Author: Matthew Sigel & Patrick Bush
Compiled by: TechFlow
Please note that VanEck may hold the digital assets mentioned below.
Before 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, we self-scored an 8.5/15. While a 56.6% accuracy rate is not perfect, it was enough to keep us "in the game." With Bitcoin (BTC) breaking $100,000 and Ethereum (ETH) surpassing $4,000, 2024 was a memorable year in crypto history, even if some of our predictions did not fully materialize.
2024 Prediction Review
In our 2024 predictions, we successfully captured several key trends, including:
- The launch of the first Bitcoin spot ETPs
- The successful completion of the Bitcoin halving
- Ethereum remaining the second-largest, after Bitcoin
- Bitcoin reaching a new all-time high in Q4 2024
- L2s dominating Ethereum activity (but L2 TVL still below Ethereum)
- Stablecoin market cap reaching a new high
- DEX trading volume reaching a new record percentage
- Solana (SOL) outperforming Ethereum (ETH)
- Increased adoption of DePIN networks
While some predictions did not fully materialize, the overall trends still validated our analytical direction.
Top 10 Crypto Predictions for 2025
- The crypto bull market will reach a mid-cycle peak in Q1 and a new high by year-end
- The US further embraces Bitcoin through strategic reserves and policy support
- The total value of tokenized securities surpasses $50 billion
- Stablecoins reach $300 billion in daily settlement volume
- On-chain activity by AI agents exceeds 1 million
- The total value locked (TVL) in Bitcoin Layer 2 networks reaches 100,000 BTC
- Ethereum's Blob space fee revenue reaches $1 billion
- DeFi trading volume sets a new high of $4 trillion, with a TVL of $200 billion
- The NFT market rebounds, reaching $30 billion in annual trading volume
- Decentralized application (DApp) tokens start to catch up to mainstream L1 tokens
Next, we will dive deeper into the background and rationale 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 this cycle's apex, we expect Bitcoin (BTC) to reach around $180,000, while Ethereum (ETH) will 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 deeper 60% drawdowns, reflecting market consolidation over the summer. However, a recovery is likely in the fall, with major tokens regaining momentum and breaking new highs before year-end. To time the approach of the market top, we will be watching for the following key signals:
- Sustained high funding rates: When traders are willing to pay over 10% funding rates for 3 months or more to borrow and long BTC, it indicates speculative froth.
- Excessive unrealized profits: If a large proportion of BTC investors are in significant paper gains (profit-to-cost ratios of 70% or higher), it signals a manic market state.
- High market cap relative to realized value: When the MVRV (market cap to realized value) score exceeds 5, it means BTC price is far above average purchase price, typically indicating overheating.
- Declining Bitcoin dominance: If Bitcoin's share of the total crypto market cap falls below 40%, it means speculative capital is flowing into higher-risk Altcoins, a late-cycle behavior.
- Mainstream speculation: When non-crypto friends start inquiring about dubious projects, it's usually a reliable signal of market top proximity.
These indicators have historically been reliable signals of market mania, and they will guide our outlook through 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 numerous 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 signal the end of anti-crypto policies (such as systematic de-banking of crypto firms), 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 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 crypto, 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's Exchange Stabilization Fund (ESF), although bipartisan legislation remains an unknown. 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 at seven), driven by the increasing adoption of crypto by BRIC nations. This trend is further propelled by Russia's stated plans to use crypto 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 share of global crypto developers will rise from 19% to 25%. Meanwhile, 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 position in the global Bitcoin economy.
US-listed companies' share of Bitcoin computing power 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 traded 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 surpass Satoshi's 1.1 million BTC holdings next year. This means that corporate Bitcoin holdings will see a significant 43% growth in the next year.
Gold and Bitcoin ownership: Growth potential for enterprises and governments
3. The value of tokenized securities exceeds $50 billion
On-chain securities grow 61% in 2024
On-chain securities grew 61% in 2024
The infrastructure of cryptocurrencies 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 semi-permissioned blockchain Provenance.
Going forward, we see tremendous potential for tokenized securities to be launched on public blockchains. 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-loop 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 volume
Stablecoin transfers (USD) grow 180% YoY in 2024
Source: Artemis XYZ, data as of December 6, 2024.
Past performance does not guarantee future results.
Stablecoins will transition from a niche role in cryptocurrency trading to become 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 current DTCC trading volume, up from around $100 billion in daily settlement in November 2024. With adoption by major tech companies like Apple and Google, as well as payment networks like Visa and Mastercard, stablecoins will redefine the economics of payments.
Beyond transactions, the remittance market is also poised for 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. While blockchain adoption remains debated, stablecoins are effectively the "Trojan horse" of blockchain technology.
5. On-chain activity of AI agents exceeds 1 million agents
AI agents generate $8.7 million in total revenue in 5 weeks
Source: Dune @jdhpyer, data as of December 6, 2024.
Past performance does not guarantee future results.
We believe AI Agents are 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 "maximize profits" or "boost 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 providers, and model developers), enabling ordinary users to create their own agents. This model will lead to the emergence of a multitude of agents, whose creators can rent them out to generate income.
While the current focus of agent building is in DeFi, we believe AI Agents will transcend financial activities. These agents can be used as social media influencers, 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 emerge by 2025.
6. Bitcoin Layer 2 (L2) networks reach a total value locked (TVL) of 100,000 BTC
Bitcoin L2 TVL reaches 30,000 BTC, growing 600% YoY in 2024
Source: Defillama, data as of December 6, 2024.
Past performance does not guarantee future results. The securities mentioned do not constitute a recommendation to buy or sell.
We are closely watching 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 mainchain. 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 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 mainchain, reducing the dependence on centralized intermediaries. While liquidity constraints and adoption barriers still exist, Bitcoin L2s are poised to improve security and decentralization, giving BTC holders greater confidence to actively participate in the decentralized ecosystem.
As shown in the chart, Bitcoin L2 solutions experienced explosive growth in 2024, with a 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 Blob space generation on Ethereum
Source: Dune @hildobby, data as of December 6, 2024.
Past performance does not guarantee future results.
The Ethereum community is actively discussing whether its Layer-2 (L2) networks can provide sufficient value to the Ethereum mainnet through Blob space. Blob space is a key component of Ethereum's scaling roadmap, where as a dedicated data layer, L2s can submit compressed versions of their transaction histories to Ethereum and pay ETH fees per Blob. While this architecture supports Ethereum's scalability, the value currently paid by L2s to the mainnet is relatively low, 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 Blob space growth has recently slowed, we expect its usage to increase significantly by 2025, driven by three main factors:
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 demand for Blob space.
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.
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 virtually negligible levels currently. This growth will solidify Ethereum's role as the final settlement layer for decentralized applications, while also 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 New Highs: DEX Trading Volume Hits $4 Trillion, TVL Reaches $200 Billion
DeFi Total Value Locked (TVL)
Source: Defillama, data as of December 6, 2024.
Past performance does not guarantee future results.
While Decentralized Exchange (DEX) trading volumes have reached new highs in both 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, driven by the proliferation of AI-related tokens and the emergence of new consumer-facing dApps.
Additionally, the influx of tokenized securities and high-value assets will act as a catalyst for DeFi growth, bringing new liquidity and broader use cases to the ecosystem. As a result, we forecast 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 ascension within 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
2024 NFT Trading Volume Declined; We Expect a Rebound in 2025
Source: Data as of December 6, 2024.
Past performance does not guarantee future results. The securities mentioned do not constitute a recommendation to buy or sell.
The 2022-2023 bear market has severely impacted the NFT space, with trading volume declining 39% since 2023 and a staggering 84% drop from the 2022 peak. While Fungible Tokens have started to recover in 2024, most NFTs have continued to underperform, only seeing a turnaround in November after prolonged price weakness and low activity. Despite these challenges, some projects with strong community ties have bucked the trend 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 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, given their strong cultural influence and relevance, despite their trading volumes still being 90% and 66% (in ETH terms) below their historical peaks. 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 volume, and we expect this share 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 an annual trading volume of $30 billion 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 Gap with L1 Tokens
In 2024, Layer 1 Tokens Outperformed Major dApp Tokens by 2x
Source: Market Vectors, data as of December 8, 2024.
Past performance does not guarantee future results. The MVSCLE index tracks smart contract platforms, and the MVIALE index tracks infrastructure application tokens.
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 platforms, has risen 80% year-to-date, while the MVIALE index, which tracks application tokens, has only gained 35% over the same period.
However, we expect this dynamic to shift in the latter part of 2024, as the launch of a wave of new 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.
