VanEck's Top 10 Predictions for 2025: Bitcoin Rises to $180,000 in Q1, Ethereum to $6,000

Source: VanEck

Authors: Matthew Sigel, Patrick Bush

Compilation: BitpushNews

Before we dive into our predictions for 2025, let's take a moment to review our predictions for 2024. Among these predictions, we had 8.5 that were accurate, resulting in an accuracy rate of 56.6%. While not perfect, considering Bitcoin broke $100,000 and Ethereum surpassed $4,000, 2024 remains a year to remember, even if some predictions were off.

Review of 2024 Cryptocurrency Predictions

Spot BTC ETP makes its debut -- (1 point)

Bitcoin halving progresses smoothly -- (1 point)

Bitcoin reaches an all-time high in Q4 2024 -- (1 point)

Ethereum remains in second place behind Bitcoin -- (1 point)

L2 dominates Ethereum activity (but L2 TVL remains below Ethereum) -- (0.5 points)

Stablecoin market cap hits an all-time high -- (1 point)

Decentralized exchange spot trading volume reaches record levels -- (1 point)

SOL outperforms ETH -- (1 point)

DePIN network adoption continues to grow -- (1 point)

Now, let's get to the main topic: our cryptocurrency predictions for 2025.

Top 10 Cryptocurrency Predictions for 2025

The cryptocurrency bull market peaks mid-Q1 and reaches new highs in Q4.

The U.S. embraces Bitcoin through strategic reserves and increased cryptocurrency adoption.

Tokenized securities exceed $50 billion in value.

Stablecoin daily settlement volume reaches $300 billion.

On-chain activity from AI agents exceeds 1 million agents.

Total locked value (TVL) of Bitcoin Layer 2 reaches 100,000 BTC.

Ethereum blob space generates $1 billion in fees.

DeFi reaches an all-time high, with DEX trading volume hitting $4 trillion and TVL reaching $200 billion.

The NFT market rebounds, with trading volume reaching $30 billion.

DApp tokens narrow the performance gap with L1 tokens.

1. The cryptocurrency bull market peaks mid-Q1 and reaches new highs in Q4

We believe the cryptocurrency bull market will continue into 2025, peaking in the first quarter. At the peak of the cycle, we predict Bitcoin (BTC) will be valued at around $180,000, while Ethereum (ETH) will trade above $6,000. Other notable projects, such as Solana (SOL) and Sui (SUI), may exceed $500 and $10, respectively.

After the first peak, we expect BTC to experience a 30% pullback, with altcoins facing declines of up to 60% as the summer market consolidates. However, a recovery may occur in the fall, with major tokens regaining momentum and recovering previous all-time highs by year-end. To assess when the market is nearing its peak, we are monitoring the following key signals:

Sustained high financing rates: When traders borrow funds to bet on BTC price increases, they are willing to pay financing rates exceeding 10% for three months or longer, indicating excessive speculation.

BTC Perps financing rates > 10% sustained for several months will be a bearish factor.

Source: Glass Node, as of December 8, 2024. Past performance is not indicative of future results. This is not a recommendation to buy or sell any securities mentioned in this article.

Excess unrealized profits: If the proportion of BTC holders with significant paper gains (profit-to-cost ratio of 70% or higher) stabilizes, it indicates market optimism.

Overvaluation relative to realized value: When the MVRV (market value to realized value ratio) score exceeds 5, it indicates that BTC prices are far above the average purchase price, typically signaling overheating.

Declining Bitcoin dominance: If Bitcoin's share of the overall cryptocurrency market falls below 40%, it indicates a speculative shift toward riskier altcoins, which is typical late-cycle behavior.

Mainstream speculation: A surge in inquiries from friends unfamiliar with cryptocurrency about dubious projects is a reliable signal of nearing peak speculative frenzy.

Historically, these indicators have been reliable signals of market booms and will guide our outlook as we navigate the expected market cycle in 2025.

For example: A "Top Signal" text from a friend I met five years ago.

2. The U.S. embraces Bitcoin through strategic reserves and increased cryptocurrency adoption

Donald Trump's election has injected tremendous momentum into the cryptocurrency market, with his administration appointing crypto-friendly leaders to key positions, including Vice President J.D. Vance, National Security Advisor Michael Waltz, Secretary of Commerce Howard Lutnick, Treasury Secretary Scott Bessent, SEC Chairman Paul Atkins, FDIC Chair Jelena McWilliams, and HHS Secretary RFK Jr. These appointments not only mark the end of anti-crypto policies, such as systematically targeting the banking operations of crypto companies and their founders, but also signal the beginning of a policy framework positioning Bitcoin as a strategic asset.

Crypto ETPs: Physical creation, staking, and new spot approvals

The new SEC leadership (or possibly the CFTC) will approve multiple new spot cryptocurrency exchange-traded products (ETPs) in the U.S., including VanEck's Solana product. Ethereum ETPs will expand functionalities to include staking, further enhancing their utility for holders, while both Ethereum and Bitcoin ETPs will support physical creation/redemption. Whether through the SEC or Congress repealing SEC Rule SAB 121, this will pave the way for banks and brokers to custody spot cryptocurrencies, further integrating digital assets into traditional financial infrastructure.

Sovereign Bitcoin adoption: Federal, state, and mining expansion

We predict that by 2025, the federal government or at least one U.S. state (possibly Pennsylvania, Florida, or Texas) will establish Bitcoin reserves. From the federal perspective, this is more likely to be achieved through an executive order utilizing the Treasury's Exchange Stabilization Fund (ESF), although bipartisan legislation remains an unknown. Meanwhile, state governments may act independently, viewing Bitcoin as a tool to hedge against fiscal uncertainty or attract crypto investment and innovation.

In terms of Bitcoin mining, as adoption rates in BRICS countries increase, the number of countries utilizing government resources to mine Bitcoin is expected to reach double digits (currently at seven). Russia has expressed intentions to settle international trade in cryptocurrency, driving this trend and highlighting Bitcoin's increasingly important role in global economic strategy.

Countries utilizing government resources to mine Bitcoin

Source: VanEck Research, as of December 2024.

We expect this supportive stance toward Bitcoin to ripple through the entire U.S. crypto ecosystem. As regulatory clarity and incentives attract talent and companies back, the share of global crypto developers based in the U.S. will rise from 19% to 25%. Meanwhile, Bitcoin mining in the U.S. will thrive, with its share of global mining hash rate increasing from 28% in 2024 to 35% by the end of 2025, driven by cheap energy and potential favorable tax policies. These trends will collectively solidify the U.S.'s leadership position in the global Bitcoin economy.

U.S. publicly traded companies' share of Bitcoin hash rate will reach 35%

Source: Data provided by JPMorgan, VanEck Research as of December 6, 2024. Past performance is not indicative of future results.

Corporate Bitcoin holdings expected to soar by 43%

In terms of corporate adoption, we expect companies to continue accumulating Bitcoin from retail investors. Currently, 68 publicly traded companies hold Bitcoin on their balance sheets, and we anticipate this number will reach 100 by 2025. Notably, we boldly predict that the total amount of Bitcoin held by private and public companies (currently 765,000 BTC) will exceed the 1.1 million BTC held by Satoshi Nakamoto next year. This implies that corporate Bitcoin holdings will grow at an astonishing rate of 43% over the next year.

Gold vs. Bitcoin ownership: Growth potential for corporations and governments

Source: VanEck Research, as of December 2024.

3. The value of tokenized securities exceeds $50 billion

On-chain securities grow 61% in 2024

Source: RWA.xyz, Defillama, as of December 6, 2024. Past performance is not indicative of future results.

The crypto track is expected to improve the financial system by enhancing efficiency, decentralization, and transparency. We believe 2025 will be a breakout year for tokenized securities. Currently, there are approximately $12 billion worth of tokenized securities on the blockchain, most of which ($9.5 billion) are tokenized private credit securities listed on Figure's semi-permissioned blockchain Provenance.

Looking ahead, we see tremendous potential for tokenized securities to be issued on public chains. We believe investors have many incentives to push for tokenized stocks or debt securities to be issued specifically on-chain. Next year, we expect entities like DTCC to enable tokenized assets to seamlessly transition between public chains and private closed infrastructures. This dynamic will set standards for on-chain investors to execute AML/KYC. As an uncertain factor, we predict Coinbase will take unprecedented steps to tokenize COIN stock and deploy it on its BASE blockchain.

4. Stablecoin daily settlement volume reaches $300 billion

Monthly stablecoin transfer volume (USD) grows 180% year-over-year in 2024

Source: Artemis XYZ, as of December 6, 2024. Past performance is not indicative of future results.

Stablecoins will surpass their niche status in cryptocurrency trading to become a core part of global commerce. By the end of 2025, we expect stablecoins to settle $300 billion in transfers daily, equivalent to 5% of DTCC's current trading volume, up from approximately $100 billion daily in November 2024. Adoption by large tech companies (like Apple and Google) and payment networks (Visa, Mastercard) will redefine payment economics.

In addition to trading, the remittance market will also experience explosive growth. For instance, stablecoin transfers between the U.S. and Mexico could grow fivefold, from $8 million per month to $400 million. Why? Speed, cost savings, and the growing trust of millions who no longer view stablecoins as an experiment but as a practical tool. While everyone talks about blockchain adoption, stablecoins are its Trojan horse.

5. On-chain activity from AI agents exceeds 1 million agents

AI agents generate $8.7 million in total revenue over 5 weeks

Source: Dune @jdhpyer, as of December 6, 2024. Past performance is not indicative of future results.

We believe one of the most compelling narratives is that of AI agents, which will translate into massive appeal in 2025. AI agents are specialized AI bots that guide users to achieve outcomes such as "maximizing returns" or "stimulating X/Twitter engagement." Agents leverage their ability to autonomously change strategies to optimize these outcomes. AI agents are typically fed data and trained to focus on a specific area. Currently, protocols like Virtuals provide anyone with the tools to create AI agents to perform on-chain tasks. Virtuals allow non-experts to access decentralized AI agent contributors, such as fine-tuners, dataset providers, and model developers, enabling non-technical individuals to create their own AI agents. The result will be a surge in the number of agents that their creators can rent out to generate income.

Currently, the focus of agent building is on DeFi, but we believe AI agents will extend beyond financial activities. Agents can serve as social media influencers, computer players in games, and interactive partners/assistants in consumer applications. Agents have already become significant X/Twitter influencers, such as Bixby and Terminal of Truths, who have 92,000 and 197,000 followers, respectively. Therefore, we believe the immense potential of agents will give rise to over 1 million new agents in 2025.

6. Total locked value (TVL) of Bitcoin Layer 2 reaches 100,000 BTC

Total locked amount in Bitcoin L2 reaches 30,000 BTC, growing 600% year-to-date in 2024

Source: Defillama, as of December 6, 2024. Past performance is not indicative of future results. This is not a recommendation to buy or sell any securities mentioned in this article.

We are closely monitoring the emergence of Bitcoin Layer 2 (L2) blockchains, which have the potential to transform the Bitcoin ecosystem. Scaling Bitcoin allows these L2 solutions to achieve lower latency and higher transaction throughput, addressing the limitations of the base layer. Additionally, Bitcoin L2 enhances Bitcoin's functionality by introducing smart contract capabilities, which can support a robust decentralized finance (DeFi) ecosystem built around Bitcoin.

Currently, Bitcoin can be transferred to smart contract platforms via bridged or wrapped BTC from the Bitcoin blockchain, relying on third-party systems that are vulnerable to hacks and security flaws. Bitcoin L2 solutions aim to mitigate these risks by providing a framework that integrates directly with the Bitcoin base layer, minimizing reliance on centralized intermediaries. While liquidity constraints and adoption barriers still exist, Bitcoin L2 is expected to enhance security and decentralization, allowing BTC holders to confidently use their Bitcoin actively within decentralized ecosystems.

As shown, Bitcoin L2 solutions experienced explosive growth in 2024, with total locked value (TVL) exceeding 30,000 BTC, growing 600% year-to-date, totaling approximately $3 billion. Currently, there are over 75 Bitcoin L2 projects in development, but only a few may achieve widespread adoption in the long term.

This rapid growth reflects the strong demand from BTC holders seeking yield and broader asset utility. As chain abstraction technology and Bitcoin L2 mature into products available for end-users, Bitcoin will also become an integral part of DeFi. For example, platforms like Ika on Sui or Near chain abstraction used by Infinex highlight how innovative multi-chain solutions will enhance Bitcoin's interoperability with other ecosystems.

By enabling secure and efficient on-chain lending and other permissionless DeFi solutions, Bitcoin L2 and abstraction technology will transform Bitcoin from a passive store of value into an active participant in decentralized ecosystems. As adoption scales, these technologies will create significant opportunities for on-chain liquidity, cross-chain innovation, and a more integrated financial future.

7. Ethereum blob space generates $1 billion in fees

Source: Dune @hildobby, as of December 6, 2024. Past performance is not indicative of future results.

The Ethereum community is actively discussing whether Ethereum has gained sufficient value through Blob Space from its Layer 2 (L2) network, which is a key component of its scaling roadmap. Blob Space acts as a dedicated data layer where L2 submits its compressed transaction history to Ethereum and pays ETH fees per blob. While this architecture supports Ethereum's scalability, the value flowing from L2 to the mainnet is currently minimal, with a gross margin of about 90%. This raises concerns that Ethereum's economic value may be overly shifting toward L2, leading to underutilization of the base layer.

Despite recent slow growth in Blob Space, we expect its usage to expand dramatically by 2025, primarily due to three key factors:

Explosive L2 adoption: As users migrate to low-cost, high-throughput environments in DeFi, gaming, and social applications, transaction volume on Ethereum L2 is growing at an annualized rate exceeding 300%. As more transactions flow back to Ethereum for final settlement, the surge in consumer-facing dApps on L2 will significantly increase demand for Blob space.

Rollup optimization: Advances in rollup technology, such as improved data compression and reduced costs for publishing data to Blob Space, will encourage L2 to store more transaction data on Ethereum, achieving higher throughput without sacrificing decentralization.

Introduction of high-fee use cases: The rise of enterprise-grade applications, zk-rollup-driven financial solutions, and tokenized real-world assets will drive high-value transactions that prioritize security and immutability, increasing the willingness to pay Blob Space fees.

By the end of 2025, we expect Blob Space fees to exceed $1 billion, up from currently negligible levels. This growth will solidify Ethereum's position as the ultimate settlement layer for decentralized applications while enhancing its ability to capture value from the rapidly expanding L2 ecosystem. Ethereum's Blob Space will expand the network and become a major revenue source, balancing the economic relationship between the mainnet and L2.

8. DeFi reaches an all-time high, with DEX trading volume hitting $4 trillion and TVL reaching $200 billion

Source: Defillama, as of December 6, 2024. Past performance is not indicative of future results.

Despite decentralized exchanges (DEX) achieving all-time highs in trading volume (both in absolute terms and relative to centralized exchanges (CEX)), the total locked value (TVL) of decentralized finance (DeFi) remains 24% below its peak. We expect that driven by AI-related tokens and new consumer-facing dApps, DEX trading volume will exceed $4 trillion by 2025, accounting for 20% of CEX spot trading volume.

Additionally, the influx of tokenized securities and high-value assets will promote DeFi growth, providing new liquidity and broader utility. Therefore, we expect DeFi TVL to rebound to over $200 billion by year-end, reflecting the growing demand for decentralized financial infrastructure in an evolving digital economy.

9. The NFT market rebounds, with trading volume reaching $30 billion

Source: As of December 6, 2024. Past performance is not indicative of future results. This is not a recommendation to buy or sell any securities mentioned in this article.

The bear market of 2022-2023 hit the NFT industry hard, with trading volume plummeting 39% since 2023 and 84% since 2022. While the prices of fungible tokens began to recover in 2024, most NFTs lagged behind, with weak prices and inactive activity until a turning point in November. Despite these challenges, some standout projects have leveraged strong community ties to transcend speculative value, resisting downward trends.

For example, Pudgy Penguins have successfully transformed into a consumer brand through collectible toys, while Miladys have gained cultural status in the realm of ironic internet culture. Similarly, the Bored Ape Yacht Club (BAYC) continues to evolve into a dominant cultural force, attracting widespread attention from brands, celebrities, and mainstream media.

As crypto wealth rebounds, we expect newly affluent users to invest in NFTs not just as speculative investments but as assets with lasting cultural and historical significance. Given the strong cultural prestige and relevance of well-known collectibles like CryptoPunks and Bored Ape Yacht Club (BAYC), they are likely to benefit from this shift. Although BAYC and CryptoPunks remain far below their historical trading peaks, having dropped approximately 90% and 66% respectively in ETH terms, other projects like Pudgy Penguins and Miladys have already surpassed their previous price highs.

Ethereum continues to dominate the NFT space, holding the majority of significant collectibles. By 2024, it accounted for 71% of NFT trading, and we expect this figure to rise to 85% by 2025. This dominance is reflected in market cap rankings, with Ethereum-based NFTs occupying all top 10 positions and 16 of the top 20, highlighting the blockchain's central role in the NFT ecosystem.

While NFT trading volume may not return to the euphoric highs of previous cycles, we believe that as the market shifts toward sustainability and cultural relevance rather than speculative hype, an annual trading volume of $30 billion is achievable, approximately 55% of the 2021 peak.

10. DApp tokens narrow the performance gap with L1 tokens

Source: Market Vectors, as of December 8, 2024. Past performance is not indicative of future results. The MVSCLE index tracks smart contract platform tokens. The MVIALE index tracks infrastructure application tokens.

A consistent theme of the 2024 bull market is that Layer 1 (L1) blockchain tokens have significantly outperformed decentralized application (dApp) tokens. For instance, the MVSCLE index, which tracks smart contract platforms, has risen 80% year-to-date, while the MVIALE index for application tokens has only returned 35% in the same period, lagging behind.

However, we expect this dynamic to change later in 2024 as a wave of new dApps launches, providing innovative and practical products that will bring value to their respective tokens. Among the major thematic trends, we believe artificial intelligence (AI) is a standout category for dApp innovation. Additionally, decentralized physical infrastructure network (DePIN) projects have tremendous potential to attract investor and user interest, contributing to a broader performance rebalancing between L1 tokens and dApp tokens.

This shift underscores the increasing importance of utility and product-market fit for the success of application tokens in the ever-evolving cryptocurrency landscape.