Cryptocurrencies make a strong comeback in 2024, continuing their glory in 2025.
Author: Nina Bambysheva
Source:Forbes
Translated by: Luffy, Foresight News
Is the crypto winter over? Yes. The fall of the crypto empire and the courtroom drama? They are now a thing of the past. The survivors? Battle-tested, with a keen vision, as if this were 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 following the U.S. election, coupled with Donald Trump's promise to make America the "global crypto capital" and establish a strategic Bitcoin reserve, has seen Bitcoin prices briefly surpass $100,000.
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 exceeding $1 billion.
Rob Hadick, a general partner at San Francisco-based crypto venture capital firm Dragonfly, says: "This year, crypto 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." "If you just look at the impact of crypto on elections, whether it's crypto political donations or its promotion among legislators and presidential candidates, this is unprecedented, and it's a major step towards the legitimization of crypto."
With Trump and a cadre of crypto-friendly officials preparing to take office, the "golden age of crypto" that industry insiders speak of is upon us. Here are the emerging trends:
New 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 an official U.S. Bitcoin reserve would trigger global FOMO.
Trump proposed at the Nashville Bitcoin conference in July to use the 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 proposed a Treasury-operated reserve scheme 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 crypto-related government appointments include:
1. 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.
2. CFTC: Andreessen Horowitz policy chief and former CFTC Commissioner Brian Quintenz is a frontrunner to lead the agency.
3. Treasury: Hedge fund billionaire and Bitcoin proponent Scott Bessent is Trump's pick for Treasury Secretary.
4. Commerce: Cantor Fitzgerald (the primary custodian of Tether's USDT reserves) CEO Howard Lutnik will head the department.
5. 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.
6. House Financial Services Committee: Arkansas Republican Congressman 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", which many believe unfairly targeted the crypto industry through de-banking practices.
"This is a real opportunity to craft good policy for the industry," says Kristin Smith, CEO of the Blockchain Association, which represents over 100 crypto 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 VC Capital Inflows
The crypto IPO pipeline is heating up. Bitwise lists five companies that could go public next year:
1. Circle: The issuer of the second-largest stablecoin USDC, which secretly filed for an IPO in January.
2. Figure: Known for its blockchain-based financial services like mortgage lending, personal loans, and asset tokenization, it has been exploring a listing since last year.
3. Kraken: The U.S.-based crypto exchange's IPO plans can be traced back to 2021.
4. Anchorage Digital: Its status as a federally chartered bank may pave the way for a listing.
5. Chainalysis: The blockchain compliance and intelligence leader is expected to go public.
Additionally, Dragonfly's Hadick says: "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 adds that venture deal flow often lags public market price appreciation by a quarter or two.
Crypto-Related Firms Joining 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 balance sheets, 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 see MicroStrategy enter index-tracking funds, joining the portfolios of 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, stablecoin trading volume could reach $8.3 trillion in 2024, nearly matching Visa's $9.9 trillion in payments.
Tether and Circle still dominate. However, Hadick warns that if they continue to operate like asset management companies rather than payment companies, their growth may stall quickly.
In October, Stripe spent $110 million to acquire the stablecoin platform Bridge, sending a message that stablecoins could become the foundation of fintech. Stripe calls it the "superconductor of financial services" and touts its unparalleled speed, low cost, and global reach. Robinhood has also followed suit, exploring the creation of a global stablecoin network.
Meanwhile, a new generation of "stablecoin 2.0" models is quietly emerging. Ceteris, the research lead at Delphi Digital, a New York-based crypto analytics firm, explains: "There are many new stablecoin models that are starting to pay revenue 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, that number is close to $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. Get ready to witness the convergence of artificial intelligence and cryptocurrencies, which is closer to science fiction.
This trend is already showing early signs. For example, TruthTerminal, an AI agent, not only received $50,000 from Marc Andreessen but also became a millionaire by leveraging X social media to promote 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 trying to execute complex cross-blockchain transactions 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, with most decentralized applications still not mainstream, the work of building robust infrastructure continues. Ceteris explains, "Solana has set the trend for high-throughput blockchain eras, 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 the show, or take out your wallet for the opportunity. Caution is essential, as the market will experience highs and lows. And this time, the stakes seem higher than ever before.
