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In a recent report, Bitwise, the crypto exchange-traded fund (ETF) issuer and asset manager, announced bold predictions for Bitcoin and the broader crypto market through 2025, highlighting the key highlighted the outstanding performance of virtual currencies.
A brilliant year for Bitcoin and major cryptocurrencies
Bitcoin hit an all-time high of $104,000 at the beginning of the month, marking a staggering 141.72% year-to-date gain, largely due to the historic Bitcoin Spot ETF launch in the US. His total assets reached $33.56 billion. .
Other cryptocurrencies also showed impressive gains. Solana (SOL) rose 127.71%, XRP surged 285.23%, and Ethereum (ETH) rose 75.77%.
Notably, crypto-related stocks such as MicroStrategy and Coinbase also showed notable gains of 525.39% and 97.57%, respectively.
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In addition to the price increase, Bitwise points out that the regulatory environment for cryptocurrencies has also improved significantly. The 2024 US election saw a crypto-friendly candidate win, boosting prospects for the industry.
President-elect Donald Trump further contributed to the current upward trend by embracing cryptocurrencies on the campaign trail, pledging to establish a strategic Bitcoin reserve and reform the U.S. Securities and Exchange Commission (SEC).
President Trump's nomination of Scott Bessent as Treasury Secretary, who previously described cryptocurrencies as a means of freedom, further signals a change in the regulatory environment.
Optimistic predictions for 2025
Looking to the future, the team at Bitwise is enthusiastic about ushering in what they call the “Golden Age of Cryptocurrency.” Their predictions are based on several key factors, including increased adoption by institutions, advancements in blockchain technology, and expected global stimulus from major central banks.
The report specifically predicts that the “Great Three” – Bitcoin, Ethereum, and Solana – will continue to outperform traditional asset classes.
In 2024, these cryptocurrencies significantly outperformed the S&P 500's return, returning 28.07%, gold at 27.65%, and bonds at just 3.40%. Bitwise expects this momentum to continue into 2025, with all three assets hitting new all-time highs.
The study points to continued demand for Bitcoin due to capital injections into Bitcoin ETFs, as well as an impending decline in supply due to the April 2024 halving.
This halving event is intended to reduce new Bitcoin issuance and increase scarcity. Bitwise predicts that if the US government follows through with its proposal to establish a 1 million Bitcoin strategic reserve, the price of Bitcoin will skyrocket to $200,000, or perhaps even $500,000.
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Despite its strong performance in 2024, Ethereum faces hurdles as investor attention shifts to Bitcoin and the rapidly growing blockchain. However, Bitwise predicts that the Ethereum story will change in 2025.
They believe that Layer 2 (L2) solutions such as Base and Starknet will see a dramatic increase in activity, as well as an increase in inflows to spot Ethereum ETFs. The rise of stablecoins and tokenization projects on Ethereum is also expected to pique investor interest. The company predicts that the major altcoins in the market will rise significantly towards an all-time high of $7,000.
Meanwhile, Solana is known for its quick recovery after the market crash in 2022, and is expected to perform well in 2025 as well. The study attributes Solana's 2024 surge to the meme coin frenzy, as well as the GameStop trading drama.
Going forward, Bitwise expects projects to continue to migrate to the Solana network and expand its ecosystem beyond meme coins. Bitwise is forecasting a significant rally, almost tripling its current price record to a new high of $750 per SOL.
The daily chart shows that the price of BTC is below the $100,000 mark. Source: BTCUSDT on TradingView.com
At the time of writing, Bitcoin is trading at $96,000, while Ethereum and Solana have consolidated around $3,662 and $218, respectively.
Featured image from DALL-E, chart from TradingView.com
