Cryptocurrencies make a strong comeback in 2024, continuing their glory in 2025.
Author: Nina Bambysheva, Forbes
Translator: Luffy, Foresight News
The crypto winter? It's over. The decline of the crypto empire and the courtroom drama? They are now a thing of the past. The survivors? They have been tested in real battles, with keen vision, as if this is a new gold rush.
After years of conflict with the U.S. Securities and Exchange Commission (SEC), Bitcoin and Ethereum exchange-traded funds (ETFs) have finally arrived. According to crypto research firm K33 Research, as of December 16, U.S. Bitcoin ETFs had $129 billion in assets under management, surpassing the $125 billion of gold ETFs.
The market euphoria after the U.S. election, combined with Donald Trump's promise to make America the "global capital of Cryptocurrency" and establish a strategic Bitcoin reserve, has pushed Bitcoin prices to over $100,000 at one point.
Solana is seeing development opportunities, thanks to the rise of memecoins and new narratives like DePIN. DePIN is a network that uses blockchain technology to decentralize control and ownership of physical infrastructure. Platforms like Polymarket (where users can bet on the outcome of the U.S. presidential election) and the battle royale game Off The Grid have found success in the mainstream market. A new wave of "degens" is betting on tokens like fartcoin and dogwifhat, both of which have market caps exceeding $1 billion.
"This year, Cryptocurrency has entered the mainstream consciousness in a way we've never seen before, and it is now a sustainable long-term asset class that will have a voice and play a significant role," said Rob Hadick, general partner at San Francisco-based crypto venture capital firm Dragonfly. "If you just look at the impact of Cryptocurrency on elections, whether it's Cryptocurrency political donations or its promotion among legislators and presidential candidates, this is unprecedented, and it's a major step towards the legitimization of Cryptocurrency."
Donald Trump attending the 2024 Bitcoin Conference in Nashville, Tennessee. Photo credit: The Washington Post
With Trump and a cadre of Cryptocurrency-friendly officials poised to take office, the "golden age of Cryptocurrency" that industry insiders have been talking about is here. Here are the emerging trends:
New All-Time Highs and a U.S. Bitcoin Reserve
The art of bold price predictions is back in vogue. Crypto asset manager Bitwise forecasts that if the U.S. establishes a strategic reserve similar to oil or gold, Bitcoin's price could reach $200,000 or even $500,000. The logic is that a U.S. government Bitcoin reserve would trigger global FOMO.
Trump proposed at the Nashville Bitcoin conference in July to use 200,000 Bitcoins (worth $21 billion) seized from criminals to kickstart the reserve. But the legal path is unclear - does it require Congressional approval, or can the executive branch act unilaterally? Pro-Crypto Senator Cynthia Lummis put forward a Treasury-operated reserve plan in July. Skeptics argue that Bitcoin's volatility could disrupt financial stability. Trump has remained silent on whether the U.S. will buy more Bitcoins on the open market, adding another layer of mystery.
Crypto Regulation Reset: A Friendly Washington
The new administration is poised to be the most Crypto-friendly government to date. Key government appointments related to Cryptocurrency include:
- SEC: Former SEC Commissioner and Crypto advocate Paul Atkins is set to replace Crypto nemesis Gary Gensler, who was known for his litigious and enforcement-heavy approach during his tenure.
- CFTC: Andreessen Horowitz policy chief and former CFTC Commissioner Brian Quintenz is a frontrunner to lead the agency.
- Treasury: Hedge fund billionaire and Bitcoin proponent Scott Bessent is Trump's pick for Treasury Secretary.
- Commerce: Cantor Fitzgerald (the primary custodian of Tether's USDT reserves) CEO Howard Lutnik will head the department.
- AI and Crypto Czar: Long-time venture capitalist David Sacks, who previously worked with Elon Musk at PayPal, will oversee policy in two key areas of Trump's strategy to enhance national competitiveness.
- House Financial Services Committee: Arkansas Republican Congressman French Hill, along with the outgoing committee chair Patrick McHenry, have advocated for Crypto-friendly legislation and plan to prioritize a crypto market structure bill in the first 100 days, as well as investigate the so-called "Choke Point 2.0" which many believe unfairly targeted the Crypto industry through de-banking practices.
"This is a real opportunity to craft good policy for the industry," said Kristin Smith, CEO of the Blockchain Association, which represents over 100 Cryptocurrency companies in Washington, D.C. "The White House has signaled this is a priority. I think we'll see a concerted effort across government agencies, legislative pushes on market structure and stablecoins, and a major shift of innovation returning to the U.S.," she added.
New Crypto IPOs and Venture Capital Inflows
The pipeline for Cryptocurrency IPOs is heating up. Bitwise listed five companies that could go public next year:
- Circle: The issuer of the second-largest stablecoin USDC, which secretly filed for an IPO in January.
- Figure: The company is known for its blockchain-based financial services like mortgage lending, personal loans, and asset tokenization, and has been exploring a listing since last year.
- Kraken: The U.S.-based Cryptocurrency exchange's IPO plans can be traced back to 2021.
- Anchorage Digital: Its status as a federally chartered bank may pave the way for its public debut.
- Chainalysis: The blockchain compliance and intelligence leader is expected to go public.
Additionally, Dragonfly's Hadick said: "I expect the LP market to get better, and they'll want to put more capital into Crypto. A lot of traditional Web2 crossover funds will return to Web3. We've already seen this in certain areas, like stablecoins and payments." He added that venture capital deals often lag public market price appreciation by a quarter or two.
Crypto-Related Companies Entering Major Stock Indices
MicroStrategy's stock has surged over 400% this year. Due to new accounting rules allowing companies to reflect their Bitcoin investments at market value on their financial statements, the company is now a Nasdaq 100 constituent, and analysts predict it will next be added to the S&P 500 index. This change could bring MicroStrategy into index-tracking funds, exposing it to countless American investors. MicroStrategy co-founder and executive chairman Michael Saylor's "Bitcoin Treasury" strategy (selling bonds and equity to hoard Bitcoin) has propelled his $86 billion company into the top 100 of the S&P 500. Analysts say the 70% year-to-date rise of Coinbase could also land it in this coveted index.
Stablecoin Explosion
With long-awaited U.S. stablecoin legislation on the horizon, the stablecoin industry is poised for explosive growth, potentially doubling in market cap to $400 billion. According to Bitwise data, stablecoin trading volume could reach $8.3 trillion in 2024, nearly matching Visa's $9.9 trillion in payments.
Tether and Circle will remain dominant. However, Hadick warned that their growth could stall quickly if they continue to operate more like asset managers than payment companies.
Stripe acquired the stablecoin platform Bridge for $1.1 billion in October, conveying a message: stablecoins may become the cornerstone of fintech. Stripe calls it "the superconductor of financial services" and touts its unparalleled speed, low cost, and global impact. Robinhood has also followed suit, exploring the creation of a global stablecoin network.
At the same time, the next generation of "stablecoin 2.0" models are quietly emerging. Ceteris, the research lead at the New York cryptocurrency analysis firm Delphi Digital, explains: "There are many new stablecoin models that are starting to pay dividends back to token holders or actual user-attracting applications. I think these models are disruptive."
Accelerated Tokenization of Traditional Assets
BlackRock CEO Larry Fink has been advocating for tokenization for years. From real estate to art, everything may soon have tokens. The biggest benefits of tokenization are: instant settlement, lower costs than traditional securitization, 24/7 liquidity, and transparency.
Three years ago, the crypto industry had only tokenized $2 billion in real-world assets (RWA), including private credit, US debt, commodities, and equities. Now, this figure is approaching $14 billion. The venture capital firm ParaFi predicts that by 2030, the tokenized RWA market could soar to $2 trillion, signaling a major shift in asset ownership and trading.
New Applications, Better Infrastructure
The buzzword by the end of 2024 is AI agents. Be prepared to witness the convergence of artificial intelligence and cryptocurrencies, which is closer to science fiction.
This trend has already begun to emerge. For example, TruthTerminal, an AI agent, not only received $50,000 from Marc Andreessen but also became a millionaire by leveraging X social media. Its success stems from promoting a token based on an absurd meme from the early 2000s (the anonymous creator of the token transferred a large sum of money into TruthTerminal's wallet, which is managed by Andy Ayrey).
However, analysts are cautious about this. Practical AI agents (such as those attempting to execute complex transactions across blockchains on behalf of users) are scarce and still in the early stages. "The excitement around agents is because they are very novel," says Ceteris of Delphi, "but whether good or bad, it may be the biggest bubble of this cycle."
Although the blockchain industry remains fragmented, and most decentralized applications have not yet become mainstream, the work of building a robust infrastructure continues. Ceteris explains, "Solana has set the trend for the high-throughput blockchain era, and almost every new chain is launched under this trend, so there will be a lot of cheap block space."
And so, the narrative theme of cryptocurrencies has shifted from survival to prosperity. This is just a part of what may bring surprises next year. You can choose to prepare popcorn for this show, or take out your wallet for this opportunity. Caution is essential, as the market will experience highs and lows. And this time, the stakes seem higher than ever before.
