2024 has been an extraordinary year for cryptocurrencies, and the market saw massive growth, characterized by impressive surges at both the beginning and the end of the year. Throughout the year, the industry remained in a consolidation phase, and from January 1, 2024, to January 1, 2025, cryptocurrencies’ market cap increased from $1.65 trillion to $3.28 trillion. Bitcoin’s dominance increased by the end of the year, and alongside Ethereum, it outpaced other assets in terms of performance.
Unsurprisingly, now that 2025 is here, the crypto industry is brimming with questions about future developments that could shape the year, and which assets are expected to thrive. Throughout 2025, cryptocurrencies will likely see more investment, with enthusiasts looking into projects beyond Ethereum and Bitcoin. In fact, market analysts predict an optimistic scenario for groundbreaking projects, with the Worldcoin price potentially rising in value and Solana and Cardano fulfilling their potential, to name just a few. Below, we explore 5 predictions for this year in the crypto industry, so make sure to check them out.
Will Trump’s electoral victory influence crypto regulations?
The lack of clarity around crypto regulations has been a massive concern in recent years, but on the campaign trail, Donald Trump made numerous promises to crypto enthusiasts, including that, starting his administration, he would fire SEC Chair Gary Gensler. After Gensler stepped down, Trump proposed that Paul Atkins (a cryptocurrency advocate) is the one who should replace him.
But as markets await clarity around crypto regulations, there’s no way to know for sure if they will truly receive what they want or when that will happen. Trump’s stance on cryptocurrencies and DeFi hasn’t been consistent, and although he showed interest in the industry, his focus is mainly limited to supporting real estate applications and dollar dominance. Regarding the legislation, getting stablecoin legislation passed will be a top priority, and afterward, it will shift towards the crypto market structure bill to help differentiate between the crypto assets representing securities and the ones representing commodities.
Will 2025 be the year when Ethereum finally outperforms Bitcoin?
It won’t be surprising if, this year, Ethereum succeeds in outperforming Bitcoin. For a long time, there’s been a discussion about whether the second-largest cryptocurrency by market cap has the potential to dethrone Bitcoin, but the conclusion was generally that the latter has some advantages, and thus, it’s unlikely that it will happen soon. However, there could be a shift in 2025, and one of the most important catalysts for it is the SEC’s approval of numerous spot Ethereum ETFs in 2024. Allowing everyday investors to purchase Ethereum without the need to buy it directly from a crypto exchange can offer the same lift for Ethereum that was possible for Bitcoin in 2024.
Moreover, from a historical perspective, there are signs that Ethereum could finally outperform Bitcoin. In early 2021, there was a wide gap in the crypto market cap dominance between the two major cryptocurrencies, and in June 2020-June 2021, the returns of Ethereum tripled those of Bitcoin. In other words, as historical performance shows, investors naturally flock to the 2nd coin when the dominance of Ethereum dips.
The new year will pave the way for the approval of new spot crypto ETFs
SEC Chair Gary Gensler has already communicated plans to step down on the day of Trump’s inauguration, and as the incoming administration will favor clarity on the crypto-governing laws, the path towards the approval of crypto spot ETFs is expected to be easier this year and beyond.
Logically, the following cryptocurrencies to have spot ETFs listed are Solana, XRP, and maybe Cardano. In fact, issuers have already filed for Solana and XRP spot ETFs. However, crypto legislation won’t necessarily be a priority for the next administration. While there’s no doubt that the crypto landscape will be simplified at some point, it will probably take a back seat to trade, tax, and immigration policy until the year’s latter- half or so.
Will 2025 be the end of dog-themed meme coins?
On the one hand, altcoins are forecasted to become a hot commodity in 2025 after a massive Bitcoin rally, but on the other hand, popular meme coins such as Shiba Inu and Dogecoin could lose half of their total value. After Trump’s victory, the price of Dogecoin increased, and this rally was strongly influenced by Trump’s move to appoint Elon Musk to head the DOGE – Department of Government Efficiency – with Vivek Ramaswamy.
Musk publicly stated that he owns Dogecoin and offered to assist developers with its network improvement, which further contributed to Dogecoin’s increase in value. However, when it comes to meme coins, the story is generally the same: while they tend to generate a lot of buzz, they lack real-world utility compared to other crypto projects. From a historical perspective, whenever the price of Bitcoin weakens, meme coins such as Shiba Inu and Dogecoin get a massive hit. Considering that they don’t have any features to help them stand out or any true catalysts, these tokens will likely have a rough 2025.
Will the crypto market become less volatile?
Over the past few years, there’s been a noticeable downward trend regarding the volatility of cryptocurrencies, and the main reason for it is increased adoption. Digital assets’ attention resulted in more liquidity, making the market less vulnerable to violent price fluctuations in either direction.
Market analysts expect that the volatility surrounding these assets will continue to decrease, especially now that ETFs have made access more seamless and are attracting a broader swath of investors. In the long run, lower volatility would translate into more mainstream adoption as investors could find cryptocurrencies more appealing and feel more confident investing in them without exposing themselves to significant risks.
The bottom line
In 2025, the crypto market will become more mature, ushering in a new era of stability and opportunity for institutions and investors. Given the exciting predictions, now is the right time to keep an eye on cryptocurrencies and consider whether they make sense for your investment portfolio. While the opportunities are significant, it’s essential to do your due diligence and decide for yourself whether you’re ready to jump on the crypto bandwagon.
