VanEck’s 10 Crypto Predictions for 2025

Please note that VanEck may have a position(s) in the digital asset(s) described below.

Before we get into our 2025 predictions, let’s take a moment to review how our 2024 calls stacked up. Out of 15 predictions made back in December 2023, we score ourselves 8.5/15. A 0.566 batting average might not be perfect, but it’s enough to keep us in the game. With Bitcoin (BTC) smashing $100k and Ethereum (ETH) breaking $4k, even some of our misses were part of a year to remember.

Crypto Predictions Review for 2024

1. Debut of spot BTC ETP s – (1 point)
2. Bitcoin halving proceeds smoothly - (1 point)
3. Bitcoin reaches all-time high in 4Q2024 - (1 point)
4. Ethereum remains #2 to bitcoin - (1 point)
5. L2s dominate Ethereum activity (but L2 TVL still below Ethereum’s) – (0.5 points)
6. Stablecoin market cap hits record high - (1 point)
7. Decentralized exchanges attain record share of spot volumes - (1 point)
8. SOL outperforms ETH - (1 point)
9. DePIN network adoption grows - (1 point)

Now, let’s get into the main event: our crypto predictions for 2025.

Top 10 Crypto Predictions for 2025

1. Crypto bull market hits a medium-term peak in Q1, sets new highs in Q4
2. U.S. embraces bitcoin with strategic reserve(s) and increased crypto adoption
3. Value of tokenized securities exceeds $50 billion
4. Stablecoins daily settlement volumes reach $300 billion
5. AI agents’ onchain activity surpasses 1 million agents
6. Bitcoin layer-2s reach 100,000 BTC in total value locked (TVL)
7. Ethereum blob space generates $1 billion in fees
8. DeFi hits all-time highs with $4 trillion DEX volumes and $200B TVL
9. NFT market recovery with trading volumes reaching $30 billion
10. DApp tokens narrow the performance gap with L1 tokens

1. Crypto bull market hits a medium-term peak in Q1, sets new highs in Q4

We believe the crypto bull market will persist through 2025, reaching its first peak in the first quarter. At the cycle’s apex, we project Bitcoin (BTC) to be valued at around $180,000, with Ethereum (ETH) trading above $6,000. Other prominent projects, such as Solana (SOL) and Sui (SUI), could exceed $500 and $10, respectively.

Following this first peak, we anticipate a 30% retracement in BTC, with altcoins facing sharper declines of up to 60% as the market consolidates during the summer. However, a recovery is likely in the fall, with major tokens regaining momentum and reclaiming previous all-time highs by the end of the year. To gauge when the market is nearing its top, we are monitoring these key signals:

• Sustained High Funding Rates: When traders borrow to bet on BTC price increases, they are willing to pay funding rates exceeding 10% for three months or more, which indicates speculative excess.

BTC Perps Funding > 10% For Months Would be Bearish

Sources: Glass Node as of 12/8/2024. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

• Excessive Unrealized Profits: If the proportion of BTC holders sitting on significant paper gains (a profit-to-cost ratio of 70% or higher) stabilizes, it suggests market euphoria.
• Overvalued Market Cap Relative to Realized Value: When MVRV (market value to realized value) scores exceed 5, it shows BTC prices are far above average purchase prices, often signaling overheated conditions.
• Declining Bitcoin Dominance: If Bitcoin’s share of the total crypto market drops below 40%, it implies a speculative shift into riskier altcoins, a classic late-cycle behavior.
• Mainstream Speculation: A flood of texts from non-crypto-savvy friends asking about questionable projects is a reliable signal of speculative mania near the top.

These indicators have historically been reliable signals of market exuberance and will guide our outlook as we navigate 2025’s anticipated market cycles.

Example: ‘Top Signal’ text message from an acquaintance from 5 years ago.

2. U.S. embraces bitcoin with strategic reserve(s) and increased crypto adoption

The election of Donald Trump has already injected significant momentum into the crypto market, driven by his administration's appointments of crypto-friendly leaders to pivotal positions, including VP JD Vance, National Security Advisor Michael Waltz, Commerce Secretary Howard Lutnick, Treasury Secretary Mary Bessent, Securities and Exchange Commission (SEC) Chair Paul Atkins, Federal Deposit Insurance Corporation (FDIC) Chair Jelena McWilliams, and HHS Secretary RFK Jr, and more. These appointments signal not just the end of anti-crypto policies, such as the systematic de-banking of crypto companies and their founders, but also the start of a policy framework that positions Bitcoin as a strategic asset.

Crypto ETPs: in-kind creations, staking, and new spot approvals

New SEC leadership, or possibly the CFTC, will approve multiple new spot crypto exchange-traded products (ETPs) in the U.S., including the VanEck Solana offering. Ethereum ETP functionality expands to include staking, further enhancing its utility for holders, while both Ethereum and Bitcoin ETPs support in-kind creations/redemptions. The repeal of SEC Rule SAB 121, either by the SEC or Congress, will pave the way for banks and brokers to custody spot crypto, further integrating digital assets into traditional financial infrastructure.

Sovereign bitcoin adoption: federal, state, and mining expansion

We predict that by 2025, either the federal government or at least one U.S. state—likely Pennsylvania, Florida, or Texas—will establish a Bitcoin reserve. Federally, this is more likely to occur through an executive order utilizing the Treasury’s Exchange Stabilization Fund (ESF), though bipartisan legislation remains a wildcard. Simultaneously, state governments may act independently, viewing Bitcoin as a hedge against fiscal uncertainty or a tool to attract crypto investment and innovation.

On the Bitcoin mining side, the number of countries mining Bitcoin with government resources is expected to reach double digits (currently at seven) as BRICS adoption grows. This trend is fueled by Russia’s stated intent to settle international trade in crypto, highlighting Bitcoin's increasing importance in global economic strategies.

Number of Countries Mining Bitcoin with Government Resources

Source: VanEck Research as of 12/2024.

We expect this pro-Bitcoin stance to ripple across the broader U.S. crypto ecosystem. The share of global crypto developers based in the U.S. will rise from 19% to 25% as regulatory clarity and incentives draw talent and companies back. Meanwhile, U.S.-based Bitcoin mining will flourish, with the U.S. share of global mining hash rate increasing from 28% in 2024 to 35% by the end of 2025, driven by cheap energy and potentially favorable tax policies. Together, these trends will solidify America’s leadership in the global Bitcoin economy.

U.S.-Listed Company’s Share of Bitcoin Hash Rate to Reach 35%

Source: JP Morgan, VanEck Research s of 12/6/2024. Past performance is no guarantee of future results.

Corporate bitcoin holdings: poised to surge 43%

In terms of corporate adoption, we expect companies to continue accumulating Bitcoin from retail holders. Currently, 68 public companies hold Bitcoin on their balance sheets, a number we project to reach 100 by 2025. Notably, we boldly predict that the total Bitcoin held by private and public companies—currently 765,000 BTC—will surpass Satoshi Nakamoto's holdings of 1.1 million BTC by next year. This implies a remarkable growth rate of 43% in corporate Bitcoin holdings over the coming year.

Gold vs. Bitcoin Ownership: Room for Corporates and Governments to Grow

Source: VanEck Research as of 12/2024.

3. The value of tokenized securities exceeds $50 billion

Onchain Securities Grew 61% in 2024

Sources: RWA.xyz, Defillama as of 12/6/2024. Past performance is no guarantee of future results.

Crypto rails promise a better financial system through improved efficiency, decentralization, and greater transparency. We believe that 2025 will be the year that tokenized securities take off. Already, there is ~$12B worth of tokenized securities on blockchains, with the majority ($9.5B) being tokenized private credit securities listed on the Figure’s semi-permissioned blockchain called Provenance.

In the future, we see enormous potential for tokenized securities to launch on public chains. We theorize that there are many incentives for investors to push for tokenized equity or debt securities launched exclusively onchain. In the next year, we project that entities like the DTCC will enable tokenized assets that seamlessly transition between public blockchains and private, closed infrastructure. This dynamic will result in standards for performing AML/KYC for on-chain investors. As a wildcard bet, we forecast that Coinbase will take the unprecedented step of tokenizing COIN stock and deploying it to its BASE blockchain.

4. Stablecoins daily settlement volumes reach $300 billion

Monthly Stablecoin Transfers (USD) Were Up 180% YoY in 2024

Source: Artemis XYZ as of 12/6/2024. Past performance is no guarantee of future results.

Stablecoins will leapfrog their niche role in crypto trading to become a core part of global commerce. By the end of 2025, we project stablecoins will settle $300B daily transfers—equivalent to 5% of DTCC’s current volumes, up from ~$100B daily in November 2024. Their adoption by major tech companies (think Apple and Google) and payment networks (Visa, Mastercard) will redefine the economics of payments.

Beyond trading, the remittance market will explode. U.S.-Mexico stablecoin transfers, for instance, could grow 5x, from $80M to $400M monthly. Why? Speed, cost savings, and the growing trust of millions who see stablecoins not as experiments but as practical tools. For all the talk of blockchain adoption, stablecoins are its Trojan Horse.

5. AI agents’ onchain activity surpasses 1 million agents

Total Revenue for AI Agents is $8.7M in 5 Weeks

Sources: Dune @jdhpyer as of 12/6/2024. Past performance is no guarantee of future results

One of the most compelling narratives we believe will translate into massive traction in 2025 is AI Agents. AI agents are specialized AI bots that direct users to achieve outcomes such as “maximizing yield” or “spurring X/Twitter engagement.” The agents optimize these outcomes by utilizing their abilities to change their strategies autonomously. AI agents are often fed data and trained to specialize in one domain. Currently, protocols like Virtuals give anyone the tools to create an AI agent to perform on-chain tasks. Virtuals allow non-experts to access decentralized AI agent contributors such as fine-tuners, dataset providers, and model developers so that non-technical people can create their own AI agents. The result will be the enormous proliferation of agents their creators can lease out to generate income.

The current focus of agent building has been DeFi, but we believe that AI agents will transcend financial activities. Agents can be employed to act as social media influencers, computer players in gaming, and interactive companions/helpers in consumer applications. Agents have already become important X/Twitter influencers, such as Bixby and Terminal of Truths, who reached 92k and 197k followers, respectively. As such, we believe the enormous potential for agents will result in the birth of over 1 million new agents in 2025.

6. Bitcoin layer-2s reach 100,000 BTC in total value locked (TVL)

Bitcoin L2s TVLs Reach 30k BTC, 600% Increase YTD 2024

Sources: Defillama as of 12/6/2024. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

We are closely monitoring the emergence of Bitcoin layer-2 (L2) blockchains, which hold immense potential for transforming Bitcoin's ecosystem. Scaling Bitcoin enables these L2 solutions to enable lower latency and higher transaction throughput, addressing the limitations of the base layer. Moreover, Bitcoin L2s enhance Bitcoin’s capabilities by introducing smart contract functionality, which can power a robust decentralized finance (DeFi) ecosystem built around Bitcoin.

Currently, Bitcoin can be moved off the Bitcoin blockchain to smart contract platforms through bridged or wrapped BTC, which rely on third-party systems prone to hacks and security vulnerabilities. Bitcoin L2 solutions aim to address these risks by offering frameworks that integrate directly with Bitcoin's base layer, minimizing reliance on centralized intermediaries. While liquidity constraints and adoption hurdles remain, Bitcoin L2s promise to enhance security and decentralization, giving BTC holders greater confidence to use their Bitcoin in decentralized ecosystems actively.

As shown in the chart, Bitcoin L2 solutions have experienced explosive growth in 2024, with total value locked (TVL) surpassing 30,000 BTC—a 600% increase year-to-date, amounting to approximately $3 billion. Currently, over 75 Bitcoin L2 projects are in development, though only a select few are likely to achieve significant adoption over the long term.

This rapid growth reflects strong demand from BTC holders seeking yield generation and broader utility for their assets. Bitcoin will also become an integral part of DeFi as chain abstraction technology and Bitcoin L2s mature into usable products for end users. For instance, platforms like Ika on Sui or Near’s 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 borrowing, lending, and other permissionless DeFi solutions, Bitcoin L2s and abstraction technology will transform Bitcoin from a passive store of value into an active participant in decentralized ecosystems. As adoption scales, these technologies unlock substantial opportunities for on-chain liquidity, cross-chain innovation, and a more integrated financial future.

7. Ethereum blob space generates $1 billion in fees

Ethereum Blobs Posted Per Day

Sources: Dune @hildobby as of 12/6/2024. Past performance is no guarantee of future results.

The Ethereum community is actively debating whether Ethereum accrues sufficient value from its Layer-2 (L2) networks through Blob Space, a critical component of its scaling roadmap. Blob Space serves as a specialized data layer where L2s submit a compressed history of their transactions to Ethereum, paying fees in ETH on a per-blob basis. While this architecture underpins Ethereum’s scalability, L2s currently remit minimal value to the Mainnet, achieving gross margins of approximately 90%. This has sparked concerns that Ethereum’s economic value could shift too heavily toward L2s, leaving the base layer underutilized.

Despite a recent slowdown in Blob Space growth, we project a sharp expansion in its usage by 2025, driven by three key factors:

1. Explosive L2 Adoption: Transaction volumes on Ethereum L2s are growing at an annualized rate exceeding 300% as users migrate to lower-cost, high-throughput environments for DeFi, gaming, and social applications. The proliferation of consumer-facing dApps on L2s will significantly increase the demand for Blob Space as more transactions flow back to Ethereum for final settlement.
2. Rollup Optimizations: Advances in rollup technology, such as improved data compression and reduced costs for posting data to Blob Space, will encourage L2s to store more transaction data on Ethereum, unlocking higher throughput without sacrificing decentralization.
3. Introduction of High-Fee Use Cases: The rise of enterprise-grade applications, zk-rollup-powered financial solutions, and tokenized real-world assets will drive high-value transactions, prioritizing security and immutability, increasing willingness to pay Blob Space fees.

By the end of 2025, we project that Blob Space fees will exceed $1 billion, up from negligible levels today. This growth will cement Ethereum’s role as the ultimate settlement layer for decentralized applications while reinforcing its ability to capture value from its rapidly expanding L2 ecosystem. Ethereum’s Blob Space will scale the network and serve as a key revenue stream, balancing the economic relationship between Mainnet and L2s.

8. DeFi hits all-time highs with $4 trillion DEX volumes and $200B TVL

Total DeFi (Decentralized Finance) Total Value Locked (TVL)

Source: Defillama as of 12/6/2024. Past performance is no guarantee of future results.

Despite record-high decentralized exchange (DEX) trading volumes, both in absolute terms and relative to centralized exchanges (CEXs), decentralized finance (DeFi) total value locked (TVL) remains 24% below its peak. We anticipate that DEX trading volumes will surpass $4 trillion in 2025, capturing 20% of CEX spot trading volumes, driven by the proliferation of AI-related tokens and new consumer-facing dApps.

Additionally, the influx of tokenized securities and high-value assets will catalyze DeFi growth, providing fresh liquidity and broader utility. As a result, we project DeFi TVL to rebound to over $200 billion by year-end, reflecting the rising demand for decentralized financial infrastructure in an evolving digital economy.

9. NFT market recovery with trading volumes reaching $30 billion

NFT Volumes Fell in 2024; We Expect a Rebound in 2025

Source: as of: 12/6/2024. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities named herein.

The 2022–2023 bear market dealt a severe blow to the NFT sector, with trading volumes plummeting 39% since 2023 and a staggering 84% since 2022. While fungible token prices began to recover in 2024, most NFTs lagged behind, marked by weak prices and low activity until a turning point in November. Despite these challenges, a few standout projects have defied the downward trend by leveraging strong community bonds to transcend speculative value.

For instance, Pudgy Penguins have successfully transitioned into a consumer brand through collectible toys, while Miladys have gained cultural prominence within the realm of sardonic internet culture. Similarly, the Bored Ape Yacht Club (BAYC) has continued to evolve as a dominant cultural force, attracting widespread attention from brands, celebrities, and mainstream media.

As crypto wealth rebounds, we expect newly affluent users to diversify into NFTs, not merely as speculative investments but as assets with enduring cultural and historical significance. Established collections such as CryptoPunks and Bored Ape Yacht Club (BAYC) are well-positioned to benefit from this shift, given their strong cultural cachet and relevance. While BAYC and CryptoPunks remain significantly below their all-time trading peaks, down approximately 90% and 66% in ETH terms, respectively, other projects like Pudgy Penguins and Miladys have already exceeded their previous price highs.

Ethereum continues to dominate the NFT space, hosting the majority of significant collections. In 2024, it accounts for 71% of NFT trading, a figure we project to rise to 85% by 2025. This dominance is reflected in market capitalization rankings, where Ethereum-based NFTs occupy the entire top 10 and 16 of the top 20 positions, underscoring the blockchain's central role in the NFT ecosystem.

Although NFT trading volumes may not revisit the euphoric highs of previous cycles, we think a $30 billion annual turnover is doable, approximately 55% of the 2021 peak, as the market shifts toward sustainability and cultural relevance over speculative hype.

10. DApp tokens narrow the performance gap with L1 tokens

In 2024, Layer 1 Tokens Outperformed Leading dApps by 2x

Source: Market Vectors as of 12/8/2024. Past performance is no guarantee of future results. The MVSCLE index tracks Smart Contract Platforms. The MVIALE index tracks Infrastructure Application tokens.

A consistent theme of the 2024 bull market has been the significant outperformance of Layer-1 (L1) blockchain tokens compared to decentralized application (dApp) tokens. For instance, the MVSCLE index, which tracks Smart Contract Platforms, has gained 80% year-to-date, while the MVIALE index of application tokens has lagged with a 35% return over the same period.

However, we anticipate this dynamic will shift later in 2024 as a wave of new dApps launches, delivering innovative and useful products that drive value to their respective tokens. Among the key thematic trends, we see artificial intelligence (AI) as a standout category for dApp innovation. Additionally, Decentralized Physical Infrastructure Networks (DePIN) projects offer immense potential to capture investor and user interest, contributing to a broader performance rebalancing between L1 tokens and dApp tokens.

This pivot underscores the growing importance of utility and product-market fit in determining the success of application tokens in the evolving crypto landscape.