Author: Nina Bambysheva, Forbes
Translator: Luffy, Foresight News
Is the cryptocurrency winter over? Yes. The fall of the crypto empire and the courtroom drama? All in the past. The survivors? Battle-tested, with a clear 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, coupled with Donald Trump's promise to make America the "global capital of Bit" and establish a strategic Bit reserve, has pushed Bit prices to over $100,000 at one point.
Solana is seeing growth opportunities, thanks to the rise of memecoins and new narratives like DePIN, which 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 mainstream success. A new wave of "degens" is betting on tokens like fartcoin and dogwifhat, both of which now have market caps over $1 billion.
Donald Trump attending the 2024 Bit Conference in Nashville, Tennessee. Photo credit: The Washington Post
With Trump and a cadre of crypto-friendly officials set to take office, the "golden age of crypto" is upon us, according to industry insiders. Here are the emerging trends:
New Highs and a U.S. Bit 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, Bit's price could reach $200,000 or even $500,000. The logic is that a U.S. government Bit reserve would trigger global FOMO.
Trump proposed at the Nashville Bit conference in July to use 200,000 Bit (worth $21 billion) seized from criminals to seed 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 forth a Treasury-operated reserve plan in July. Skeptics argue Bit's volatility could disrupt financial stability. Trump has remained silent on whether the U.S. will buy more Bit 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 crypto-related government appointments include:
SEC: Former SEC commissioner and crypto advocate Paul Atkins is set to replace crypto nemesis Gary Gensler, known for his litigious and enforcement-heavy approach during his tenure.
CFTC: Andreessen Horowitz policy chief and former CFTC commissioner Brian Quintenz is a leading candidate to head the agency.
Treasury: Hedge fund billionaire and Bit advocate Scott Bessent is Trump's pick for Treasury Secretary.
Commerce: Cantor Fitzgerald (a major custodian of Tether's USDT reserves) CEO Howard Lutnik will lead the department.
AI and Crypto Czar: Long-time VC David Sacks, who worked with Elon Musk at PayPal, will oversee policy in two key areas of Trump's strategy to boost national competitiveness.
House Financial Services Committee: Arkansas Republican Rep. French Hill, along with outgoing committee chair Patrick McHenry, are advocating crypto-friendly legislation, planning to prioritize a crypto market structure bill in the first 100 days and investigate the so-called "Choke Point 2.0" that many believe unfairly targeted the crypto industry through de-banking.
"This is a real opportunity to craft good policy for the industry," said Kristin Smith, CEO of the Blockchain Association in Washington, D.C., which represents over 100 crypto companies. "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 VC Capital Inflows
The crypto IPO pipeline is heating up. Bitwise listed five companies that may go public next year:
Circle: The issuer of the second-largest stablecoin USDC, which secretly filed for an IPO in January.
Figure: Known for blockchain-based financial services like mortgage lending, personal loans, and asset tokenization, it has been exploring a listing since last year.
Kraken: The U.S.-based crypto exchange's IPO plans can be traced back to 2021.
Anchorage Digital: Its status as a federally chartered bank may pave the way for a listing.
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 that in certain areas, like stablecoins and payments." He added that venture deal prices often lag public market prices by a quarter or two.
Crypto-Related Firms Entering Major Stock Indexes
MicroStrategy's stock has surged over 400% this year. Due to new accounting rules allowing companies to reflect their Bit investments at market value on their balance sheets, the company is now a Nasdaq 100 constituent, and analysts predict it will next join the S&P 500. This change could bring MicroStrategy into index-tracking funds, exposing it to countless American investors. MicroStrategy co-founder and executive chairman Michael Saylor's "Bit treasury" strategy (selling bonds and equity to hoard Bit) has propelled his $86 billion company into the S&P 500's top 100. Analysts say the 70% year-to-date rise of Coinbase also makes it a likely candidate for the coveted index.
Stablecoin Explosion
With long-awaited U.S. stablecoin regulation on the horizon, the stablecoin industry is poised for explosive growth, potentially doubling in market cap to $400 billion. According to Bitwise, 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 if they continue to operate more like asset managers than payment companies, their growth could stall quickly.
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 director 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 is already emerging. 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 to 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 could 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.
