Source: Forbes
Author: Leeor Shimron
Compiled by: BitpushNews
2024 marks a historic turning point for Bitcoin and the broader cryptocurrency ecosystem. It was the year that the first Bitcoin and Ethereum ETFs came to market, signaling true institutional adoption. Bitcoin broke the $100,000 mark for the first time, while stablecoins continued to consolidate the dollar’s global dominance. Further fueling the momentum, the victorious U.S. presidential candidate made support for Bitcoin a core pillar of his campaign.
Collectively, these milestones solidify 2024 as the year the crypto industry proves itself to be an unstoppable force on the global stage. As the industry turns its focus to 2025, here are seven predictions for the big things that could happen next year.
The Trump administration’s proposal to establish a Strategic Bitcoin Reserve (SBR) for the U.S. has sparked much debate and speculation. While adding Bitcoin to the U.S. Treasury’s balance sheet would require considerable political will and congressional approval, the mere fact of proposing the initiative has far-reaching implications.
By signaling the possibility of an SBR, the United States is effectively inviting other major countries to consider similar initiatives. Game theory suggests that these countries may be incentivized to take preemptive action, potentially securing a strategic advantage in diversifying their national reserves before the United States does. Bitcoin’s limited supply and its emerging role as a digital store of value may heighten the urgency for countries to act quickly.
Now, a "who is the first" race is underway to see which major country will be the first to include Bitcoin in its national reserves, holding Bitcoin like gold, foreign exchange and government bonds, and diversifying its asset allocation. This move will not only consolidate Bitcoin's position as a global reserve asset, but may also reshape the international financial landscape and have a profound impact on the economic and geopolitical power structure. The establishment of strategic Bitcoin reserves by any major economy may mark the beginning of a new era of sovereign wealth management.
Stablecoins have become one of the most successful mainstream use cases for cryptocurrencies, building a bridge between the traditional financial and cryptocurrency ecosystems. Millions of people around the world use stablecoins for remittances, daily transactions, and to hedge against local currency fluctuations by leveraging the relative stability of the U.S. dollar.
Stablecoins in circulation reach an all-time high of $200 billion in 2024, with market leaders Tether and Circle. These digital currencies rely on blockchain networks such as Ethereum, Solana, and Tron to facilitate seamless, borderless transactions.
Looking ahead, stablecoin growth is expected to accelerate by 2025, potentially doubling to over $400 billion. This growth will be fueled by the passage of stablecoin-specific legislation, which could provide much-needed regulatory clarity and foster innovation in the industry. U.S. regulators are increasingly recognizing the strategic importance of stablecoins in strengthening the U.S. dollar’s global dominance and cementing its status as the world’s reserve currency.
Bitcoin is moving beyond its role as a store of value, with Layer 2 (L2) networks such as Stacks, BOB, Babylon, CoreDAO, etc. unlocking the potential of a thriving Bitcoin DeFi ecosystem. These L2s enhance Bitcoin’s scalability and programmability, enabling decentralized finance (DeFi) applications to flourish on the most secure and decentralized blockchain.
2024 is a year of transformation for Stacks, with the launch of the Nakamoto upgrade and sBTC. The Nakamoto upgrade allows Stacks to inherit 100% Bitcoin certainty and introduces faster block speeds, significantly improving the user experience. At the same time, the trustless Bitcoin-pegged asset sBTC launched in December enables seamless participation in DeFi activities such as lending, swapping, and staking - all based on the security of Bitcoin.
Previously, Bitcoin holders seeking DeFi opportunities were forced to move their Bitcoin to other networks such as Ethereum. This process relied on centralized custodians such as WBTC (BitGo), BTCB (Binance), and cbBTC (Coinbase), exposing users to centralization and censorship risks. Bitcoin L2 reduces these risks and provides a more decentralized alternative that allows Bitcoin to run natively in its own ecosystem.
Looking ahead to 2025, Bitcoin DeFi will grow exponentially. I predict that the total value locked (TVL) on Bitcoin L2 will exceed the $24 billion currently represented by wrapped Bitcoin derivatives, which is about 1.2% of the total Bitcoin supply. As Bitcoin's market cap reaches $2 trillion, the L2 network will enable users to unlock this huge potential value more securely and efficiently, solidifying Bitcoin's position as the cornerstone of decentralized finance.
The launch of spot Bitcoin ETFs marks a historic milestone, becoming the most successful ETF debut in history. These ETFs attracted more than $108 billion in assets under management (AUM) in their first year, demonstrating unparalleled demand from retail and institutional investors. Major players such as BlackRock, Fidelity, and Ark Invest have played a key role in bringing regulated Bitcoin exposure to traditional financial markets, laying the foundation for a wave of innovation in cryptocurrency-focused ETFs.
Following the success of Bitcoin ETFs, Ethereum ETFs have also been launched, providing investors with the opportunity to invest in the second largest cryptocurrency by market capitalization. Looking forward, I expect staking to be integrated into Ethereum ETFs for the first time in 2025. This feature will enable investors to earn staking rewards, further enhancing the appeal and utility of these funds.
ETFs for other crypto protocols such as Solana are expected to launch soon, as Solana is known for its high-performance blockchain, thriving DeFi ecosystem, and rapid growth in gaming, NFTs, and memecoins.
Additionally, we may see the launch of weighted crypto index ETFs designed to provide diversified exposure to the broader crypto market. These indexes may include the best performing assets such as Bitcoin, Ethereum, Solana, and emerging protocols, providing investors with a balanced portfolio to capture the growth potential of the entire ecosystem. Such innovations will make crypto investing more accessible, efficient, and attractive to a wide range of investors, further driving capital into the field.
The U.S. Financial Accounting Standards Board (FASB) has introduced fair value accounting rules for cryptocurrencies, which will take effect for fiscal years beginning after December 15, 2024. These new standards require companies to report their holdings of cryptocurrencies such as Bitcoin at fair market value, capturing gains and losses from market fluctuations in real time.
Previously, digital assets were classified as intangible assets, which forced companies to write down impairments while prohibiting the recognition of unrealized gains. This conservative approach often underestimated the true value of cryptocurrency assets on corporate balance sheets. The new rules address these limitations, making financial reporting more accurate and making cryptocurrency a more attractive asset for corporate finances.
The Big Seven — Apple, Microsoft, Google, Amazon, Nvidia, Tesla, and Meta — collectively have more than $600 billion in cash reserves, which provides them with great flexibility to allocate part of their capital to Bitcoin. As accounting frameworks strengthen and regulatory transparency increases, it is very likely that one of these tech giants, in addition to Tesla, will add Bitcoin to its balance sheet.
This move would demonstrate prudent financial management:
As new accounting rules take effect and corporate finances adapt, Bitcoin could become a key reserve asset for the world’s largest tech companies, further legitimizing their role in the global financial system.
In 2024, the total cryptocurrency market capitalization soared to an all-time high of $3.8 trillion, covering a wide range of use cases, including Bitcoin as a store of value, stablecoins, DeFi, NFTs, meme coins, GameFi, SocialFi, etc. This explosive growth reflects the industry's growing influence and the increasing adoption of blockchain-based solutions across different industries.
The influx of developer talent into the crypto ecosystem is expected to accelerate through 2025, driving the creation of new applications that will achieve product-market fit and attract millions of additional users. This wave of innovation could spawn breakthrough decentralized applications (dApps) in areas such as artificial intelligence (AI), decentralized finance (DeFi), decentralized physical infrastructure networks (DePIN), and other emerging areas that are still in their infancy.
Providing tangible utility and solving real-world problems, these transformative dApps will drive increased adoption and economic activity within the ecosystem. As the user base expands and capital flows into the space, asset prices will rise, pushing the overall market capitalization to unprecedented heights. With this momentum, the cryptocurrency market is expected to surpass $8 trillion, marking continued growth and innovation in the industry.
The U.S. crypto industry is on the verge of a transformative renaissance. SEC Chairman Gary Gensler’s controversial “enforcement regulation” approach, which stifled innovation and forced many crypto startups to move overseas, will end with his departure next January. His successor, Paul Atkins, brings a very different perspective. As a former SEC commissioner (2002-2008), Atkins is known for his pro-crypto stance, support for deregulation, and leadership in initiatives such as the pro-crypto advocacy group Token Alliance. His approach promises a more collaborative regulatory framework that promotes innovation rather than stifles it.
The end of “Operation Chokepoint 2.0,” a secretive program designed to restrict cryptocurrency startups’ access to the U.S. banking system, sets the stage for a cryptocurrency renaissance. By restoring fair access to banking infrastructure, the U.S. is creating an environment where blockchain developers and entrepreneurs can flourish without undue restrictions.
Regulatory Clarity: A shift in SEC leadership and a balanced regulatory policy will reduce uncertainty for startups and create a more predictable environment for innovation.
Access to capital and resources: As banking barriers are removed, cryptocurrency companies will have easier access to capital markets and traditional financial services, enabling sustainable growth.
Talent and Entrepreneurship: Reduced regulatory hostility is expected to attract top blockchain developers and entrepreneurs back to the U.S., thereby revitalizing the ecosystem.
Increased regulatory clarity and renewed support for innovation will also lead to a significant increase in token issuance within the U.S. Startups will have the ability to issue tokens as part of their fundraising and ecosystem-building efforts without having to worry about regulatory backlash. These tokens, which include utility tokens for decentralized applications and governance tokens for protocols, will attract domestic and foreign capital while encouraging participation in U.S. projects.
Looking ahead to 2025, it’s clear that the crypto industry is entering a new era of growth and maturity. With Bitcoin solidifying its position as a global reserve asset, the rise of ETFs, and the exponential growth of DeFi and stablecoins, the foundations for widespread adoption and mainstream attention are being laid.
Supported by clearer regulations and breakthrough technology, the crypto ecosystem is set to push boundaries and shape the future of global finance. These predictions highlight a year full of potential as the industry continues to prove itself to be an unstoppable force.
