Author: Matt Hougan, Ryan Rasmussen, Bitwise
Compiled by: Yuliya, PANews
2024 was a landmark year for the cryptocurrency market. Bit rose to a historic high of $103,992 (as of the time of writing, up 141.72% year-to-date), largely due to the record-breaking launch of the U.S. spot Bit ETF, which attracted $33.56 billion in assets. Other major crypto assets also saw huge gains: Solana was up 127.71%, XRP was up 285.23%, and Ethereum was up 75.77%. At the same time, crypto-related stocks like MicroStrategy and Coinbase surged 525.39% and 97.57%, respectively.
Record-breaking prices were not the only notable development. Crypto clearly had the upper hand in the 2024 U.S. presidential election, brightening the prospects for crypto regulation in America. President-elect Trump, who supported crypto during the campaign, promised to establish a Bit strategic reserve and restructure the SEC (which has historically been hostile to crypto). He also nominated Scott Bessent as Treasury Secretary, who has stated that "crypto represents freedom, and the crypto economy is here to stay." Going into 2024, Congress also leaned heavily toward supporting crypto, with pro-crypto candidates defeating opponents in several key races. Supportive crypto legislation is expected in the coming months.
With global stimulus from China and other major central banks, growing institutional adoption, and rapid improvements in blockchain technology, the outlook for 2025 looks quite bright.
TL;DR
01: Bit, Ethereum, and Solana will hit new all-time highs, with Bit reaching over $200,000.
02: Bit ETF inflows in 2025 will exceed 2024.
03: Coinbase will surpass Schwab to become the world's most valuable brokerage, with its stock price breaking $700 per share.
04: 2025 will be the "Year of the Crypto IPO," with at least five crypto unicorns listing in the U.S.
05: AI-generated tokens will lead an even bigger meme coin frenzy than 2024.
06: The number of countries holding Bit will double.
07: Coinbase will enter the S&P 500, and MicroStrategy will enter the Nasdaq 100, adding crypto exposure to (almost) every American investor's portfolio.
08: The U.S. Department of Labor will relax its guidance on crypto in 401(k) plans, allowing trillions in assets to flow into crypto.
09: With the passage of long-awaited stablecoin legislation in the U.S., the stablecoin asset size will double to $400 billion.
10: As Wall Street embraces crypto, the value of real-world asset (RWA) tokenization will exceed $50 billion.
Bonus Prediction: By 2029, Bit will surpass the $18 trillion gold market, with a price exceeding $1 million per coin.
Prediction 1: Bit, Ethereum, and Solana Will Hit New All-Time Highs, with Bit Reaching Over $200,000
The crypto big three - Bit, 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 was up 28.07%, gold was up 27.65%, and bonds were up 3.40%.
This momentum is expected to continue into 2025, with Bit, Ethereum, and Solana all setting new all-time highs. The specific target prices are:
Bit: $200,000
Record ETF inflows drove Bit to new highs in 2024
This trend is expected to continue
The 2024 halving will reduce new supply
New buying demand from corporations and governments
If the U.S. government implements a proposed 1 million Bit strategic reserve, the price could reach $500,000 or higher
Ethereum: $7,000
Despite a 75.77% gain in 2024, Ethereum has seen waning investor attention
The narrative is expected to shift in 2025
Drivers include:
Accelerating activity on Layer 2 blockchains like Base and Starknet
A spot Ethereum ETF attracting billions in inflows
Massive growth of stablecoins and tokenization projects on Ethereum
Solana: $750
Strongly rebounded in 2024 on the meme coin frenzy
Momentum expected to continue strengthening
2025 catalyst will be "serious" projects migrating to the network
Early cases like the Render project's migration
This trend expected to accelerate over the next year
Catalysts
Increased institutional investment
Ongoing corporate buying
Investment banks approving crypto businesses
U.S. strategic Bit reserve plan
Improved regulation and political environment
Bit halving tightening supply
Layer-2 scaling solutions
Macro tailwinds (rate cuts, China stimulus)
Increased allocation (3% becoming the new 1% standard)
Potential Headwinds
Disappointing Washington policy
Leverage liquidation risks
Government selloffs
Meme coin frenzy failure
Rate cuts underperforming
Prediction 2: Bit ETF Inflows in 2025 Will Exceed 2024
When the U.S. spot Bit ETF launched in January 2024, ETF experts predicted the product suite would attract $5-15 billion in inflows in the first year. In reality, it exceeded the upper end of that range in the first six months alone. Since launch, these record-breaking ETFs have attracted $33.56 billion in inflows. Inflows in 2025 are expected to exceed this figure. Three supporting reasons for this prediction:
1. The First Year Is Usually the Slowest for ETFs
The best historical analogue for Bit ETFs is the launch of gold ETFs in 2004
That year, gold ETFs attracted a then-impressive $2.6 billion in inflows
But the subsequent years (figures adjusted for inflation) tell a different story:
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 is: second-year inflows exceeding the first year is the norm for ETFs, not the exception
2. Major Investment Banks Are Getting Involved
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 forces
These financial advisors currently have little to no access to these products
This is expected to change in 2025
The trillions of dollars they manage will start flowing into Bit ETFs
3. Investors Are Gradually Increasing Allocations - 1% Becoming 3% Is the New Trend
Bitwise has observed a clear pattern over the past seven years helping investment professionals enter the crypto space:
Most investors start with small allocations, then gradually increase over time
Investors who buy Bit ETFs in 2024 are expected to double their investment in 2025
Prediction 3: Coinbase Will Surpass Schwab to Become the World's Most Valuable Brokerage, with Its Stock Price Breaking $700 Per Share
At the start of 2023, investors could have bought Coinbase stock for $35. Today, it trades at $344, a nearly 10x increase. The forecast is that this price could continue to rise, and significantly so.
Prediction: Coinbase stock will break through $700 by 2025 (more than double the current price). This will make Coinbase the most valuable brokerage firm globally, surpassing Charles Schwab.
The reason is that Coinbase is not just a brokerage firm.
The three main catalysts driving its development are:
1. Stablecoin business
Benefiting from the agreement with USDC issuer Circle, Coinbase's stablecoin business is thriving.
Year-to-date, stablecoin revenue has grown by $162 million (+31%).
If the stablecoin development trajectory meets expectations, this trend will continue.
2. Base network
Last year, Coinbase launched the new Ethereum-based Layer 2 network Base.
It currently ranks first among L2 networks in terms of trading volume and total value locked.
The growth brings significant revenue.
Base now generates tens of millions of dollars in revenue per quarter.
With more developers, users, and capital flowing into the ecosystem, this revenue is expected to grow further.
3. Staking and custody services
As of the third quarter, these two businesses generated $589 million in revenue.
This is an increase of $304 million (+106%) year-over-year.
Both businesses are driven by asset balances and net new asset inflows.
These metrics are expected to increase significantly by 2025.
The annual revenue of these business lines is expected to exceed $1 billion.
Prediction 4: 2025 will be the "Crypto IPO Year", with at least five crypto unicorns going public in the US
In recent years, IPOs in the cryptocurrency field have been relatively calm. But 2025 is expected to see a surge of crypto unicorn IPOs.
Why now?
The background of the current crypto IPO companies is significantly different from previous years:
Cryptocurrency prices have risen
Investor demand has grown
Institutional adoption has surged
Blockchain technology has become mainstream
The macroeconomic environment is favorable
Most importantly, the political environment has warmed up
These factors have created favorable conditions for industry leaders to go public.
Five potential IPO candidates in 2025:
1. Circle
Issuer of USDC (one of the largest stablecoins)
Has been actively preparing for an IPO
Has a strong position in the stablecoin market
Expanding into new financial services
2. Figure
Known for providing various financial services using blockchain technology
Offers mortgage loans, personal loans, and asset tokenization services
Has been exploring the possibility of an IPO since 2023
The timing may be ripe as Wall Street's focus on tokenization increases
3. Kraken
One of the largest cryptocurrency exchanges in the US
Has been considering an IPO since 2021
Plans were delayed due to market conditions
May regain momentum for an IPO in 2025
4. Anchorage Digital
Provides digital asset infrastructure services
Serves a diverse client base, including investment advisors, asset managers, and venture capital firms
Holds a federal banking charter
Its comprehensive crypto services may prompt it to seek a public listing
5. Chainalysis
Market leader in blockchain compliance and intelligence services
Unique service offering
Strong growth trajectory
Likely to enter the public market as the crypto industry increasingly emphasizes compliance
Prediction 5: AI-agent-issued tokens will lead an even larger Meme coin frenzy than in 2024
A larger Meme coin frenzy is expected in 2025, with AI-agent-issued tokens leading the charge.
GOAT case: The first collision of AI and Meme coins
A notable case comes from the interaction between a16z's Marc Andreessen and the autonomous chatbot Truth Terminal. The AI agent promoted a niche Meme coin called GOAT, and the experimental project ultimately reached a market cap of over $1.3 billion, fully demonstrating the immense potential of the combination of AI and Meme coins.
Clanker: A pioneering AI token issuance platform
Clanker, as an innovative platform, enables autonomous token deployment on Coinbase's Layer 2 scaling solution, Base.
Users only need to tag Clanker on Farcaster and provide a token name and image, and the AI agent can 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 wave of Meme coin frenzy in 2025. Although these tokens may lack real-world utility and most may ultimately go to zero, they represent the convergence of AI and cryptocurrencies, two transformative technologies, and this innovative development direction will continue to attract market attention.
Prediction 6: The number of countries holding Bitcoin will double
Prospects for the US Bitcoin strategic reserve
There is still uncertainty about whether the US will establish a Bitcoin strategic reserve by 2025. While there are positive signals:
Republican Senator Cynthia Lummis of Wyoming has proposed a bill suggesting the US purchase 1 million Bitcoin over five years
Former President Trump has expressed support for this proposal
But according to Polymarket's predictions, the likelihood is less than 30%
Global competitive landscape
The US's consideration of establishing a Bitcoin strategic reserve has already triggered a chain reaction globally:
Lawmakers from Poland to Brazil have introduced bills to establish their own national Bitcoin strategic reserves
Governments are accelerating their positioning to avoid missing out on the opportunity
Current status and future outlook
According to data from BitcoinTreasuries.net:
Currently, there are nine countries that hold Bitcoin, with the US in the lead
This number is expected to double by 2025
Prediction 7: Coinbase will enter the S&P 500, and MicroStrategy will enter the Nasdaq 100
Coinbase and MicroStrategy, two major publicly traded companies in the cryptocurrency space, will be included in mainstream stock indices, meaning that almost all American investors' portfolios will gain exposure to the cryptocurrency sector.
Current market situation
Ordinary American investors currently have no exposure to cryptocurrencies.
As a new asset class, many investors are either unfamiliar with or actively avoid cryptocurrencies.
However, almost every investor holds funds that track the S&P 500 or Nasdaq 100 indices.
Many investors also hold both types of index funds.
Potential impact
Once these two companies are included in the indices, it will have a significant market impact:
Approximately $10 trillion in assets directly track the S&P 500 index
An additional $6 trillion in assets are benchmarked to this index
Expected capital inflows into Coinbase after index inclusion:
Index funds will need to buy around $15 billion worth of stock
Benchmark funds may bring an additional $9 billion in buy demand
Although the impact on MicroStrategy will be relatively smaller due to the smaller tracking assets of the Nasdaq 100, it will still be significant
Prediction 8: The US Department of Labor will relax the guidance on the inclusion of cryptocurrencies in 401(k) plans
In March 2022, the US Department of Labor issued guidance warning 401(k) plan fiduciaries about the significant risks of cryptocurrency investment options and announced the launch of an investigative program to protect plan participants from these risks.
With the arrival of the new administration in Washington, the Department of Labor is expected to relax this strict guidance. The importance of this policy change can be seen from the data:
US 401(k) plans currently manage $8 trillion in assets
These funds continue to receive weekly inflows of new capital
If cryptocurrencies were to gain a allocation of:
1%: This would bring $80 billion in new capital to the cryptocurrency sector
3%: This would bring $240 billion in new capital
Prediction 9: Stablecoin assets will double to $400 billion, and the US will pass long-awaited stablecoin legislation
The stablecoin market will see a boom in 2025, reaching a market capitalization of $400 billion or higher. This growth will be driven by the following key factors:
Stablecoin Legislation
The most achievable goal for crypto-friendly policymakers in Washington is to pass comprehensive stablecoin legislation. This will address key questions, including who will regulate and what the appropriate reserve requirements are. Clear regulations will unleash tremendous interest from issuers, consumers, and businesses. Major traditional banks like JPMorgan Chase are expected to enter this space.
FinTech Integration
Stripe acquired the stablecoin platform Bridge for $110 million, citing stablecoins as the "superconductor of financial services" due to their speed, accessibility, and low cost. PayPal will launch its own stablecoin (PYUSD) in 2023, and Robinhood recently announced plans to collaborate with multiple cryptocurrency companies to launch a global stablecoin network. As stablecoins become integrated into popular fintech applications, the assets under management and transaction volumes of stablecoins will grow significantly.
Global Trade and Remittances
Stablecoin transaction volume is expected to reach $8.3 trillion in 2024, approaching Visa's $9.9 trillion in payments during the same period. Stablecoin giant Tether recently provided financing for a $45 million oil trade using its USDT stablecoin. As the digital dollar continues to disrupt these massive markets, the demand for stablecoins will continue to grow.
Bull Market Growth
As the most obvious catalyst, the overall expansion of the cryptocurrency market will drive growth in stablecoin assets under management. With a bullish outlook for the cryptocurrency market in 2025, the stablecoin market will grow accordingly.
Prediction 10: With Wall Street accelerating its entry, the tokenization of real-world assets (RWAs) will surpass $50 billion
Three years ago, the cryptocurrency industry had tokenized less than $2 billion in real-world assets (RWAs), including private credit, US debt, commodities, and equities. Today, this market has grown to $13.7 billion.
The remarkable growth in tokenization is primarily due to its clear advantages: it enables instant settlement, costs far less than traditional securitization, and provides 24/7 liquidity, while bringing transparency and accessibility to almost all asset classes.
BlackRock CEO Larry Fink, once a Bitcoin skeptic, has become a staunch proponent of tokenization, stating that "security tokenization will be the next generation of the market." Coming from the head of the world's largest asset manager, this statement carries significant weight.
Wall Street is just beginning to recognize this, which means a flood of institutional capital is likely to pour into the tokenized RWA space soon.
By 2025, the tokenized RWA market is expected to reach $50 billion and could then experience exponential growth.
Venture capital firm ParaFi recently projected that the tokenized RWA market could grow to $2 trillion by the 2030s, while the Global Financial Markets Association has forecast it could reach $16 trillion.
Additional Prediction: By 2029, Bitcoin will surpass the $18 trillion gold market, with a price exceeding $1 million per coin
While people often tend to make one-year forecasts, a longer-term perspective on Bitcoin's development prospects is even more compelling.
By 2029, Bitcoin's market capitalization is expected to surpass the gold market. Based on gold's current market value, this means the price of each Bitcoin will exceed $1 million.
The choice of 2029 as the target year is not arbitrary: Bitcoin has historically operated in four-year cycles. While this pattern may not necessarily continue, 2029 will mark the peak of the next cycle (and also the 20th anniversary of Bitcoin's birth). Surpassing the gold market within 20 years of its inception would undoubtedly be a remarkable achievement, but Bitcoin is poised to accomplish this goal.
It's worth noting that if the US were to announce the purchase of 1 million Bitcoins for a strategic reserve, the time for Bitcoin to reach $1 million per coin could be significantly accelerated.
