Please note that VanEck may hold the following digital assets.
Before we start discussing our outlook for 2025, let's first review the performance of our 2024 predictions. Out of the 15 predictions we made at the end of 2023, our self-assessment score is 8.5/15. While the 56.6% accuracy rate is not perfect, it is enough for us to "stay in the game." With Bitcoin (BTC) breaking $100,000 and Ethereum (ETH) breaking $4,000, 2024 was a memorable year in the history of cryptocurrencies, even though some predictions did not fully materialize.
2024 Prediction Review
In our 2024 predictions, we successfully captured several key trends, including:
1. The launch of the first Bitcoin spot ETP
2. The successful completion of the Bitcoin halving
3. Ethereum remaining the second-largest, after Bitcoin
4. Bitcoin reaching a new all-time high in Q4 2024
5. L2 dominating Ethereum activity (but L2 TVL still below Ethereum)
6. Stablecoin market cap reaching a new high
7. Decentralized exchange trading volume reaching a new record
8. Solana (SOL) outperforming Ethereum (ETH)
9. Increased adoption of DePIN networks
Although some predictions were not fully realized, the overall trends still validated our analytical direction.
Top 10 Cryptocurrency Predictions for 2025
1. The crypto bull market will reach a mid-cycle peak in Q1 and set a new high by year-end
2. The US further embraces Bitcoin through strategic reserves and policy support
3. The total value of tokenized securities surpasses $50 billion
4. Stablecoins reach a daily settlement volume of $300 billion
5. On-chain activity by AI agents exceeds 1 million
6. The total value locked (TVL) in Bitcoin's Layer 2 networks reaches 100,000 BTC
7. Ethereum's Blob space fee revenue reaches $1 billion
8. DeFi trading volume sets a new high of $4 trillion, with a total value locked of $200 billion
9. The NFT market rebounds, with annual trading volume reaching $30 billion
10. Decentralized application (DApp) tokens start to catch up with mainstream public chain tokens
Next, we will delve into the background and logic behind some of these key predictions.
1. The Crypto Bull Market Reaches a Mid-Cycle Peak in Q1 and a New High by Year-End
We believe the crypto bull market of 2025 will continue to develop, reaching a first peak in Q1. At the top of this cycle, we expect Bitcoin (BTC) to reach around $180,000, and Ethereum (ETH) to break $6,000. Other prominent projects like Solana (SOL) and Sui (SUI) could surpass $500 and $10, respectively.
After the first peak, we expect BTC to retrace 30%, while Altcoins could see larger drops of 60%, reflecting market consolidation during the summer. However, a recovery is likely in the fall, with major tokens regaining momentum and breaking new highs before the end of the year. To gauge when the market is nearing a top, we will monitor the following key signals:
· Persistent high funding rates: When traders are willing to pay funding rates over 10% for 3 months or more to borrow and long BTC, it indicates speculative overheating.
· Excessive unrealized profits: If a large proportion of BTC investors are in significant paper gains (profit-to-cost ratio of 70% or higher), it suggests a frenzied market.
· High market cap relative to realized value: When the MVRV (market value to realized value) score exceeds 5, it indicates BTC is priced far above the average purchase price, typically signaling overheating.
· Declining Bitcoin dominance: If Bitcoin's share of the total crypto market falls below 40%, it means speculative capital is flowing into higher-risk Altcoins, a typical late-cycle behavior.
· Mainstream speculation: When non-crypto friends start inquiring about dubious projects, it is usually a reliable signal of a market top.
These indicators have historically been reliable signals of market frenzy, and they will guide our outlook for the 2025 market cycle.
2. The US Further Embraces Bitcoin Through Strategic Reserves and Crypto Adoption
The election of Donald Trump has already injected significant momentum into the crypto market, with his administration appointing several 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 the systematic de-banking of crypto companies), but also herald 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 multiple new spot crypto exchange-traded products (ETPs) in the US, including a VanEck Solana product. The functionality of Ethereum ETPs will be expanded to include staking, further enhancing their utility for holders, while both Ethereum and Bitcoin ETPs will support physical creation/redemption. The repeal of SEC Rule SAB 121 (whether through the SEC or Congress) will pave the way 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 US federal government or at least one state (likely Pennsylvania, Florida, or Texas) will establish a Bitcoin reserve. At the federal level, this is more likely to be achieved through an executive order leveraging the Treasury Department's Exchange Stabilization Fund (ESF), although bipartisan legislation remains uncertain. Meanwhile, state governments may act independently, viewing Bitcoin as a hedge against fiscal uncertainty or a means to attract crypto investment and innovation.
In Bitcoin mining, the number of countries using government resources to mine is expected to reach double digits (currently seven), driven by the increasing adoption of cryptocurrencies by BRIC nations. This trend is further bolstered by Russia's stated plans to use cryptocurrencies for settling international trade, further highlighting Bitcoin's global influence.
We expect this pro-Bitcoin stance to ripple through the broader US crypto ecosystem. With regulatory clarity and incentives attracting talent and companies back, the US's global share of crypto developers will rise from 19% to 25%. At the same time, US Bitcoin mining activity will thrive, with the US's share of global mining hashrate increasing from 28% in 2024 to 35% by the end of 2025, thanks to cheap energy and potential tax incentive policies. These trends will collectively solidify the US's leadership in the global Bitcoin economy.
US-Listed Companies' Bitcoin Hashrate Share to Reach 35%
Corporate Bitcoin Holdings: Expected to Grow 43%
In terms of corporate adoption, we expect companies to continue accumulating Bitcoin from retail holders. Currently, there are 68 publicly listed companies holding 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 surpass Satoshi's 1.1 million BTC holdings next year. This means that corporate Bitcoin holdings will see a significant 43% growth in the coming year.
Gold and Bitcoin Ownership: Growth Potential for Enterprises and Governments
3. Tokenized Securities Value Exceeds $50 Billion
On-Chain Securities Grow 61% in 2024
On-Chain Securities Grew 61% in 2024
The infrastructure of Altcoins promises to improve the financial system through increased efficiency, decentralization, and greater transparency. We believe 2025 will be the year of a tokenized securities boom. Currently, there are around $12 billion in tokenized securities on the blockchain, the majority (around $9.5 billion) being tokenized private credit securities on Figure's permissioned BlockBeats Provenance.
Going forward, we see tremendous potential for tokenized securities to be launched on public chains. We believe investors have many motivations driving the full on-chain issuance of tokenized stocks or debt securities. We predict that entities like DTCC will support the seamless transition of tokenized assets between public blockchains and private closed-off infrastructures within the next year. This dynamic will facilitate the establishment of AML/KYC standards tailored for on-chain investors. As a bold prediction, we expect Coinbase to take unprecedented steps in tokenizing its COIN stock and deploying it on its BASE blockchain.
4. Stablecoins Reach $300 Billion in Daily Settlement
Stablecoin Transfers (USD) Grow 180% YoY in 2024
Stablecoins will transition from a niche role in Altcoin trading to becoming a core component of global commerce. By the end of 2025, we expect stablecoins to reach $300 billion in daily settlement volume, equivalent to 5% of the current DTCC's trading volume, compared to around $100 billion in daily settlement in November 2024. With the adoption by major tech companies (such as Apple and Google) and payment networks (Visa and Mastercard), stablecoins will redefine the economics of payments.
Beyond transactional use, the remittance market will also see explosive growth. For example, stablecoin transfers between the US and Mexico could grow from $80 million to $400 million per month, a 5-fold increase. This is due to their speed, cost savings, and the increasing perception of stablecoins as a practical tool rather than an experimental technology. Although blockchain adoption is still under discussion, stablecoins are effectively the "Trojan horse" of blockchain technology.
5. Over 1 Million AI Agents Active on-Chain
AI Agents Generate $8.7 Million in Revenue in 5 Weeks
We believe that AI Agents is one of the most compelling trends and will gain tremendous traction in 2025. AI Agents are specialized AI bots that can help users achieve goals, such as "maximizing returns" or "boosting X/Twitter engagement". These agents autonomously adjust their strategies to optimize outcomes. AI Agents are typically fed data and trained on a specific domain. Currently, protocols like Virtuals provide tools for anyone to create on-chain AI Agents. Virtuals allows non-technical users to access decentralized AI contributors (such as fine-tuning experts, data set providers, and model developers), enabling ordinary users to create their own agents. This model will lead to the emergence of a vast number of agents, whose creators can rent them out to generate income.
Currently, the construction of agents is primarily focused on the DeFi domain, but we believe AI Agents will transcend financial activities. For example, these agents can be used as influencers on social media, virtual players in games, and interactive assistants or companions in consumer applications. Agents like Bixby and Terminal of Truths have already become significant X/Twitter influencers, with 92,000 and 197,000 followers, respectively. Therefore, we expect over 1 million new agents to be born by 2025.
6. Bitcoin Layer 2 (L2) Networks Reach 100,000 BTC in Total Value Locked (TVL)
Bitcoin L2 TVL Reaches 30,000 BTC, Growing 600% YoY in 2024
The securities mentioned in the text do not constitute a recommendation to buy or sell.
We are closely monitoring the rise of Bitcoin Layer 2 (L2) blockchains, which have immense potential to transform the Bitcoin ecosystem. By expanding Bitcoin's functionality, these L2 solutions can achieve lower latency and higher transaction throughput, addressing the limitations of the Bitcoin mainnet. Additionally, Bitcoin L2s enhance Bitcoin's capabilities by introducing smart contract functionality, supporting the decentralized finance (DeFi) ecosystem built around Bitcoin.
Currently, Bitcoin can be bridged or wrapped to be used on smart contract platforms, but these methods rely on third-party systems, making them vulnerable to hacks and security vulnerabilities. Bitcoin L2 solutions aim to mitigate these risks by integrating directly with the Bitcoin mainnet, reducing the dependence on centralized intermediaries. Although liquidity constraints and adoption barriers still exist, Bitcoin L2s are poised to improve security and decentralization, providing greater confidence for BTC holders to actively participate in 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% year-over-year increase, equivalent to around $3 billion. Currently, there are over 75 Bitcoin L2 projects in development, but only a few are likely to achieve significant adoption in the long run.
This rapid growth reflects the strong demand from BTC holders for yield generation and broader asset utility. As chain abstraction technologies and Bitcoin L2s mature into end-user-ready products, Bitcoin will become an integral part of DeFi. For example, the Ika platform on Sui or the Infinex chain abstraction technology used by Near demonstrate how innovative multi-chain solutions can enhance Bitcoin's interoperability with other ecosystems.
By supporting secure and efficient on-chain lending, borrowing, and other permissionless DeFi solutions, Bitcoin L2s and abstraction technologies will transform Bitcoin from a passive store of value into an active participant in the decentralized ecosystem. As adoption scales, these technologies will unlock the immense potential of on-chain liquidity, cross-chain innovation, and a more integrated financial future.
7. Ethereum Blob Space Fee Revenue Reaches $100 Million
Daily Ethereum Blob Space Generation
The Ethereum community is actively discussing whether its Layer-2 (L2) networks can bring enough value to the Ethereum mainnet through Blob space. Blob space is a key component of the Ethereum scaling roadmap, as a dedicated data layer where L2s can submit compressed versions of their transaction histories and pay ETH fees per Blob. While this architecture supports Ethereum's scalability, L2s currently pay little value to the mainnet, with a gross margin of around 90%. This has raised concerns that Ethereum's economic value may be overly shifted to L2s, leading to a decline in mainnet utilization.
Although the growth of Blob space has recently slowed, we expect its usage to increase significantly by 2025, driven by three main factors:
1. Explosive L2 adoption: Ethereum L2 transaction volumes are growing at an annualized rate of over 300%, as users migrate to low-cost, high-throughput environments for DeFi, gaming, and social applications. As more consumer-facing dApps emerge on L2s, more transactions will be settled back on Ethereum, significantly increasing the demand for Blob space.
2. Rollup technology optimization: Advances in Rollup technology (such as improved data compression and reduced costs of submitting data to Blob space) will encourage L2s to store more transaction data on Ethereum, unlocking higher throughput without sacrificing decentralization.
3. Introduction of high-fee use cases: The rise of enterprise-grade applications, zk-rollup-based financial solutions, and the tokenization of real-world assets will drive high-value transactions that prioritize security and immutability, and thus are willing to pay Blob space fees.
By the end of 2025, we expect Blob space fees to exceed $1 billion, up from nearly negligible levels currently. This growth will solidify Ethereum's role as the final settlement layer for decentralized applications, while enhancing its ability to capture value from the rapidly expanding L2 ecosystem. Blob space will not only scale the network, but also become a significant revenue source for Ethereum, balancing the economic relationship between the mainnet and L2s.
8. DeFi Reaches Historic Highs: DEX Trading Volume Reaches $4 Trillion, TVL Reaches $200 Billion
DeFi Total Value Locked (TVL)
While Decentralized Exchange (DEX) trading volumes have reached new highs in absolute terms and as a proportion of Centralized Exchange (CEX) spot trading, the Total Value Locked (TVL) in Decentralized Finance (DeFi) remains 24% below its historical peak. We expect that by 2025, DEX trading volume will exceed $4 trillion, accounting for 20% of CEX spot trading volume, driven by the proliferation of AI-related tokens and the emergence of new consumer-facing dApps.
Furthermore, the influx of tokenized securities and high-value assets will become a catalyst for DeFi growth, bringing new liquidity and broader use cases to the ecosystem. As a result, we expect the DeFi Total Value Locked (TVL) to rebound to over $200 billion by year-end.
This growth not only reflects the resurgence of decentralized finance, but also marks its rising prominence in the global financial system. By introducing more user-friendly dApps and innovative financial tools, DeFi will attract new capital inflows and solidify its position as an alternative to traditional finance.
9. NFT Market Rebounds: Trading Volume Reaches $30 Billion
NFT Trading Volume Declines in 2024; We Expect a Rebound in 2025
The 2022-2023 bear market has severely impacted the NFT space, with trading volume declining 39% since 2023 and a staggering 84% drop compared to 2022. While Fungible Tokens have started to recover in 2024, most NFTs have continued to underperform, only seeing a turnaround in November as prices remained soft and activity levels were muted. Despite these challenges, some projects with strong community ties have thrived by transcending speculative value.
For example, Pudgy Penguins successfully transformed from a collectible to a consumer brand, while Miladys gained cultural influence in the realm of internet culture satire. 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 resurgence of crypto wealth, we expect new high-net-worth users to diversify into NFTs, not only as speculative investments, but also as assets with enduring cultural and historical significance. Established collections like CryptoPunks and Bored Ape Yacht Club (BAYC) will benefit from this shift, due to their strong cultural influence and relevance, even though their trading volumes remain 90% and 66% (in ETH terms) below their historical peaks, respectively. Meanwhile, other projects like Pudgy Penguins and Miladys have already surpassed their previous all-time highs.
Ethereum continues to dominate the NFT landscape, hosting the majority of the important collections. In 2024, Ethereum accounted for 71% of NFT trading share, and we expect this proportion to rise to 85% in 2025. This dominance is also reflected in the market capitalization rankings, with Ethereum-based NFTs occupying all of the top 10 positions and 16 out of the top 20, highlighting Ethereum's core role in the NFT ecosystem.
While NFT trading volume may not return to the frenetic highs of previous cycles, we believe a $30 billion annual trading volume is achievable, around 55% of the 2021 peak. The market is transitioning from speculative hype to sustainability and cultural relevance.
10. dApp Tokens Narrow the Performance Gap with L1 Tokens
In 2024, Layer 1 Tokens Outperform Major dApp Tokens by 2x
A persistent theme in the 2024 bull market has been the significant outperformance of Layer-1 (L1) blockchain tokens relative to decentralized application (dApp) tokens. For example, the MVSCLE index, which tracks smart contract platform tokens, has risen 80% year-to-date, while the MVIALE index for application tokens has only increased 35% over the same period.
However, we expect this dynamic to shift later in 2024, as the launch of a new wave of dApps will bring innovative and practical products, creating value for their associated tokens. Among the key thematic trends, we believe Artificial Intelligence (AI) is a standout category for dApp innovation. Additionally, Decentralized Physical Infrastructure Network (DePIN) projects also hold significant potential to attract investor and user interest, facilitating a broader rebalancing of performance between L1 tokens and dApp tokens.
This transition underscores the importance of utility and product-market fit in determining the success of application tokens in the evolving cryptocurrency landscape.
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