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It has been a normal year for cryptocurrencies, which is explained by the meteoric rise of bitcoin. The world’s most sensible cryptocurrency rose from below $40,000 in January, stabilized around $60,000 in the summer, and then surpassed $100,000 this fall.
The real turning point, of course, came with the U.S. presidential election in November – an event that reshaped not just the political map but also the financial landscape.
Post-election enthusiasm, through pro-cryptocurrency policies and regulatory clarity, has propelled Bitcoin to a market capitalization of around $1. 96 trillion.
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This is a remarkable achievement for an asset that only existed for a while after Satoshi Nakamoto published the prominent whitepaper in October 2008.
One thing is clear: cryptocurrencies are evolving at a breakneck pace. The impulse is obvious. But uncertainties remain.
Looking ahead to 2025, the big question is, what’s next for bitcoin and the broader cryptocurrency ecosystem? Will bitcoin’s rally continue? Will altcoins rise to challenge its dominance?
Let’s take a look at some of the key trends that will affect the crypto landscape in 2025.
Multiple secular forces are driving bitcoin and the broader cryptocurrency market today.
First of all, bitcoin is the standard in terms of trust, brand and liquidity. Federal Reserve Chair Jerome Powell recently underscored this point, calling bitcoin “just like gold, only it’s virtual, it’s digital.”
This comparison says a lot about the development of bitcoin’s legitimacy in the monetary world.
Another transformative development is the advent of spot bitcoin ETFs. These exchange-traded funds have rapidly gained traction since their introduction in early 2024, shattering expectations by raising over $60 billion within nine months.
According to Matt Kaufman, Senior Vice President and Head of ETFs at Calamos Investments, “iShares and Fidelity Spot Bitcoin ETFs have seen the fastest expansion in history. This reflects the immense pent-up investor demand for this asset class.
One more key element fueling bitcoin’s rise is its fixed supply: The total number of BTC is capped in the original source code at 21 million. This built-in scarcity bolsters the value.
“A real-time surprise is underway as the steady supply of Bitcoin meets developing demand,” notes Anthony Rousseau, head of brokerage and product monitoring at TradeStation. “Many holders also remain reluctant to sell at existing levels. “
However, investors should be cautious. Bitcoin is a very volatile asset.
“People are chasing gains like it’s 2021 all over again,” says David Materazzi, CEO of Galileo FX. “Bitcoin, meme stocks, you name it. Everyone wants in on the action. It’s fun, I’ll give it that. But speculation works until it doesn’t.”
Ethereum (ETH) is the second-largest cryptocurrency by market capitalization, just behind bitcoin.
What makes Ethereum attractive is not just its stature. It is also distinguished by its role as a platform for the creation of decentralized programs (dApps), in spaces such as monetary services.
At its core is ether, the native token of ethereum, which serves as the fee for transactions on the platform.
“The institutional allocation disparity between Bitcoin and Ethereum is one of the most overlooked opportunities in the market today,” says Jesper Johansen, CEO and founder of Northstake. “When we look at the numbers (6% for bitcoin in ETFs compared to just 1. 9% for Ethereum) we see a gaping hole that is ripe for a correction. ”
“Institutional investors are realizing that Ethereum is not just another virtual asset,” Johansen observes. “It is a performance-generating instrument. In 2025 we will begin to see parity between ETH and BTC holdings. ”
Johansen points to staking as a major driver of ethereum’s upside potential. Staking allows investors to earn rewards or interest on their cryptocurrency holdings.
According to Johansen, the potential regulatory approval of staking-focused U.S. ETFs could significantly boost ethereum’s appeal.
“What makes gambling so attractive,” he explains, “is its ability to generate returns higher than those of classic savings accounts or fixed income bonds. “
The meteoric rise of crypto stocks has been one of the most electrifying stories on Wall Street in 2024.
Take Coinbase Global (COIN), for instance, whose shares have nearly doubled. And MicroStrategy (MSTR) is showing an eye-popping 500% surge year to date.
Still, there are few purely crypto stocks that can be traded on classic exchanges. But that could replace 2025 with a more welcoming initial public offering (IPO) environment.
President-elect Donald Trump’s selection of Paul Atkins to head the Securities and Exchange Commission (SEC) is expected to provide a significant boost to cryptocurrency IPOs.
Atkins is an advocate for cryptocurrencies and is expected to pave the way for smoother regulatory approval of new filings.
So what should we pay attention to in upcoming IPOs?
Circle Internet Financial, the second largest stablecoin issuer, is a competitor. Stablecoins are cryptocurrencies pegged to assets like the US dollar.
And Circle has already captured the market’s attention. Back in April 2022, the company raised $400 million, drawing support from heavyweights like BlackRock and Fidelity Management and Research.
Another standout is Kraken, a crypto trading platform with a client base exceeding 10 million. With projected 2024 revenues north of $1 billion, it’s a company primed to make waves in the public markets.
Tom Taulli has been developing software since the 1980s, when he was in high school. You have sold your apps to publications. While in college, he founded his first company, focused on developing online learning systems. He went on to found other companies, including Hypermart. net, which was sold to InfoSpace in 1996. At the same time, Tom wrote articles for online publications such as Bloomberg, Forbes, Barron’s, and Kiplinger. He has also written books, including Basics of Artificial Intelligence: A Non-Technical Introduction. He can be reached on Twitter at @ttaulli.