Author: Matthew Sigel, Head of Digital Assets at VanEck; Patrick Bush, Senior Investment Analyst, Digital Assets at VanEck; Translated by: 0xjs@Jinse Finance
Before we start predicting for 2025, let's take a moment to review VanEck's predictions for 2024. Out of the 15 predictions we made in December 2023, we gave ourselves a score of 8.5/15. A 0.566 hit rate may not be perfect, but it's enough for us to keep moving forward. With Bitcoin breaking $100,000 and Ethereum breaking $4,000, even some of our misses were part of a memorable year.
2024 Crypto Predictions Review
1. Spot BTC ETP debuts - (1 point)
2. Bitcoin halving goes smoothly - (1 point)
3. Bitcoin sets a new all-time high in Q4 2024 - (1 point)
4. Ethereum remains the second-largest after Bitcoin - (1 point)
5. L2s dominate Ethereum activity (but L2 TVL still below Ethereum) - (0.5 point)
6. Stablecoin market cap hits a new high - (1 point)
7. DEX spot trading volume hits a record - (1 point)
8. SOL outperforms ETH - (1 point)
9. DePIN network adoption continues to grow - (1 point)
Now, let's get into the main event: VanEck's crypto predictions for 2025.
Top 10 Crypto Predictions for 2025
1. Crypto bull market peaks in Q1, sets new highs in Q4
2. US embraces Bitcoin through strategic reserves and increased adoption
3. Tokenized securities value exceeds $50 billion
4. Stablecoins reach $300 billion in daily settlement volume
5. On-chain activity by AI agents exceeds 1 million agents
6. Bitcoin Layer 2 total value locked (TVL) reaches 100,000 BTC
7. Ethereum blob space generates $1 billion in fees
8. DeFi hits new highs, with DEX volume reaching $4 trillion and TVL reaching $200 billion
9. NFT market rebounds, with $30 billion in trading volume
10. DApp tokens close the performance gap with L1 tokens
1. Crypto bull market peaks in Q1, sets new highs in Q4
We believe the crypto bull market will continue into 2025, peaking in the first quarter. At the first cycle peak, we predict Bitcoin prices around $180,000, while Ethereum prices will exceed $6,000. Other prominent projects like Solana (SOL) and Sui (SUI) could surpass $500 and $10, respectively.
After the first peak, we expect a 30% retracement in BTC, with Altcoins facing a steep 60% decline as the summer market consolidates. However, a recovery may emerge in the fall, with major tokens regaining momentum and reclaiming their previous all-time highs before year-end. To gauge when the market is nearing a peak, we are monitoring the following key signals:
Sustained high funding rates: When traders are borrowing capital to bet on rising BTC prices, they are willing to pay over 10% funding rates for three months or longer, indicating excessive speculation.
BTC futures funding rates >10% for months will be a bearish signal
Source: Glass Node, as of December 8, 2024. Past performance is not indicative of future results. This is not a recommendation to buy or sell any securities mentioned.
Excessive unrealized profits: If the proportion of BTC holders with large on-paper gains (profit-to-cost ratio of 70% or higher) stabilizes, it indicates the market is overheated.
Market cap overvalued relative to realized value: When the MVRV (market value to realized value) score exceeds 5, it suggests BTC prices are far above the average purchase price, typically signaling overheating.
Bitcoin dominance decline: If Bitcoin's share of the overall crypto market falls below 40%, it means speculative froth is shifting to riskier Altcoins, a typical late-cycle behavior.
Mainstream speculation: Unsolicited messages from non-crypto friends inquiring about dubious projects is a reliable signal of approaching top-of-market mania.
Historically, these indicators have been reliable signals of market exuberance and will guide our outlook as we navigate the expected market cycle in 2025.
For example: A "Top Signal" text from a friend I met five years ago.
2. US embraces Bitcoin through strategic reserves and increased adoption
The election of Donald Trump has injected tremendous momentum into the crypto market, with his administration appointing crypto-friendly leaders to key positions, including Vice President JD Vance, National Security Advisor Michael Waltz, Commerce Secretary Howard Lutnick, Treasury Secretary Mary Bessent, SEC Chair Paul Atkins, FDIC Chair Jelena McWilliams, and HHS Secretary RFK Jr. These appointments not only mark the end of anti-crypto policies, such as systematically cutting off banking services to crypto companies and their founders, but also signal the beginning of a policy framework that positions Bitcoin as a strategic asset.
Crypto ETPs: Physical creation, staking, and new spot approvals
The new SEC leadership (or potentially the CFTC) will approve several new US spot ETPs, including a VanEck Solana product. Ethereum ETP functionality will expand to include staking, further enhancing its utility for holders, while both Ethereum and Bitcoin ETPs will support physical creation/redemption. Whether through SEC rule SAB 121 repeal by Congress or the SEC, the path will be paved for banks and brokers to custody spot cryptocurrencies, further integrating digital assets into traditional financial infrastructure.
Sovereign Bitcoin adoption: Federal, state, and mining expansion
We predict that by 2025, the federal government or at least one US state (potentially Pennsylvania, Florida, or Texas) will establish a Bitcoin reserve. From the federal government's perspective, this is more likely to be achieved through an executive order leveraging the Treasury's Exchange Stabilization Fund (ESF), although bipartisan legislation remains an unknown. Meanwhile, state governments may act independently, viewing Bitcoin as a tool to hedge fiscal uncertainties or attract crypto investment and innovation.
On the Bitcoin mining front, with increased adoption by BRICS nations, the number of countries leveraging government resources to mine Bitcoin is expected to reach double digits (currently at seven). Russia's announcement of intent to settle international trade in cryptocurrencies further drives this trend, highlighting Bitcoin's growing strategic importance in the global economic landscape.
Number of countries leveraging government resources to mine Bitcoin
Source: VanEck Research, as of December 2024.
We expect this pro-Bitcoin stance to ripple through the entire US crypto ecosystem. With regulatory clarity and incentives attracting talent and companies back, the global share of crypto developers based in the US will rise from 19% to 25%. Concurrently, US Bitcoin mining will thrive, with the US's share of global mining hashrate increasing from 28% in 2024 to 35% by the end of 2025, driven by cheap energy and potential favorable tax policies. These trends will collectively solidify the US's leadership position in the global Bitcoin economy.
The Bitcoin computing power share of US-listed companies is expected to reach 35%
Source: Data provided by Morgan Chase and VanEck Research on December 6, 2024. Past performance does not guarantee future results.
Corporate Bitcoin holdings are expected to soar 43%
In terms of corporate adoption, we expect companies to continue accumulating Bitcoin from retail investors. Currently, there are 68 publicly listed companies that hold Bitcoin on their balance sheets, and we expect this number to reach 100 by 2025. Notably, we boldly predict that the total amount of Bitcoin held by private and public companies (currently 765,000 BTC) will exceed Satoshi's 1.1 million BTC holdings next year. This means that corporate Bitcoin holdings will grow at an astonishing rate of 43% over the next year.
Gold vs. Bitcoin Ownership: Growth Potential for Corporations and Governments
Source: VanEck Research, as of December 2024.
3. The value of tokenized securities exceeds $50 billion
Onchain securities grew 61% in 2024
Source: RWA.xyz, Defillama, as of December 6, 2024. Past performance does not guarantee future results.
Crypto has the potential to improve the financial system through increased efficiency, decentralization, and improved transparency. We believe 2025 will be the year of the takeoff of tokenized securities. Currently, there are approximately $12 billion worth of tokenized securities on the blockchain, the majority ($ 9.5 billion) of which are tokenized private credit securities listed on Figure's semi-permissioned blockchain Provenance.
Going forward, we see huge potential for tokenized securities to be issued on public blockchains. We believe investors have many motivations to drive the tokenization of stocks or bonds specifically for on-chain issuance. Next year, we expect entities like DTCC to enable tokenized assets to seamlessly transition between public blockchains and private closed-loop infrastructures. This dynamic will set standards for AML/KYC compliance for on-chain investors. As a wild card, we predict Coinbase will take unprecedented steps to tokenize the COIN stock and deploy it on its BASE blockchain.
4. Stablecoins reach $300 billion in daily settlement volume
Stablecoin transaction volume (USD) grew 180% YoY in 2024
Source: Artemis XYZ as of December 6, 2024. Past performance does not guarantee future results.
Stablecoins will transcend their niche in crypto trading to become a core part of global commerce. By the end of 2025, we expect stablecoins to settle $300 billion in daily transactions, equivalent to 5% of DTCC's current trading volume, compared to around $100 billion in daily stablecoin settlement in November 2024. Adoption by large tech companies (like Apple and Google) and payment networks (Visa, Mastercard) will redefine the economics of payments.
Beyond transactions, the remittance market will also see explosive growth. For example, stablecoin transfers between the US and Mexico could grow 5-fold, from $80 million to $400 million per month. Why? Speed, cost savings, and the growing trust of hundreds of millions who no longer see stablecoins as an experiment, but as a practical tool. While everyone is talking about blockchain adoption, stablecoins are its Trojan horse.
5. On-chain activity of AI agents exceeds 1 million agents
AI agents generate $8.7 million in revenue in 5 weeks
Source: Dune @jdhpyer as of December 6, 2024. Past performance does not guarantee future results.
We believe one of the most compelling narratives is the rise of AI agents, which will translate into a massive draw in 2025. AI agents are specialized AI bots that can guide users to achieve outcomes like "maximize profits" or "stimulate X/Twitter engagement". Agents leverage their ability to autonomously change strategies to optimize these outcomes. AI agents are typically fed data and trained to focus on a specific domain. Currently, protocols like Virtuals provide tools for anyone to create AI agents to perform on-chain tasks. Virtuals allows non-experts to access a decentralized pool of AI agent contributors, such as fine-tuners, data providers, and model developers, so non-technical users can create their own AI agents. The result will be an explosion in the number of agent-creating agents that their creators can rent out to generate income.
The focus of agent-building has been on DeFi so far, but we believe AI agents will transcend financial activity. Agents can serve as social media influencers, in-game computer players, and interactive partners/assistants in consumer apps. Agents have already become significant X/Twitter influencers, like Bixby and Terminal of Truths, with 92,000 and 197,000 followers respectively. Therefore, we believe the massive potential of agents will spawn over 1 million new agents in 2025.
6. The total value locked (TVL) of Bitcoin Layer 2 reaches 100,000 BTC
The total locked amount of Bitcoin L2 reaches 30,000 BTC, up 600% YTD in 2024
Source: Defillama as of December 6, 2024. Past performance does not guarantee future results. This is not a recommendation to buy or sell any securities mentioned.
We are closely watching the emergence of Bitcoin Layer 2 blockchains, which have immense potential to transform the Bitcoin ecosystem. Scaling Bitcoin enables these L2 solutions to achieve lower latency and higher transaction throughput, addressing the limitations of the base layer. Additionally, Bitcoin L2 enhances Bitcoin's functionality by introducing smart contract capabilities, which can support a robust decentralized finance (DeFi) ecosystem built around Bitcoin.
Currently, Bitcoin can be moved from the Bitcoin blockchain to smart contract platforms through bridging or wrapped BTC, which rely on centralized third-party systems vulnerable to hacks and security vulnerabilities. Bitcoin L2 solutions aim to mitigate these risks by providing a framework for direct integration with the Bitcoin base layer, minimizing dependence on centralized intermediaries. While liquidity constraints and adoption barriers still exist, Bitcoin L2 is poised to enhance security and decentralization, giving BTC holders more confidence to actively use their Bitcoin within the decentralized ecosystem.
As shown in the chart, Bitcoin L2 solutions experienced explosive growth in 2024, with the total value locked (TVL) exceeding 30,000 BTC, a 600% increase year-to-date, equivalent to around $30 billion. Currently, there are over 75 Bitcoin L2 projects in development, but only a few are likely to achieve widespread adoption in the long term.
This rapid growth reflects the strong demand from BTC holders seeking yield and broader asset utility. As chain abstraction technology and Bitcoin L2 mature into user-ready products, Bitcoin will also become an integral part of DeFi. For example, platforms leveraging chain abstraction like Ika on Sui or Infinex on Near highlight how innovative multi-chain solutions will enhance Bitcoin's interoperability with other ecosystems.
Here is the English translation of the text, with the specified terms translated as instructed:By implementing secure and efficient on-chain lending and other permissionless DeFi solutions, Bitcoin L2 and abstraction technologies will transform Bitcoin from a passive store of value to an active participant in the decentralized ecosystem. As adoption scales, these technologies will bring tremendous opportunities for on-chain liquidity, cross-chain innovation, and a more integrated financial future.
7. Ethereum Blob Space Generates $1 Billion in Fees
Ethereum Blobs Published Daily
Source: Dune @hildobby as of December 6, 2024. Past performance does not guarantee future results.
The Ethereum community is actively discussing whether Ethereum is deriving sufficient value from its L2 network through Blob Space, which is a key component of its scaling roadmap. Blob Space acts as a dedicated data layer where L2s submit their compressed transaction histories to Ethereum, paying ETH fees per blob. While this architecture supports Ethereum's scalability, the value currently being extracted by L2s and paid to the mainnet is minuscule, with gross margins around 90%. This has raised concerns that Ethereum's economic value may be overly shifting towards L2s, leaving the base layer underutilized.
Although Blob Space growth has recently slowed, we expect its usage to surge by 2025, driven by three key factors:
Explosive L2 Adoption: As users migrate to the low-cost, high-throughput environments of L2s for DeFi, gaming, and social applications, transaction volumes on Ethereum L2s are growing at over 300% annualized. The proliferation of consumer-facing dApps on L2s, with more transactions ultimately settling on Ethereum, will significantly increase demand for Blob Space.
Rollup Optimizations: Advances in Rollup technology, such as improved data compression and lower costs to publish data to Blob Space, will incentivize L2s to store more transaction data on Ethereum, enabling higher throughput without sacrificing decentralization.
High-Value Use Cases: The rise of enterprise applications, zk-rollup-driven financial solutions, and real-world asset tokenization will drive high-value transactions prioritizing security and immutability, increasing the willingness to pay Blob Space fees.
By the end of 2025, we expect Blob Space fees to exceed $1 billion, up from the currently negligible levels. This growth will cement Ethereum's position as the final settlement layer for decentralized applications while enhancing its ability to capture value from the rapidly expanding L2 ecosystem. Ethereum's Blob Space will scale the network and become a major revenue source, balancing the economics between the mainnet and L2s.
8. DeFi Hits New Highs, DEX Volumes Reach $4 Trillion, TVL Reaches $200 Billion
Total Value Locked (TVL) in DeFi
Source: Defillama as of December 6, 2024. Past performance does not guarantee future results.
While Decentralized Exchange (DEX) volumes have hit new highs, both in absolute terms and relative to Centralized Exchanges (CEXs), the Total Value Locked (TVL) in Decentralized Finance (DeFi) remains 24% below its peak. We expect that driven by AI-related tokens and new consumer-facing dApps, DEX volumes will surpass $4 trillion by 2025, accounting for 20% of CEX spot trading volumes.
Furthermore, the influx of tokenized securities and high-value assets will drive DeFi growth, providing new liquidity and broader utility. As a result, we expect the DeFi TVL to rebound to over $200 billion by year-end, reflecting the growing demand for decentralized finance infrastructure in the evolving digital economy.
9. NFT Market Rebounds, Volumes Reach $30 Billion
NFT Counts Declined in 2024; We Expect a Rebound in 2025
Source: As of December 6, 2024. Past performance does not guarantee future results. This is not a recommendation to buy or sell any securities mentioned.
The 2022-2023 bear market has dealt a heavy blow to the NFT industry, with trading volumes plummeting 39% since 2023 and 84% since 2022. While fungible token prices began to rebound in 2024, most NFTs lagged behind, with weak prices and low activity until a turnaround in November. Despite these challenges, some outstanding projects have leveraged strong community ties to transcend speculative value, weathering the downtrend.
For example, Pudgy Penguins has successfully transformed into a consumer brand through collectible toys, while Miladys has gained cultural status in the realm of ironic internet culture. Similarly, Bored Ape Yacht Club (BAYC) has continued to evolve as a dominant cultural force, attracting widespread attention from brands, celebrities, and mainstream media.
With the rebound in crypto wealth, we expect new affluent users to invest in NFTs, not just as speculative investments, but as assets with enduring cultural and historical significance. Given their strong cultural cachet and relevance, well-known collections like CryptoPunks and Bored Ape Yacht Club (BAYC) are likely to benefit from this shift. While BAYC and CryptoPunks remain far below their historical trading peaks, down around 90% and 66% in ETH terms, respectively, other projects like Pudgy Penguins and Miladys have already surpassed their previous price highs.
Ethereum continues to dominate the NFT landscape, hosting the majority of important collections. By 2024, it accounted for 71% of NFT trading, and we expect this figure to rise to 85% by 2025. This dominance is reflected in the market capitalization rankings, where Ethereum-based NFTs occupy all of the top 10 positions and 16 of the top 20, highlighting the blockchain's central role in the NFT ecosystem.
While NFT trading volumes may not return to the frenetic highs of previous cycles, we believe that with the market shifting towards sustainability and cultural relevance over speculative hype, an annual trading volume of $30 billion is achievable, around 55% of the 2021 peak.
10. dApp Tokens Narrow Performance Gap with L1 Tokens
In 2024, Layer 1 Tokens Outperformed Leading dApp Tokens by 2x
Source: Market Vectors as of December 8, 2024. Past performance does not guarantee future results. The MVSCLE index tracks smart contract platform tokens. The MVIALE index tracks infrastructure application tokens.
A consistent theme in the 2024 bull market has been the outperformance of L1 blockchain tokens over decentralized application (dApp) tokens. For example, the MVSCLE index, which tracks smart contract platform tokens, is up 80% year-to-date, while the MVIALE index for application tokens has returned only 35%, lagging behind.
However, we expect this dynamic to shift in late 2024 as a wave of new dApps launches, offering innovative and practical products that bring value to their respective tokens. Within the major thematic trends, we see AI as a standout category for dApp innovation. Additionally, decentralized physical infrastructure network (DePIN) projects have immense potential to attract investor and user interest, helping to achieve a broader rebalancing of performance between L1 and dApp tokens.
This transition underscores the growing importance of utility and product-market fit in determining the success of application tokens in the evolving crypto landscape.
