Cryptocurrencies are set to make a strong comeback in 2024, with 2025 promising to continue the trend. The cryptocurrency winter is over, as is the decline of the cryptocurrency empire and the courtroom dramas. Survivors have weathered the storm and are now entering 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 cryptocurrency research firm K33 Research, as of December 16th, the assets under management of Bitcoin ETFs in the U.S. reached $129 billion, surpassing the $125 billion of gold ETFs.
The post-U.S. election market excitement, combined with Donald Trump’s promise to make the U.S. the “world capital of cryptocurrencies” and establish a strategic Bitcoin reserve, caused the price of Bitcoin to surpass $100,000.
Solana is experiencing development opportunities thanks to the rise of meme coin speculation and new narratives such as DePIN. DePIN is a network that 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 success in the mainstream market. A new wave of “degens” is betting on tokens like fartcoin and dogwifhat, both of which currently have market values exceeding $1 billion.
Rob Hadick, a general partner at Dragonfly, a cryptocurrency venture capital firm based in San Francisco, said, “This year, cryptocurrencies have entered the mainstream consciousness in ways not seen before in 2021. It is now a sustainable long-term asset class that will have a voice and play an important role.” He added, “If you just look at the impact of cryptocurrencies on elections, whether it’s cryptocurrency political donations or their promotion among legislators and presidential candidates, it’s unprecedented. This is a major step towards cryptocurrency legalization.”
With Trump and a group of cryptocurrency-friendly officials preparing to take office, the so-called “golden age of cryptocurrencies” has arrived. Here are some emerging trends:
New highs and the U.S. Bitcoin reserve
The art of bold price predictions is back in vogue. Cryptocurrency asset management company Bitwise predicts that if the U.S. establishes a strategic reserve similar to oil or gold, the price of Bitcoin could reach $200,000, or even $500,000. The logic is that the U.S. official Bitcoin reserve will trigger global FOMO.
In July, Trump proposed using 200,000 seized Bitcoins (worth $21 billion) from criminals to kickstart the reserve. However, the legal path is still unclear, whether it requires congressional approval or if the executive branch can take action unilaterally.
Senator Cynthia Lummis, a supporter of cryptocurrencies, proposed a reserve program operated by the Treasury Department in July. Skeptics believe that Bitcoin’s volatility could disrupt financial stability. Trump has remained silent on whether the U.S. will continue to purchase more Bitcoin on the open market, adding another layer of uncertainty.
Resetting cryptocurrency regulation: a friendly Washington
The new administration is expected to be the most cryptocurrency-friendly government to date. Some key government appointments related to cryptocurrencies include:
Securities and Exchange Commission (SEC): Paul Atkins, a former SEC commissioner and cryptocurrency supporter, is set to replace cryptocurrency adversary Gary Gensler, who was known for his lawsuits and enforcement actions against cryptocurrency companies.
Commodity Futures Trading Commission (CFTC): Brian Quintenz, the policy chief at Andreessen Horowitz and former CFTC commissioner, is a top candidate to lead the agency.
Department of the Treasury: Scott Bessent, a billionaire hedge fund manager and Bitcoin advocate, is Trump’s pick for Treasury Secretary.
Department of Commerce: Howard Lutnik, CEO of Cantor Fitzgerald (the primary custodian of Tether’s USDT reserves), will lead the department.
Artificial Intelligence and Cryptocurrency Czar: David Sacks, a long-time venture capitalist who previously worked with Elon Musk at PayPal, will oversee two key areas of Trump’s strategy to enhance national competitiveness.
House Financial Services Committee: Republican Congressman French Hill from Arkansas, together with outgoing committee chairman Patrick McHenry, advocates for cryptocurrency-friendly legislation. Hill plans to prioritize the cryptocurrency market structure bill within the first 100 days and investigate the so-called “Choke Point 2.0,” which many believe unfairly targeted the cryptocurrency industry through de-banking practices.
“This is a real opportunity to shape good policies for the industry,” said Kristin Smith, CEO of the Blockchain Association, a Washington, D.C.-based association representing over 100 cryptocurrency companies. “The White House has indicated that this is a priority. I think we’ll see a coordinated effort across government agencies, legislation promoting market structure and stablecoins, and a significant shift of innovation returning to the U.S.,” she added.
New cryptocurrency IPOs and venture capital influx
The process of cryptocurrency IPOs is heating up. Bitwise lists five companies that may go public next year:
Circle: The issuer of the second-largest stablecoin, USDC, secretly applied for an IPO in January of this year.
Figure: The company is known for blockchain-based financial services such as mortgage loans, personal loans, and asset tokenization and has been exploring going public since last year.
Kraken: The U.S.-based cryptocurrency exchange has been considering an IPO since 2021.
Anchorage Digital: With its status as a federal charter bank, it may pave the way for an IPO.
Chainalysis: A leader in blockchain compliance and intelligence services, it is expected to go public.
In addition, Hadick from Dragonfly said, “I expect the LP (limited partners of cryptocurrency venture capital firms) market to improve, with more funds wanting to invest in cryptocurrencies. Many traditional Web2 crossover funds will return to the Web3 space. We’ve already seen this trend in certain areas like stablecoins and payments.” He added that venture capital deals often lag behind public market price increases by one or two quarters.
Cryptocurrency-related companies included in major stock indices
MicroStrategy’s stock price has risen over 400% this year. With new accounting rules allowing companies to reflect their Bitcoin investments in their financial statements, MicroStrategy has become a component of the Nasdaq 100 index, and analysts predict that the company will soon be included in the S&P 500 index.
This change could allow MicroStrategy to enter index-tracking funds and join the portfolios of countless U.S. investors. Michael Saylor, co-founder and CEO of MicroStrategy, with his “Bitcoin treasury” strategy (selling bonds and stocks to accumulate Bitcoin), has propelled the $86 billion company into the top 100 companies of the S&P 500 index.
Analysts also suggest that Coinbase, which has risen 70% this year, may join this coveted index.
Stablecoin surge
With the highly anticipated stablecoin legislation set to be introduced in the U.S., the stablecoin industry is expected to experience explosive growth, with a market value doubling to $400 billion. According to Bitwise, stablecoin trading volume is projected to reach $8.3 trillion in 2024, almost equal to Visa’s $9.9 trillion in payment volume.
Tether and Circle still dominate the market. However, Hadick warns that if they continue to operate as asset management companies rather than payment companies, their growth may quickly stagnate.
Stripe’s $1.1 billion acquisition of stablecoin platform Bridge in October sent a message: stablecoins could become the cornerstone of fintech. Stripe calls it the “superconductor of financial services” and touts its unparalleled speed, low cost, and global impact. Robinhood is also following suit, exploring the creation of a global stablecoin network.
Meanwhile, the next generation of “stablecoin 2.0” models is quietly emerging. Ceteris, director of research at Delphi Digital, a New York-based cryptocurrency research firm, explains, “There are many new stablecoin models that incentivize token holders or actual users of applications with revenue sharing. 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 artwork, everything could soon have tokens. The biggest advantage of tokenization is instant settlement, lower costs compared to traditional securitization, 24/7 liquidity, and transparency.
Three years ago, the cryptocurrency industry tokenized only $2 billion of real-world assets (RWA), including private credit, U.S. debt, commodities, and stocks. Today, that number has grown to nearly $14 billion. Venture capital firm ParaFi predicts that the market size of tokenized RWA could soar to $2 trillion by 2030, signaling a significant shift in asset ownership and trading.
New applications and better infrastructure
The buzzword at the end of 2024 is AI agents. Get ready for the convergence of artificial intelligence and cryptocurrencies, a fusion that resembles science fiction.
This trend is already beginning to show. Take TruthTerminal, for example. This AI agent not only received $50,000 from Marc Andreessen but also became a millionaire through X social media. Its success came from promoting a token based on an early 2000s meme (the anonymous creator of the token transferred a large sum of money to TruthTerminal’s wallet, managed by Andy Ayrey).
But analysts remain cautious. Practical AI agents (such as those attempting to execute complex transactions across blockchains on behalf of users) are few and still in the early stages. “The excitement around agents is because they’re so novel,” said Ceteris from Delphi. “But for better or worse, it may be the biggest bubble of this cycle.”
Despite the fragmented nature of the blockchain industry, with most decentralized applications (dApps) still not mainstream, the work of building strong infrastructure continues. Ceteris explains, “Solana has set the trend for high-throughput blockchains and almost every new chain is launching under this trend, resulting in a lot of cheap blockchain space.”
So, the narrative of cryptocurrencies has shifted from survival to prosperity. This is just a part of the surprises that may come next year. You can choose to prepare popcorn for this show or open your wallet for this opportunity. Caution is essential as the market will experience highs and lows. And this time, the stakes seem higher than ever before.
This article is a collaboration from DeepChain.