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 be an eventful one for the crypto sector. Since the approval of spot Bitcoin ETFs in January, the trend and sentiment in the crypto space has been almost entirely positive as Bitcoin price reached and exceeded $100,000 in 2024. While Ether ETFs produced a more muted price effect, they provided a positive much-needed clarity and an investment thesis to the market. In addition to crypto products approved after years of efforts and previous rejections, the TradFi sector continues to rely heavily on blockchain and tokenized payments. In particular, PayPal’s forays into the crypto payments space have accelerated as both merchants and individual account holders can now buy, sell and store cryptocurrencies in PayPal wallets.
In particular, the re-election of President Trump has given the crypto sector an additional boost, which is expected to continue to drive prices and the sector higher. After making significant overtures to the crypto sector during the campaign, highlighted by an appearance at Bitcoin 2024, speculation and discussions surrounding crypto policy initiatives have also increased as the inauguration approaches. Expectations are high for regulatory changes, crypto policy initiatives and the possibility that the US will establish a strategic Bitcoin reserve. Given these tailwinds – both those that have manifested and those that are expected to emerge – have set the crypto sector up for another dynamic year.
Let’s take a look at some predictions for crypto through 2025.
Bitcoin will surpass $150,000
Bitcoin continues to lead and dominate the crypto asset landscape, and given the positive momentum that has carried the token into 2024, it seems reasonable to predict that price action will continue its upward trend. Given that most of the price increases in 2024 occurred before the election results, this surge occurred even as the Biden administration and the SEC under Chairman Gensler continued to create an antagonistic environment for crypto investors and entrepreneurs. With the new Trump administration firmly in the pro-crypto camp and the prospect of a pro-crypto Congress being sworn in for the first time almost certain, prices for Bitcoin and other cryptoassets are likely to continue to rise.
State Bitcoin reserves
One of the Trump campaign’s most dazzling promises and commitments has spurred discussion about creating a strategic Bitcoin reserve. While the likelihood of a U.S. federal Bitcoin reserve remains somewhat uncertain given the political realities (of time) and the legitimate questions that need to be addressed regarding how such a reserve will operate and operate, a federal alternative could emerge sooner. Since both Pennsylvania and Texas have introduced legislation that would pave the way for such a reserve, the chances of individual states creating Bitcoin reserves continue to increase.
Crypto dollar plans will accelerate
Despite the focus on Bitcoin from a price and reserve perspective, the fact remains that the tokenization of the US dollar is virtually inevitable. Interestingly, the very fact that interest and investment in Bitcoin continues to grow will increase the likelihood that tokenization efforts around the US dollar will continue – for both economic and geopolitical reasons – in 2025. With over 80% of dollar transactions already virtual in nature, cryptocurrencies becoming an increasingly important issue for voters, and Bitcoin keeping cryptocurrencies at the top of the media agenda, tokenized dollars are coming sooner than some market watchers may think.
Rise of AI-powered crypto
As AI continues to surge in both investment amounts and investor interest, there are several ways this trend can also benefit the crypto sector. First, AI and Bitcoin miners can enter into partnerships to enable AI companies to use cheaper and/or renewable energy sources used by miners. Second, AI bots are almost ideal for crypto payments as they offer 24/7 availability, microtransactions, and the ability to customize payment options to suit different market needs. Finally, as cryptoassets continue to make inroads into traditional financial markets, it is logical that crypto markets – similar to TradFi markets – will also leverage AI and AI-related tools to increase efficiency and mass adoption.
Layer 2 applications will increase
As blockchain continues to be incorporated and incorporated into household name companies across various sectors of the economy, the numerous Layer 2 applications that have recently come to market have been a driving force in this adoption. Smart contracts also enable blockchains and the organizations using them to interact across different blockchains and legacy technology systems. Despite existing gaps in regulatory compliance, DeFi represents an innovative and flexible option for both companies and entrepreneurs looking to raise capital in a tokenized format. Finally, DAOs represent a unique way to create, manage and operate a business in an almost completely decentralized manner and have achieved some success in the market.
2024 was a jam-packed year for crypto, and 2025 is set to be even bigger.
