Crypto bulls remain strongly optimistic for 2025

As cryptocurrency traders take a breather at the end of year, the overall outlook for the sector remains highly bullish, experts say.

The biggest boost to cryptocurrency in 2024 has been US president-elect Donald Trump’s announcement of a bitcoin strategic reserve, and the gradual green light for bitcoin exchange traded funds by the worlds major market regulators.

On Tuesday, bitcoin rose 2 per cent to $93,848, well below the record high of $108,379.28 it touched on December 17, Reuters reported. The world’s best known and biggest cryptocurrency is set for a bumper 120 per cent rise for the year, and analysts say $150,000 is not far away.

Crypto markets have exhibited a strong performance this year, supported by strong ETF inflows and various fundamental positives. Ethereum was up 50 per cent YTD, while Bitcoin rallied 127 per cent YTD, reaching an all-time high of $108,000 in December. The move was driven by immense ETF inflows, valued at $913 billion this year. Moreover, interest rate cuts, Trump’s victory, Bitcoin halving, and anticipation of the Ethereum upgrade further provided tailwinds for cryptocurrencies.

Research from crypto.com shows the total cryptocurrency market cap increased during 2024 to reach $3.9 trillion, a 127 per cent growth year-on-year and as of November 2024, the number of crypto owners has reached 653 million. Depending on market conditions, the number of global crypto owners is likely to reach 750-900 million in 2025, crypto.com predicts.

“In 2025, we expect cryptocurrency to make strong inroads to becoming a mainstream asset class within the traditional finance ecosystem. This is in part due to a pivotal shift for Bitcoin in 2024, from a digital currency with a 15-year history for cryptocurrency enthusiasts to an institutional-grade asset, tradeable as a regulated financial product. Bitcoin reaching $100,000 in 2024 was not just an exciting moment for Bitcoin, but a milestone moment for the entire crypto industry — once again proving its resilience,” Tarik Erk, General Manager Middle East & Africa, crypto.com, said.

“Cryptocurrencies have been boosted by the re-election of Donald Trump, with markets feeling optimistic about his support for digital assets. Trump aims to make the US a crypto capital and wants to create a Bitcoin reserve. He also plans to ease regulations on the crypto market, which could create further growth opportunities for the asset. His approach, along with the Republican Party’s pro-crypto stance, signals a shift toward greater acceptance of cryptocurrencies,” said Vijay Valecha, chief investment officer, Century Financial.

Many expect that by 2025, new laws will modernise the US financial system to better include cryptocurrencies. One of these could give the Commodity Futures Trading Commission (CFTC) more power to regulate crypto, reducing the SEC’s role. “This shift could be good for the future of cryptocurrencies and for companies involved in the crypto industry. If the SEC eases its strict rules on cryptocurrencies, it could make things easier for crypto investors and businesses,” Valecha said.

Since Bitcoin ETFs launched in January, they’ve already seen over $500 billion in daily trading volume and $36 billion in net inflows, with BlackRock’s iShares Bitcoin Trust being a standout success. “Bitcoin ETFs are expected to attract more flows in 2025 for three key reasons: the first years are typically the slowest for ETFs, large powerhouses like Morgan Stanley, Merrill Lynch, etc. are expected to come up with their own ETFs, and investors will gradually increase their allocation,” Valecha said.

The launch of Bitcoin ETF options this year is a big step for cryptocurrencies as it may lead to reduced volatility, boosting investor confidence and creating positive price momentum. “As more crypto ETFs, beyond Bitcoin and Ether, are expected to launch under Trump’s administration, the category could see even larger amounts of assets under management (AUM), especially with growing investor interest, a more stable trading environment, and lower absolute values associated with ETFs,” Valecha said.

In 2025, the industry will watch a few key areas: SAB 121, stablecoins, greater regulatory openness to digital asset innovation, and movement around a US strategic Bitcoin reserve. Crypto mining companies like Riot, Mara, Coinbase, and CLSK are also expected to benefit from proposed deregulations, analysts say.

Increased adoption of cryptocurrencies is expected by corporations that could use this technology to innovate and establish their position in the market. “This can be seen from MicroStrategy Inc., the largest corporate holder of Bitcoin, which has integrated crypto into its portfolio and could potentially merge the financial technology in the gaming world,” Valecha said.

The trends for 2025 suggest that cryptocurrencies are expected to become a key part of the finance and technology sectors. Additionally, the establishment of clear rules and fair enforcement could enhance trust, attract retail and institutional players, and promote sustainable growth for cryptos in the long term, Leung said.