These are the predictions of Bitwise for 2025
Bitcoin surpassed the €100,000 mark this week reaching a new milestone in the crypto market. In other news, altcoins are experiencing a healthy reset, while expert Bitwise is predicting a bullish future. What does this mean for the crypto market? Find out it in this week's Bitvavo Market News.
Market update
Late Sunday night into early Monday morning, Bitcoin's price reached the impressive €100,000 mark for the first time, representing a significant milestone long-term investors have looked forward to for years. This marks a 64% increase since the rally began on November 4.
Following the initial rapid rise in early November (1), Bitcoin's price has been creeping up much more slowly (2), averaging an increase of €500 a day. Around the $100,000 dollar level, there is both significant demand and a strong supply.
On-chain data tells us that in recent weeks 30,000 Bitcoin worth of daily profits is being realized by existing investors. Despite this, the price continues to rise, indicating robust demand. On a net basis, an impressive $3 billion of fresh capital flows into the Bitcoin market every day.
The chart above shows that Bitcoin's market share, or dominance, has reversed its downward trend, meaning that the rest of the crypto market has underperformed compared to Bitcoin over the past week.
The chart below shows the total market value of altcoins ranked 11th to 125th. The 27% drop from peak to trough is dwarfed by the massive 140% rally that preceded it. On the 3-day chart, we can see 11 consecutive green candles.
In every aspect - price, sentiment, leverage positions - this represents a healthy reset. And if the price rises further from here, we may well interpret it on the chart as a successful test of this year’s March high.
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Bitwise's predictions for 2025
This week, Bitwise CIO Matt Hougan and principal researcher Ryan Rasmussen were guests of Bankless, sharing their predictions for 2025. This annual ritual, now a tradition at many financial firms, always delivers striking insights.
Bitwise has a strong track record of forward-looking analysis. Last year, for example, they predicted that spot bitcoin ETFs would not only launch, but also be the most successful ETFs ever - and they were right. Their views on the rise of prediction markets as a killer app also proved to be spot on. Now they are turning their gaze to 2025, so what can we expect?
Prediction 1: Bitcoin, Ether, and Solana will reach new all-time highs.
Bitwise makes a bold prediction: Bitcoin soaring above $200,000, Ether reaching $7,000 and Solana surpassing $750. How is this possible?
For Bitcoin, Bitwise identifies three catalysts: institutional investors entering via ETFs, companies and even governments expanding their reserves, and the supply-constraining effect of the 2024 halving.
For Ether, the focus is on the growth of second-layer networks, increased adoption of stablecoins, and the tokenization of assets.
Solana meanwhile has to rely mostly on its role in the memecoin economy and the increasing migration of major projects to its network. Each of these factors has been historically proven to have the potential to cause price increases.
Prediction 2: ETFs will attract more capital than in 2024.
In 2024, the ETF market was already attracting impressive inflows with a net $35 billion invested. However, Bitwise predicts 2025 will far exceed that figure.
According to the fund manager, an ETF's early years are traditionally slower. In addition many large financial institutions have yet to fully enter the space. Investors are also becoming increasingly comfortable with higher exposure to crypto, with "3% of their portfolio becoming the new 1%". Bitwise points to gold ETFs as an example: in their first nine years, inflows grew by 50-100% annually. If a similar trend plays out, 2025 will be a record-breaking year.
Prediction 3: AI tokens will become larger than memecoins by 2024.
While 2024 was all about memecoins, Bitwise predicts that 2025 will be the year AI agent tokens take center stage. One example is Clanker, an AI agent that has already launched more than 11,000 tokens on the Base layer-2 network. The combination of speculation, innovation, and hype surrounding AI and crypto seems like the perfect storm for a new market bubble.
What else is in store? Bitwise foresees that 2025 will be the "year of the IPO", with big names like Circle and Kraken moving to Wall Street. They also predict a new AI bubble emerging, surpassing the memecoin craze of 2024 as more and more countries add Bitcoin to their reserves. Bitwise expects stablecoins to double in size, pension funds to make room for crypto, and tokenized assets to continue to grow. These are all ambitious forecasts worth keeping an eye on.
Bonus prediction: Bitcoin to overtake gold.
Bitwise concludes with a bold vision for the future: by 2029, they expect Bitcoin to become bigger than gold with a price above $1 million. However, they add an intriguing twist: if the U.S. government decides to acquire 1 million Bitcoin for a strategic reserve, then this milestone could be reached much sooner.
While this may sound like a distant prospect, history has shown that, in crypto, the wildest predictions are often closer than you think.
In other news
Crypto ETFs continue to attract inflows despite market turmoil. For twelve consecutive days, funds have been attracting capital with total inflows of more than $4 billion. Ether funds stood out with inflows of $855 million; never before have they attracted so much in just one week. This occurred against the backdrop of a volatile weekly opening with a sharp dip that triggered $1.5 billion in liquidations. Analysts interpret this resilience as a sign that investors have confidence in the long term, even in turbulent times.
Trump strengthens crypto ties with strategic appointments. Head of Policy at a16z Crypto, Brian Quintenz is reportedly a frontrunner to lead the Commodity Futures Trading Commission (CFTC). In addition, French Hill, a businessman and crypto enthusiast affiliated with the Republican party, will chair the House Financial Services Committee. These moves signal the incoming Trump administration’s interest in making crypto a cornerstone of U.S. financial policy.
Growth of stablecoin market continues. Tether now has more than $140 billion worth of USDT in circulation. Ripple also received the green light from the New York regulator this week for its RLUSD-stablecoin, although the coin has yet to launch. Meanwhile Ethena's USDe, with its market capitalization of $5.78 billion has become the third largest stablecoin thanks to high yields offered to holders. In the Netherlands, Quantoz is pioneering stablecoins to conquer the European market, according to CEO Arnoud Star Busmann in this week's Cryptocast.
Will El Salvador be brought to its knees by the IMF? El Salvador is seeking a multi-billion-dollar loan from the International Monetary Fund (IMF), with negotiations reportedly at an advanced stage, according to FT sources. One of the IMF's conditions is for El Salvador to drop the requirement for businesses to accept Bitcoin as a means of payment. President Bukele has not yet responded. The deal is expected to be finalized within the coming weeks.