As 2024 draws to a close, the UK-based cryptocurrency asset manager CoinShares, a European cryptocurrency investment firm, has released its market predictions for the new year. In this report, CoinShares has identified the key trends that could dominate the cryptocurrency industry in 2025.
The report closely examines the potential impact of the United States under President Donald Trump on the cryptocurrency market. It also discusses the emergence of companies generating Bitcoin yields as a trend to watch in 2025.
Trump, Reshaping Cryptocurrency?
In a report dated December 11, CoinShares expects the United States to undergo significant changes in cryptocurrency regulation under the Trump administration by 2025. Analyst Max Shannon believes that the promised regulatory reforms and support for Bitcoin miners could create a favorable environment for digital assets in 2025.
"With the US shifting to such policies, altcoins are likely to outperform Bitcoin. However, Bitcoin could still be one of the best-performing assets in 2025." – Analyst
Miners focused solely on Bitcoin mining are predicted to outperform those who have diversified into other revenue streams, such as AI or manufacturing.
Considering the rapid success of Bitcoin ETFs, CoinShares noted that the future of Bitcoin ETFs looks promising. Additionally, only 20% of Bitcoin ETF AUM is currently held by professional firms and asset managers, suggesting room for further institutional adoption.
Bitcoin Yields... The Next Big Thing?
Another trend to watch in 2025 is the emergence of companies generating Bitcoin yields. This is gaining attention as companies are now adopting BTC as a financial asset.
Analyst Satish Patel categorized Bitcoin yields into three buckets. The first is the growth in a company's Bitcoin holdings proportional to its stock. The second is yield farming, where companies generate revenue by lending out their Bitcoin.
The third category includes alternative strategies that generate yields from a company's Bitcoin holdings through the use of derivatives.
MicroStrategy, holding 423,650 BTC, has introduced its own "BTC Yield" metric to measure the effectiveness of its strategy. Companies like Block, Marathon Digital, and Metaplane are following in MicroStrategy's footsteps, accumulating Bitcoin to generate yields.
"This trend reflects the recognition of Bitcoin not only as a store of value but also as a means of generating yields." – Analyst
Patel also emphasized that in 2024, several major companies began accepting cryptocurrencies as a means of payment. He believes that companies like Amazon, Shopify, and Nike, which are already involved in cryptocurrencies through payments or investments, may consider integrating Bitcoin as a financial asset in 2025.
Outlook for Ethereum and Solana in 2025
Regarding Ethereum, CoinShares predicted that Layer 2 usage will continue to grow in the coming year. Analyst Luke Nolan believes that the institutionalization of Layer 2 chains, as seen with Kraken and Sony, will drive adoption in 2025.
"In our view, increased L2 adoption will drive demand for Block and Ethereum transaction fee spending." – Analyst
He also added that L2 will once again become a source of demand for Ethereum.
As Ethereum prepares for the Fectra upgrade in 2025, the analyst mentioned that the execution of the roadmap will bring new efficiencies. ETH tokens will face the challenge of balancing usability and value accrual.
Regarding the future of Solana, the report stated that Frankendancer and Firedancer could transform it.
These are validator clients aiming to modify Solana's networking, runtime, and consensus layers to improve performance and scalability. However, Solana will need to address its transactions per second (TPS) limit through updates to achieve greater efficiency.
