What Bitwise Knows About Bitcoin’s $200,000 Prediction?

Could 2025 be the year Bitcoin hits $200,000, crypto unicorns make their Wall Street debut, and tokenized assets go mainstream? Let’s understand why.

The crypto market in 2024 has been nothing short of transformative, with major milestones taking center stage throughout the year.

Against this backdrop, Bitwise has focused on the next big trends in the industry by making a series of bold predictions for 2025.

Let’s dive into the details of each prediction and break down the market conditions to evaluate how realistic these predictions are and what they could mean for the future of the industry.

Bitcoin’s rise fueled by ETFs and adoption

The first of these claims is that Bitcoin (BTC) will rise above $ 200,000 in 2025. To put this in perspective, Bitcoin is trading at $100,500 as of December 12; This is a small step back from the all-time high of $103,900. a week ago, on December 5th.

BTC Price Chart | Source: crypto.news

This decline, representing a decline of 3.5%, followed a broader market correction following the extraordinary bull run earlier in the year.

Bitcoin first broke its all-time high of $73,000 in March, setting off a wave of optimism that culminated in November when Donald Trump was elected the 47th President of the United States.

His administration’s pro-cryptocurrency stance has instilled new confidence in the market. Although the recent pullback has eased the frenzy, the overall bullish sentiment remains intact.

Fueling this optimism is the explosive growth in Bitcoin ETFs, which Bitwise predicts will attract more inflows in 2025 than in 2024.

Since the launch of spot Bitcoin ETFs earlier this year, total assets managed in these ETFs have reached a staggering $113 billion as of December 12, according to CoinGlass.

BlackRock’s iShares Bitcoin Trust (IBIT) has emerged as a frontrunner, taking in the lion’s share of inflows. Last week, a record-breaking $3.85 billion flowed into digital asset funds, with BlackRock accounting for $2.6 billion of that total.

Bitwise’s third prediction is closely linked to the first two predictions, which predicted that the number of countries holding Bitcoin will double by 2025. The idea of ​​nation states hoarding Bitcoin is not new, but it is gaining traction as governments realize Bitcoin’s potential as a reserve asset.

Eight countries currently hold Bitcoin, with the United States leading the pack with over 207,000 BTC worth more than $20.6 billion as of today. China follows closely behind, holding 194,000 BTC worth $19.3 billion.

Other notable holders include the United Kingdom, Ukraine, Bhutan, and El Salvador, with holdings ranging from a few thousand to tens of thousands of BTC. Collectively, all these countries control 529,558 BTC; This amounts to roughly 2.52% of Bitcoin’s total supply of 21 million coins.

If the number of countries holding Bitcoin truly doubles, we could see a profound shift in geopolitical strategies; Bitcoin could serve as a new kind of reserve asset.

Market potential of Coinbase and MicroStrategy

Bitwise’s next predictions for 2025 claim that Coinbase (COIN) shares will surpass $700 per share by 2025. Currently trading at $313, Coinbase has gained 100% year-to-date.

For context, Coinbase’s all-time high was $429.54 achieved at its debut on April 13, 2021; Its lowest point was $31.55 on January 5, 2023.

From its all-time low to today’s price, the stock has shown a dramatic turnaround, rising over 900%. However, an additional increase of 120% would be required to reach the predicted $700 level.

Another fascinating prediction focuses on Coinbase’s potential to enter the S&P 500 and MicroStrategy’s potential to enter the Nasdaq-100.

For Coinbase, joining the prestigious S&P 500 would mean its maturation as a blue-chip stock reserved for companies with market capitalizations exceeding $18 billion and meeting certain profitability criteria.

Although Coinbase has faced volatility since its IPO, its strong recovery in 2023 and steady performance in 2024 make it a viable candidate for the index.

On the other hand, MicroStrategy’s transformation from a business software company to an enterprise Bitcoin pioneer has redefined its presence in the market, with its stock price increasing by 500% since the beginning of the year and trading at $411, down from $52,000 as of this writing. The week’s high was $543.

The idea of ​​MicroStrategy joining the Nasdaq-100 and possibly the S&P 500 has made a splash. The company is a strong competitor for the Nasdaq-100 and an announcement is expected soon, according to Bloomberg ETF analyst Eric Balchunas.

$MSTR will probably be added $QQQ On 12/23 (announcement coming 12/13). Moderna is likely to get the boot (symbolic). Below is the best estimate of additions/drops. @JSeyff. Probably a weight of 0.47% (40th largest holding). There are $550 billion worth of ETFs tracking the index. S&P 500 adds next year probe. pic.twitter.com/rmTavtvWQL

— Eric Balchunas (@EricBalchunas) December 10, 2024

But inclusion in the S&P 500 remains more challenging due to stricter criteria and the index committee’s selective approach.

Another exciting prediction for 2025 is that at least five crypto unicorns will go public in the US. There are currently around 30 crypto unicorns operating in the US — including well-known names like Ripple (XRP), OpenSea, and Chainaliz. The pipeline for potential IPOs is robust.

The influx of crypto-related IPOs will not only provide new investment opportunities but also mark the maturation of the industry as it transitions from niche to mainstream.

Crypto’s path to 401(k) plans

Bitwise’s next prediction for 2025 revolves around the U.S. Department of Labor potentially loosening its current guidance on including crypto in 401(k) retirement plans.

To understand the potential impact, it is important to first explain the current situation and explain why cryptocurrency in retirement accounts is a controversial topic.

As of now, the Department of Labor maintains a cautious stance towards crypto in retirement plans. In March 2022, the agency issued a compliance bulletin warning fiduciaries to exercise “extreme caution” when allowing cryptocurrencies in 401(k) offerings.

The DOL expressed concerns about the speculative nature of cryptocurrencies, price fluctuations, regulatory uncertainties, and risks of fraud and theft.

The agency argued that these factors make digital assets unsuitable for most retirement savers, whose investment horizons are long and risk tolerance is often low.

According to this guidance, it is rare for crypto to be included in 401(k) plans. A few examples of integration have faced immediate scrutiny, such as Fidelity offering a Bitcoin option for 401(k) plans in 2022.

The DOL effectively discouraged broader adoption by admonishing Fidelity and other firms offering similar products to ensure compliance with fiduciary duties.

Employers are hesitant to expose themselves to potential liability, resulting in limited crypto assets in retirement portfolios.

If the prediction of easing guidance in 2025 comes true, this would mark a major policy change. Such a shift will likely be driven by increased demand from a younger generation of workers who see crypto as a legitimate asset class.

Surveys have consistently shown that millennials and Gen Z investors view crypto as a vital component of their long-term financial strategies. For example, a 2023 study from Charles Schwab found that 47% of millennials currently held crypto in some capacity, and 45% said they were interested in including it in their retirement accounts if given the option.

The potential market impact of this change is huge. US 401(k) plans had approximately $7.7 trillion in assets as of December 2023, according to the Investment Company Institute. Even a small percentage of this allocated to cryptocurrencies could inject heavy liquidity into the market and further legitimize the space.

Stablecoins and tokenized assets

Bitwise’s predictions for 2025 also include a bold look at the stablecoin market and the tokenized real-world asset space.

The initial forecast sees stablecoin assets doubling to over $400 billion; This is a significant jump from the current market capitalization of $207 billion as of December 12.

Tether (USDT) dominates this market with a dominant share of approximately 67.6%, supported by a market cap of $140 billion.

USDT’s closest rival, USD Coin (USDC), lags behind with a market cap of $41 billion, making it approximately 3.4 times smaller.

Stablecoins are frequently used as trading pairs on exchanges and act as a bridge between crypto assets and fiat currencies. Moreover, their role in facilitating cross-border transactions has also attracted attention, especially in regions where access to traditional banking services is limited.

The second forecast focuses on the tokenized real-world asset market, which is expected to reach $50 billion by 2025. According to a September 2024 Binance report, the total value of tokenized RWAs has reached over $12 billion, an all-time high excluding stablecoins. .

On-chain real-world assets (“RWAs”) have reached an all-time high.

Our new report explores this recent growth, outlines key RWA categories, and offers a technology-focused tour of some of the most interesting protocols in the space.

Keep reading 🔽https://t.co/1w8gr3Nrkg

— Binance Research (@BinanceResearch) September 13, 2024

RWAs refer to blockchain-based representations of physical and financial assets such as real estate, government bonds, commodities, and even fine art. Tokenization allows these assets to be broken down into smaller units, making them more accessible to a wider range of investors.

Major categories in the RWA space include tokenized U.S. Treasury securities, private credit, and real estate; Emerging categories such as carbon credits and air rights are also gaining traction.

Traditional asset managers have already begun tokenizing illiquid assets, such as real estate or fine art, to offer investors opportunities to diversify their assets in ways that were previously challenging or cost-prohibitive.

A June 2024 McKinsey report estimates that the tokenized market could grow to $2 trillion by 2030; This is supported by the increasing demand for transparency, efficiency and fractional ownership in financial markets.

The road ahead

The future of the crypto market looks exciting; Bitwise’s 2025 predictions point to big changes ahead. Bitcoin could reach new highs, stablecoins could double in value, and tokenized real-world assets could gain traction as the next big thing. But these changes will depend on how the market grows, how regulations evolve and how technology keeps up.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.