2025 is set to be another busy year for the crypto sector
As the calendar turns from 2024 to 2025 the past year will undoubtedly go down as an eventful one for the crypto sector. Beginning in January with the approval of spot bitcoin ETFs the trend and sentiment for the crypto space has been almost universally positive as the price of bitcoin reached and exceeded the $100,000 mark in 2024. Ether ETFs, although generating a more muted price effect, have provided much needed clarity and an investment thesis for the market. In addition to the crypto products that were approved following years of effort and previous denials, the TradFi sector has continued to embrace blockchain and tokenized payments in a major way. Specifically the forays by PayPal into the crypto payment space have accelerated, with now both merchant and individual account holders able to buy, sell, and hold cryptocurrencies in PayPal wallets.
Notably the re-election of President Trump also added an additional leg up to the crypto sector that looks set to continue propelling prices and the sector higher. After making significant overtures to the crypto sector during the campaign, highlighted by a appearance at Bitcoin 2024, the speculation and discussion related to crypto policy initiatives have also increased as the inauguration approaches. Expectations have been set high for regulatory changes, crypto policy initiatives, and the possibility that the U.S. will establish a strategic bitcoin reserve. Given these tailwinds, both those that have manifested and those that are expected to do so, have prepared the crypto sector for another dynamic year.
Let’s take a look at some predictions for crypto going into 2025.
Bitcoin Will Exceed $150,000
Bitcoin continues to lead and dominate the cryptoasset landscape, and given the positive momentum that has carried the token through 2024 it seems reasonable to forecast that the price trajectory will continue its upward direction. Given that most of the price increases that occurred in 2024 happened prior to the election results this increase occurred even with the Biden administration and the SEC under chairperson Gensler continuing to create an antagonistic environment for crypto investors and entrepreneurs. With the incoming Trump administration decidedly in the pro-crypto camp, and the prospect of a pro-crypto Congress being sworn in for the first time almost assured, prices of bitcoin and other cryptoassets look set to continue moving upwards.
State Based Bitcoin Reserves
One of the most scintillating promises and pledges made by the Trump campaign has spurred conversation about the creation of a strategic bitcoin reserve. While the likelihood of a U.S. bitcoin reserve at the federal level remains somewhat uncertain, given the political realities (time) and legitimate questions that need to be addressed as to how such a reserve would operate and function, a state-based alternative might come to market sooner. With both Pennsylvania and Texas having put forward legislation that would pave the way for such a reserve, the odds of individual states creating bitcoin reserves continue to increase.
Crypto Dollar Plans Will Accelerate
Despite the focus on bitcoin from a price and reserve oriented perspective the fact remains that the tokenization of the U.S. dollar is virtually inevitable. In an interesting twist the very fact that interest and investment in bitcoin continues to increase will actually make it more likely that tokenization efforts around the U.S. dollar – both for economic and geo-political benefits – will continue in 2025. With over 80% of dollar transactions already virtual in nature, crypto increasingly representing an important issue for voters, and bitcoin keeping crypto top-of-mind in the media, tokenized dollars are coming sooner than some market watchers might think.
Rise of AI-Enabled Crypto
With AI continuing to surge in terms of both investment dollars and investor interest there are several ways in which this trend can also benefit the crypto sector. First, AI and bitcoin miners can form partnerships to enable AI firms to make use of cheaper and/or renewable energy sources used by miners. Second, AI bots are an almost ideal fit for crypto payments, with both enabling 24/7/365 up time, microtransactions, and the ability to scale payment options to fit various market needs. Lastly, as cryptoassets continue to make inroads into traditional financial markets it logically makes sense that – similar to TradFi markets – crypto markets will also make use of AI and AI-adjacent tools to drive efficiencies and mass adoption.
Layer-2 Applications Will Grow
As blockchain continues to be onboarded and integrated within corporations with household names across various sectors of the economy a driving force in this adoption has been the multiple Layer-2 applications that has more recently come to market. Smart contracts also allow blockchains as well as the organizations using to interoperate across different blockchains as well as legacy technology systems. DeFi, despite existing gaps in regulatory compliance, presents an innovative and flexible opportunity for both firms and entrepreneurs seeking to raise capital in a tokenized format. Lastly DAOs represent a unique opportunity to found, manage, and run a business enterprise in an almost completely decentralized manner and have achieved some success in the marketplace.
2024 was a jam-packed year for crypto, and 2025 is setting up to be even bigger.
