| 01/16/2025
2024 Crypto Highlights And What Will Shape 2025
Charles Guillemet, Chief Technology Officer (CTO) at Ledger
2024 was an undeniably pivotal year for Bitcoin and crypto, with significant tech advancements, regulatory developments, and market shifts. In this blog, I outline the main forces that shaped 2024, and what we should expect from 2025.
My global outlook is that while 2024 saw more institutional adoption and infrastructure building, 2025 will be the year of widespread adoption of blockchain tech by financial institutions. Traditional finance will continue to create financial instruments replicating Bitcoin and other digital assets, while an increasing portion of the global financial infrastructure will transition to blockchain-based solutions. Retail adoption will also accelerate, fueled by traditional financial instruments integrating digital assets and by growing interest in internet communities, particularly with the rise of memecoins.
Looking at 2024: A Confluence of Multiple Forces
Trend #1: Bitcoin Etfs Usher In New Crypto Dynamics
After a decade of repeated rejections and lingering regulatory uncertainty, the SEC finally approved Bitcoin exchange-traded funds in the U.S. in January 2024, enabling the launch of 10 ETFs the very next day.
With Bitcoin ETFs, retail investors can get exposure to Bitcoin without direct ownership, significantly boosting its awareness (and price) across 2024 (though with some drawbacks – for more, read this op-ed from Ledger’s CEO on why “A Bitcoin ETF will never be your Bitcoin”).
BlackRock’s iShares Bitcoin Trust (IBIT) became the most successful ETF launch in history, amassing over $50 billion in assets within 11 months of its 2024 debut. IBIT’s rapid growth surpassed other ETFs, including BlackRock’s own gold-focused funds, and now represents more than 50% of daily trading volume among Bitcoin ETFs.
More recently, in November, IBIT became the first Bitcoin ETF with options, dominating trading volumes with an average of $1.7 billion in daily notional volume and far outpacing competitors. With 12 spot Bitcoin ETFs collectively managing $107 billion, IBIT stands out as a market leader, with projections that it could soon surpass the largest gold ETF, SPDR Gold Shares.
Trend #2: Bitcoin Halving Dynamics And New Price Heights
The approval and growing popularity of Bitcoin ETFs significantly contributed to Bitcoin’s price surge, propelling it to a new all-time high (ATH) of $73,000 in mid-March—an unprecedented occurrence considering it happened just before the Bitcoin Halving.
The Bitcoin Halving is a pivotal event in the cryptocurrency’s lifecycle, reinforcing its decentralization and security. However, the 2024 Halving cycle differed markedly from previous cycles in terms of demand-supply dynamics and miners’ financial positions.
In prior Halving cycles, many miners faced financial strain, often forced to shut down operations or sell their Bitcoin holdings to remain profitable. This additional sell pressure impacted the market. However, in 2024, the situation shifted. Miners remained profitable despite the Halving event, and the Bitcoin hashrate even reached new all-time highs, reflecting the network’s growing strength. For a deeper dive into Bitcoin Halving dynamics, check out my previous blog.
Trend #3: Crypto Becomes A Political Topic
Bitcoin and digital assets played a significant role in the recent U.S. presidential election. During the previous administration, the Democratic Party largely maintained a hostile stance toward crypto. In contrast, Trump and the Republican Party announced plans for a more crypto-friendly future. Trump even made an appearance at the Bitcoin Nashville event, where he outlined several pro-crypto initiatives, including promoting Bitcoin mining in the U.S., dismissing Gary Gensler as SEC Chair, and announcing a potential strategic Bitcoin reserve. Trump’s election victory served as the catalyst the Bitcoin market had been waiting for, attracting both institutional and retail investors.
However, I believe a different election outcome would not have drastically altered Bitcoin’s trajectory. The Bitcoin price dynamics are primarily driven by its decreasing supply due to the Bitcoin halving event, and sustained demand, particularly with the advent of Bitcoin ETFs.
Trend #4: Institutional Players Join The Crypto Game
Several major companies like MicroStrategy continued aggressive Bitcoin acquisitions throughout 2024, while other firms explored Bitcoin as an inflation hedge. Microstrategy developed several financial products that involved raising debt to buy Bitcoin in exchange for an option on MSTR.
Institutional investment surged, making 2024 a pivotal year for traditional finance’s integration with crypto. An important example is the creation of the BUIDL fund by Blackrock, a tokenized money market fund that quickly became the largest tokenized fund globally.
Trend #5: Real-World Tokenized Assets Get Real
Institutional adoption operates on two fronts: TradFi players either create financial instruments wrapping up on-chain value or bring traditional assets—or real-world assets—onto the blockchain. This latter aspect represented a key trend in 2024.
Real-world assets (RWAs) represent tokenized forms of tangible financial instruments like bonds, real estate, or treasury bills, enabling their integration into decentralized finance (DeFi). In 2024, RWAs gained significant traction as institutional players like BlackRock (BUIDL fund), Franklin Templeton, and JPMorgan expanded their offerings, leveraging blockchain to increase transparency, liquidity, and accessibility.
Innovations included tokenized Treasury funds, broadening DeFi’s appeal beyond crypto-native participants. Key ecosystems like Ethereum, Avalanche, and Polygon are becoming hubs for RWA infrastructure.
The exponential rise of RWAs in 2024 marks a paradigm shift in financial markets. By bridging traditional finance and blockchain. RWAs are poised to democratize access to institutional-grade assets, enhance liquidity, and foster global financial inclusion.
Trend #6: Stablecoins Skyrocket
The growth of stablecoins in 2024 has been remarkable. By December, the stablecoin market reached an all-time high with a 48% year-over-year (YoY) increase, surpassing $200 billion in total market capitalization. Tether’s USDT remains the market leader, commanding approximately $140 billion of the total market.
Traditional financial players also made bold moves in the stablecoin space. Stripe, for instance, completed a $1.1 billion acquisition of a stablecoin-focused firm, underscoring the growing use of stablecoins for payments and remittances. The European stablecoin market expanded, but at $367 million in valuation, it remains a fraction of the USD-dominated stablecoin market.
Today, the landscape of stablecoins remains fragmented with different regulatory frameworks and ways to handle stablecoin yields. For now, most stablecoin issuers invest most of the USD collateral into US T-bills giving them ~5% yield annually. This is how Tether amassed $5.6 billion in 2024!
Interestingly, Tether has played a pivotal role in the U.S. financial ecosystem, particularly in the U.S.’s debt management. In 2022, Tether established a discreet partnership with Cantor Fitzgerald, one of the 24 U.S. primary dealers authorized to directly interact with the Federal Reserve for Treasury bond transactions. This arrangement gives Tether unparalleled liquidity and stability. When Tether needs to mint or redeem large amounts of USDT, it can directly engage with the Federal Reserve via Cantor Fitzgerald, bypassing the need to secure liquidity through the open market.
This setup provides a competitive edge while aligning Tether’s growth with U.S. debt issuance. For example, in markets like Argentina, where USDT increasingly replaces local currencies, Tether’s expansion supports the U.S. Treasury by facilitating debt sales.
Looking ahead, the stablecoin landscape may see significant growth in the future as some issuers explore returning investment yields directly to holders. While this innovation carries regulatory risks, it could reshape the market and attract even greater demand.
Trend #7: Infrastructures Become Increasingly Scalable
During the previous cycle, blockchain infrastructure—particularly Ethereum—struggled with scalability, making it nearly impossible to support applications with large user bases. In recent years, the crypto ecosystem prioritized solving this challenge, with significant VC investments driving progress.
Two competing visions for scalability have emerged. Ethereum aims to become a settlement layer with transactions handled by Layer-2 solutions. While this approach has advanced, it introduces challenges like ecosystem fragmentation and misaligned incentives. In contrast, unified and scalable blockchains like Solana, Sui, and Aptos offer impressive performance, with Solana leading in growth and activity.
Ethereum’s ecosystem increasingly relies on rollups, with zero-knowledge (ZK) technology dominating but still in early deployment. Among Layer-2 solutions, Coinbase’s Base has excelled in 2024, achieving 9.4 million daily transactions, $2.05 billion in DEX volumes (a 31x annual increase), $12.45 billion in Total Value Locked (TVL), and 13.7 million new users in October alone.
Several protocols offering yield on Bitcoin have emerged, often marketed with misleading terms like “Bitcoin Staking.” Some, like Babylon and Botanix, mimic Eigenlayer by requiring users to lock Bitcoin to secure other applications or Layer-2s, while others, such as Mezo and Acre, bridge Bitcoin to Ethereum to leverage DeFi. However, these protocols are limited by Bitcoin’s protocol constraints, prompting calls for updates to unlock new possibilities.
One promising proposal is adding new OP_CODES to Bitcoin’s scripting system to enhance scalability and enable new applications. OP_CAT stands out as a likely candidate due to its presence in Bitcoin’s original design and adoption in Bitcoin clones like Bitcoin Cash. OP_CAT could enable several use cases, including zero-knowledge (ZK) proof verification, allowing ZK rollups to settle on Bitcoin—a concept strongly supported by Starknet, which has already demonstrated its feasibility.
Trend #8: Consumer Applications Remain Quiet
The consumer blockchain application space in 2024 remained relatively quiet, with Polymarket standing out as a highlight. Polymarket, a decentralized prediction market, allows users to trade on real-world event outcomes, from elections to economic trends. Its transparency, low fees, and intuitive interface attracted a diverse user base, including traders and institutions, cementing its position as a leader in merging DeFi with data-driven decision-making.
DeFi platforms saw notable growth, particularly lending protocols like Aave, which surpassed $35B in deposits, and Morpho, which reached $6B. Trading platforms and Automated Market Makers (AMMs) also flourished. Jupiter on Solana achieved $1.8T in trading volume, a massive leap from $35B in 2023, despite bot activity skewing some figures. Bots on Solana and Base alone generated $210M+ in fees, with innovation in tools like Telegram-based trading leading the charge.
Another standout was Hyperliquid, a Layer-1 blockchain offering ultra-fast, low-slippage decentralized trading. On November 29, Hyperliquid airdropped 31% of its native token, HYPE, to nearly 100,000 users. With allocations averaging $45K–$50K, the event ranks among the most lucrative in crypto history, spotlighting blockchain’s ability to reward early adopters and push technical boundaries.
Looking Ahead: What Will Shape 2025 In Crypto?
Trend #1: Crypto Markets Will Continue To Grow
In 2025, we will witness the next phase of the current market cycle. In the coming months, Bitcoin prices are expected to see significant growth, driven largely by traditional finance allocating a substantial portion of assets into the cryptocurrency. Over time, market cycles are likely to become less dramatic as the impact of the Bitcoin halving diminishes. However, 2025 could see amplified growth fueled by external factors such as more favorable regulations and increased institutional adoption.
A major Bitcoin rally is anticipated, likely followed by a surge in altcoins, leading to a decline in Bitcoin dominance. Among altcoins, memecoins could play a surprisingly pivotal role, as retail investors flock to these community-driven tokens in droves.
Trend #2: Crypto Narratives And Use Cases Will Be Mostly Financial
Traditional finance will continue to provide easier access to crypto for its investors. Institutions are expected to expand offerings such as ETFs, options, derivatives, and debt instruments aimed at acquiring crypto. We’ll also see these assets increasingly integrated into pension funds and broader investment strategies.
Simultaneously, traditional finance will deepen its adoption of blockchain technology to modernize operations. A key development is the tokenization of real-world assets (RWA), where financial instruments are represented as blockchain tokens—set to become a massive trend in the coming years. Financial institutions will also turn to DeFi for everyday operations, leveraging its cost efficiency and programmability. Automated Market Makers (AMMs) and lending protocols are foundational to this transformation, laying the groundwork for an entirely new economic and financial system powered by programmable money and nearly cost-free infrastructure.
Payments will undergo a similar revolution. Stablecoins and Layer 2 or fast Layer 1 blockchains enable faster, cheaper, and more efficient transactions than traditional payment systems. Companies like Stripe, BlackRock, and JPMorgan are driving innovation in tokenized assets, payments, and modular blockchain infrastructure. While blockchain has the potential to disrupt the payment industry, established players hold a strategic advantage with their global adoption and presence.
Trend #3: AI and Crypto Will Converge
With the exponential rise of AI, distinguishing humans from bots will become increasingly challenging, making cryptography and blockchain technology essential tools for authenticating the identities of people you know and trust.
Meanwhile, miners will increasingly repurpose their infrastructure to support AI operations, as AI proves to be highly energy-intensive. The additional energy costs for AI are relatively small compared to the capital expenditure (CAPEX) required for Bitcoin mining. This makes AI opportunities particularly attractive for companies with existing mining infrastructure.
Finally, autonomous agents will begin to reshape on-chain interactions, introducing new possibilities for decentralized systems and programmable economies.
Trend #4: Regulatory Stances Will Get Clearer
The regulatory landscape for crypto will remain restrictive in Europe but more permissive in the United States and much of the rest of the world.
Several nations, including the United States, may establish strategic reserves of cryptocurrency as part of their economic strategies. Crypto is also poised to emerge as a powerful economic weapon wielded by different nation-states to advance their geopolitical interests.
Central Bank Digital Currencies (CBDCs) will be introduced in multiple countries, with Brazil being a notable example. Meanwhile, Tether could effectively become a de facto US CBDC, serving as a tool to facilitate the sale of US debt on a global scale.
Concluding Remarks
2024 has been a transformative year for the crypto space, with Bitcoin and blockchain technology continuing to drive institutional adoption and push boundaries across financial markets and regulatory landscapes. From the unprecedented growth of Bitcoin ETFs and the rise of real-world tokenized assets, to the surge in stablecoins and advancements in blockchain scalability, the stage has been set for a dynamic future.
As we look ahead to 2025, we can expect crypto markets to continue expanding, with traditional finance playing an increasingly integral role. The intersection of AI and blockchain promises new innovations, while regulations across different regions will shape the global crypto landscape. Crypto’s evolving role as both a financial instrument and a geopolitical tool will create game-changing opportunities.