3 Reasons Bitcoin and the Cryptocurrency Market Promise Explosive Growth in 2025

2024 is the year when cryptocurrencies will no longer be a small corner in the financial world but will become a powerful force in the global technology and finance industry. Unprecedented political support, the rise of artificial intelligence, tokenization of real-world assets (RWA), and fierce competition in the blockchain field have shaped the past year, laying the foundation for expectations of an explosive 2025. With the world heavily impacted by inflation, the price of Bitcoin has risen sharply following the halving event in April 2024. It is worth noting that this rally was driven not only by individual investors and Michael Saylor of MicroStrategy, but also by Wall Street "giants" who entered the industry through spot Bitcoin ETFs. This momentum has even spread to Washington, D.C., where President-elect Donald Trump and many lawmakers have publicly expressed support for cryptocurrencies. Meanwhile, smart contract platforms are vying for dominance, with Ethereum's fading performance reflecting the increasing competition from rivals. In the Web3 space, new trends have become the focus, with tokens related to artificial intelligence and Real World Assets (RWA) tokenization emerging as the biggest winners of the year. Bitcoin Sets New ATH Target In 2024, Bitcoin continues to follow the standard post-halving pattern, increasing by 126% thanks to recognition from traditional finance and politicians. The newly launched Bitcoin ETF funds have changed the Bitcoin market by attracting new capital from investors and businesses looking to access BTC more easily. In January 2024, nine asset managers, including BlackRock - the world's largest asset manager, launched the first BTC ETF funds. Throughout the year, their total assets under management (AUM) surged from 27 billion USD (from the conversion of existing Grayscale funds) to 109 billion USD.

The ability to establish a strategic Bitcoin reserve fund could also drive up Bitcoin prices in 2025. U.S. Senator Cynthia Lummis, a long-time Bitcoin advocate, has introduced the Bitcoin Legislation, a plan that if passed by Congress, would lead to the U.S. buying an additional 1 million BTC to "serve as a store of value, strengthen the U.S. financial balance sheet". Whether this bold idea will be supported by the National Assembly is still a question. However, the November election has improved the prospects of this plan. Backed by the Fairshake political action committee - which spent $172 million in the 2024 election cycle, according to OpenSecrets - many cryptocurrency-friendly candidates won seats in both the House and Senate, sometimes replacing incumbents who were anti-crypto. Data from StandWithCrypto shows that more than 247 cryptocurrency-friendly candidates were elected to the House and 15 to the Senate. This is impressive considering that only 33 Senate seats were up for reelection in 2024. Competition is increasing on smart contract platforms While investors primarily focus on the role of Bitcoin as a currency, most other blockchains serve as smart contract platforms, enabling the development of decentralized applications. By 2024, these blockchains have quietly improved their technologies. Notably, Solana has released the Firedancer client application to enhance scalability, while Ethereum has implemented the Dencun upgrade to reduce transaction fees on layer 2 solutions. The market is becoming more saturated, and the evolution of blockchains to attract users and developers has become very important. The past year has shown that even Ethereum, with a range of layer 2 solutions, is at risk of losing its advantage as faster and cheaper layer 1 blockchains like Solana are closing the gap. From a financial perspective, this instability has led to a modest 65% increase in Ether's price and little interest in immediate Ether ETFs. In 2025, we will see an upgrade of Pectra on the Ethereum network, allowing external accounts to directly execute smart contract code. This will bring Ethereum closer to full Account Abstraction, improving flexibility and user experience. However, the value of Ethereum — and any blockchain — will ultimately depend on the industry's ability to provide useful applications in the real world. AI and tokenization of real-world assets are driving the development of Web3 One of the biggest promises of Web3 - a decentralized internet - has not yet been fully realized. However, 2024 has witnessed a series of important developments contributing to the realization of this goal. The biggest Web3 trend in 2024, not surprisingly, is advancements in artificial intelligence (AI). Standout projects include Render Protocol (RENDER), up 125%; Bittensor machine learning network (TAO), up 135%; and AI agent protocol Virtuals (VIRTUAL), with an outstanding growth rate of 33,000%. Overall, according to data from BlockchainCenter, AI tokens have increased by 630% in 2024. Following closely is the trend of tokenizing real-world assets (RWA), a trend that encompasses protocols based on the encryption of real assets such as stocks, debts, real estate, and art. The Ondo Finance (ONDO) financial product platform and the Mantra (OM) DeFi lending-borrowing protocol are leading in this field with respective price growth of 705% and 6,866%. It is worth noting that the stablecoin issuer Tether has also joined this trend by launching the Hadron cryptocurrency asset platform in November 2024. Overall, tokens related to RWA have increased by 570%.

With a 270% growth compared to the same period last year, DePIN is also among the leading areas of Web3. The main promise of DePIN is to allow users, device owners, and businesses to co-own and make money from the digital infrastructure. Representative examples of DePIN include Filecoin (FIL), one of the longest-running computing markets, and the Theta (THETA) streaming-focused platform, along with AI-driven protocols like Render and Bittensor. DeFi continues to follow a growth trajectory in 2024. In December 2024, the total value locked (TVL) of DeFi nearly reached an all-time high of $250 billion, according to DefiLlama. A highlight of the year was the launch of EigenLayer, a restaking protocol. Introduced in April 2024, EigenLayer quickly rose to the third position globally, reaching over $17 billion in TVL. The blockchain gaming industry continues to grow strongly, ending 2024 with nearly 9 million active wallets, a significant increase from 1.3 million wallets in 2023, according to data from DappRadar. Prominent games released during the year, such as World of Dypians, Seraph, and the viral game Hamster Kombat on Telegram, have contributed to this growth. Looking into the future, it seems that the growth momentum achieved in 2024 will continue to spread into 2025, driven by the Trump administration's support for cryptocurrencies, the current surge in Bitcoin prices, and continuous technological advancements in the blockchain field.