearful." We expect a narrative shift for Ethereum in 2025 as activity accelerates on Layer 2s like Base and Starknet, and Ethereum spot ETFs attract billions in inflows. Another catalyst? The massive growth of stablecoins and tokenization projects built on Ethereum.
Solana: $750. The crypto phoenix, rising from the ashes of the 2022 market crash to new heights in 2024, driven by a meme coin frenzy that made the GameStop saga look tame. We believe Solana's momentum is just getting started. The 2025 catalyst will be "serious" projects migrating to the network to complement its meme coin dominance. We've already seen early examples like Render. We expect this to accelerate in the coming year.
Catalysts:
Institutional investment
Corporate purchases
Major broker approvals
US strategic Bitcoin reserve
Improved regulation/political environment
Bitcoin halving reducing supply
Layer 2 scaling
Macro windfalls (rate cuts, China stimulus)
Increased allocations (3% is the new 1%)
Potential Headwinds:
Disappointment from Washington
Leveraged blowups
Government selling
Meme coin mania failure
Disappointing rate cuts
Prediction 2: Bitcoin ETFs will attract more inflows in 2025 than in 2024
When the US Bitcoin spot ETFs launched in January 2024, ETF experts predicted the group would see $5-15 billion in inflows in the first year. They exceeded the high end of that range in the first six months. Since launch, the record-breaking ETFs have attracted $33.6 billion in inflows. We expect 2025 inflows to exceed this figure.
How is this possible? Three reasons:
The first year is usually the slowest for ETFs: The best historical analogue for the Bitcoin ETF launch is the launch of gold ETFs in 2004. That year, they got off to a strong start with $2.6 billion in inflows. But look at what happened in the following years: $5.5 billion in year two, $7.6 billion in year three, $8.7 billion in year four, $16.8 billion in year five, and $28.9 billion in year six (inflation-adjusted data). The key is: year two inflows exceeding year one is the norm, not the exception, for gold. It would be unusual for inflows to taper off.
Major brokers are coming online: For Bitcoin ETFs, the world's largest brokerages - from Morgan Stanley and Merrill Lynch to Bank of America and Fidelity - have yet to unleash their wealth management armies, largely barred from accessing these products. We believe this will change in 2025, and the trillions of dollars they manage will start flowing into Bitcoin ETFs.
Here is the English translation of the text, with the specified terms translated as instructed:Investors are gradually increasing their allocations - 3% is the new 1%: In the seven years that Bitwise has helped investment professionals enter the cryptocurrency space, we have observed a clear pattern: most investors start with a small allocation and then gradually increase it over time. We suspect that most investors who buy a Bitcoin ETF in 2024 will double down in 2025.
Prediction 3: Coinbase will surpass Charles Schwab to become the world's most valuable brokerage, with its stock price exceeding $700 per share
As we enter 2023, investors can buy Coinbase stock at $35. Today, it trades at $344, a nearly 10-fold increase. We believe it can go much higher.
Our prediction: Coinbase stock will trade above $700 per share by 2025 (more than double today's price). This will make Coinbase the world's most valuable brokerage, surpassing Charles Schwab.
Why? Coinbase is not just a brokerage. There are three main catalysts that will help it achieve this goal:
Stablecoins: Thanks to its partnership with USDC issuer Circle, Coinbase's stablecoin business is thriving. So far this year, stablecoin revenue has grown by $162 million (31% growth). If we're right about the trajectory of stablecoins, this trend should continue.
Base: Last year, Coinbase launched Base, a new L2 network built on Ethereum. It is now a top L2 in terms of both trading and total locked value. With growth comes revenue - lots of revenue. Base is now generating tens of millions of dollars in revenue per quarter, and we expect this number to grow as more developers, users, and capital flow into the ecosystem.
Staking and custody services: As of Q3, these two businesses generated $589 million in revenue. That's an increase of $304 million (106%) compared to the same period last year. Both of these businesses are driven by asset balances and net new asset inflows. We expect both to grow significantly by 2025, driving these business lines to over $1 billion in annual revenue.
Prediction 4: 2025 will be the "Year of Crypto IPOs", with at least five crypto unicorn companies going public in the US
The crypto IPO space has been quiet in recent years. But we expect a wave of crypto unicorn companies to go public in 2025.
Why now? The backdrop for publicly traded crypto companies is very different from a few years ago. Crypto prices are up, investor demand is growing, institutional adoption is soaring, blockchain technology has gone mainstream, the macro environment is favorable, and - perhaps most importantly - the political environment has warmed up. This has created the conditions for many of the industry's larger players to go public.
Here are five potential IPO candidates for 2025:
Circle: As the issuer of one of the largest stablecoins, USDC, Circle has been actively preparing for a public debut for some time. Circle's strong position in the stablecoin market and its expansion into new financial services may prompt an IPO.
Figure: Figure is known for using blockchain technology to provide various financial services like mortgage lending, personal loans, and asset tokenization. The company has reportedly been exploring an IPO since 2023, and with Wall Street's growing obsession with tokenization, now may be the right time.
Kraken: As one of the largest crypto exchanges in the US, Kraken has been considering an IPO at least since 2021. Due to market conditions, the company's plans were delayed, but they may regain momentum in 2025.
Anchorage Digital: Anchorage provides infrastructure services for digital assets, with a diversified client base including investment advisors, asset managers, and venture capitalists. Its status as a federally chartered bank and its comprehensive crypto services may prompt it to go public.
Chainalysis: Chainalysis, as a leader in the blockchain compliance and intelligence services market, makes it a prime candidate to enter the public markets in 2025. The company's unique products and growth trajectory could make it a likely IPO candidate, especially given the increasing importance of compliance in the crypto industry.
Prediction 5: Tokens launched by AI agents will lead an even bigger Memecoin frenzy than 2024
As we enter 2025, it looks like we're in for an even bigger Meme coin frenzy than 2024. We believe tokens launched by AI agents will lead the charge.
For example, a16z's Marc Andreessen's recent interaction with an autonomous chatbot called Truth Terminal led to the AI agent promoting an obscure Meme coin called GOAT. Starting as a quirky experiment, it quickly became a $1.3 billion asset, showing the massive potential when you combine AI with the wild world of Meme coins.
But our most exciting breakthrough is Clanker, an AI agent designed to autonomously deploy tokens on Coinbase's Layer 2 scaling solution, Base. Users simply need to tag Clanker in a Farcaster post, telling the AI agent to launch a token with a given name and image, and it will automatically deploy the token.
In under a month, Clanker has already launched over 11,000 tokens (generating over $10.3 million in fees). We believe AI-launched tokens will drive a new Meme coin frenzy in 2025.
Will these Meme coins have actual utility? Unlikely. Will most of them go to zero? Yes. But they represent an interesting collision of two transformative technologies - AI and cryptocurrencies - that are worth watching.
Prediction 6: The number of countries holding Bitcoin will double
We don't know if the US will establish a strategic Bitcoin reserve in 2025. It's certainly possible. Senator Cynthia Lummis has introduced a bill to require the US to purchase 1 million Bitcoins within five years, and former President Trump has also endorsed the idea. But Polymarket puts the odds at less than 30%, and who are we to defy the oracle's prophecy?
However, our view is that it doesn't matter. The mere fact that the US is actively considering establishing a strategic Bitcoin reserve will trigger a global race, with governments around the world rushing to buy Bitcoin before it's too late. You've already seen lawmakers in places from Poland to Brazil proposing bills to establish strategic Bitcoin reserves in their respective countries.
According to BitcoinTreasuries.net, there are currently nine countries holding Bitcoin (led by the US). We expect this number to double by 2025.
Prediction 7: Coinbase will enter the S&P 500 index, and MicroStrategy will enter the Nasdaq 100 index, adding crypto exposure to almost every American investor's portfolio
The average American investor has no crypto exposure. Cryptocurrencies are a new asset class that many investors either don't understand or simply choose not to allocate to. But almost every investor holds funds tracking the S&P 500 or Nasdaq 100 indices. Many hold exposure to both of these index baskets.
However, so far, these indices have excluded the largest publicly traded crypto company, Coinbase, and MicroStrategy. We expect this to change as early as this month, during the next major rebalancing of these two indices. This could have a significant impact.
Consider this: $10 trillion in assets directly track the S&P 500, and another $6 trillion is "benchmarked" to it. If Coinbase enters the index, we expect funds to have to buy around $15 billion of the stock. If index-benchmarked funds add Coinbase, that's another $9 billion in purchases.
Given the relative scale of funds tracking the Nasdaq 100 index, the expected impact of MicroStrategy is smaller but still significant.
Here is the English translation:
Prediction 8: The US Department of Labor will relax its guidance on cryptocurrencies in 401(k) plans, allowing billions of dollars to flow into crypto assets
In March 2022, the US Department of Labor issued guidance "warning 401(k) plan fiduciaries of significant risks in adding cryptocurrency investment options to their plans". The Labor Department even said it would "conduct an investigative plan to protect plan participants from these risks".
US 401(k) plans hold $8 trillion in assets. More funds flow into these funds every week. If cryptocurrencies account for 1% of 401(k) assets, that's $80 billion in new capital entering the space, with steady inflows thereafter. A 3% allocation would be $240 billion.
This is a big deal. With the new pro-crypto government in Washington, we expect the Labor Department to soften this guidance.
Why should you care? At least $80 billion is one reason.
Prediction 9: With the long-awaited stablecoin legislation in the US, stablecoin assets will double to $400 billion
The 2025 stablecoin boom will drive stablecoin market cap to $400 billion or higher. Four catalysts will drive the growth:
Stablecoin Legislation: The new pro-crypto policy regime in Washington is most likely to achieve is the passage of comprehensive stablecoin legislation. Clear answers to big questions (who will regulate them? what are the proper reserve requirements?) will unleash huge new interest from issuers, consumers, and businesses. When this happens, some big traditional banks like JPMorgan are expected to enter the space.
Fintech Integration: Payment giants like Stripe spent $1.1 billion in October to acquire stablecoin platform Ramp, calling stablecoins the "superconductor of financial services" due to their speed, accessibility, and low cost. PayPal is launching its own stablecoin (PYUSD) in 2023, and Robinhood recently announced plans to partner with crypto firms to launch a global stablecoin network. As stablecoins permeate popular fintech apps, we expect stablecoin AUM and transaction volumes to soar.
Global Trade and Remittances: Stablecoins are already eroding global payments and remittance markets. The $8.3 trillion in stablecoin transactions we see in 2024 is just slightly below Visa's $9.9 trillion in payments that year. Additionally, stablecoin giant Tether recently facilitated a $45 million oil trade using its USDT stablecoin, clearly demonstrating stablecoins' potential to facilitate large-scale global trade. As the digital dollar continues to disrupt these massive markets, demand for stablecoins will grow.
Bull Market Growth: Finally, the most obvious catalyst - "bull market". When the crypto economy expands, stablecoin AUM tends to grow. We're bullish on crypto for 2025, so we're bullish on stablecoins too.
Prediction 10: As Wall Street's embrace of cryptocurrencies increases, the value of tokenized real-world assets (RWAs) will exceed $50 billion
Three years ago, the crypto industry's "tokenization" of real-world assets (like private credit, US debt, commodities, and equities) was less than $2 billion. Today, this market is $13.7 billion in size. What explains this massive growth? Why tokenize real-world assets - i.e. represent real-world assets on the blockchain?
Simply put: tokenization is better. It provides instant settlement, costs far less than traditional securitization, and has 24/7 liquidity - while bringing transparency and accessibility to nearly every asset class.
That's why BlackRock CEO Larry Fink, once a Bitcoin skeptic, has become a tokenization maximalist, saying "the next generation of the market will be the tokenization of securities". Notably: these words come from the leader of the world's largest asset manager.
We agree. In our view, Wall Street is just starting to realize this, meaning a flood of institutional capital could soon pour into tokenized real-world assets.
How much? We believe the tokenized real-world assets market will reach $50 billion by 2025 - and has the potential to grow exponentially from there.
We're clearly not alone in this view: VC firm ParaFi recently predicted the tokenized real-world assets market could grow to $2 trillion by the 2030s, while the Global Financial Markets Association forecasts $16 trillion.
Bonus Prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with each Bitcoin worth over $1 million
When making predictions, people tend to look just one year ahead. But why? As long-term crypto investors at Bitwise, let's look further out.
We believe Bitcoin will surpass the gold market by 2029. At gold's current market cap, that implies a Bitcoin price of over $1 million per coin.
Why 2029? Bitcoin has historically moved in four-year cycles. While this pattern may not hold, 2029 will mark the next cycle's peak (and Bitcoin's 20th anniversary). Surpassing gold in 20 years would be an incredible achievement, but we think Bitcoin can do it.
(Note: If the US announces the purchase of 1 million Bitcoins for strategic reserves, Bitcoin's price could reach $1 million per coin even faster.)
2024 Prediction Report Card
In November 2023, the Bitwise research team looked ahead and made 10 predictions (plus one bonus prediction) for 2024. We forecast Bitcoin would hit new highs, the first Bitcoin spot ETF would become the most successful ETF launch ever, and Polymarket's growth would soar. We're pleased to report: we weren't optimistic enough.
Here are the results of those predictions, detailed in "Bitwise: A Review of Our 2024 Crypto Market Predictions"
https://www.jinse.cn/blockchain/3704301.html
