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Bitcoin (BTC) and digital assets had an excellent finish in 2024, with increasing usage, adoption, and investor interest growing throughout the year. So, what’s in store for 2025?
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Bitcoin has now taken the main stage. Interest from individuals, corporate entities, and governments is now on a substantial uptrend. With talks of countries such as El Salvador, Bhutan, and now the United States expanding strategic Bitcoin reserves and asset management firms acquiring 10s of billions of dollars in new Bitcoin ETF subscriptions, interest from investors remains in 2025, but we “err on the side of caution” as bitcoin gets increasingly popular and loud from investors and pundits.
Historically speaking, Bitcoin is closer to a halving cycle at the top than the bottom. This four-year cycle has played out nearly perfectly from the lows seen in 2022. With Bitcoin up over 500% from these levels, are cryptocurrencies entering an overbought phase of the market in 2025? Are the promises of strategic reserves from nation-states enough to keep the market buoyant in 2025?
The world is getting increasingly digital. Demand for sovereign, digital money outside the purview of world governments remains attractive as an alternate store of value. Beyond trading, the ownership of blockchain-based assets such as BTC, Ethereum (ETH), and others provides owners with the freedom to transact at will, where users have confidence in each coin’s respective monetary policy and vision for the future.
Artificial intelligence and autonomous agents remain a key theme for digital assets in 2025. Can AI agents open bank accounts and pass know-your-client checks at traditional banks? Do banking services fulfill the needs of AI agents to conduct transactions in the digital economy in an efficient manner? The answers to these questions are a resounding “no” today—and we believe digital assets are synergistic to AI and will fill these voids.
In 2025, we expect that AI agents and other autonomous systems will continue to utilize digital assets just like we humans have since the genesis of Bitcoin. These systems will transact freely between one another and perhaps invent new trust systems on top of blockchains altogether. The possibilities begin to look boundless as both man and machine inch closer towards achieving singularity. To put it differently, human investors will now need to consider utilizing or competing against AI or machine-based investors in the years to come, putting an emphasis on the sheer magnitude of this shifting market landscape. To us, this is something to be both excited about but also cautioned about.
Digital asset markets are very reflexive to new anticipated changes in demand. Given the promise of a strategic Bitcoin reserve from the largest economy in the world, the United States, it’s no surprise that the price of Bitcoin has remained buoyed since incoming president Donald J. Trump made these comments in July 2024. Now, with his inauguration complete, investors are doubting whether something like a strategic reserve of Bitcoin is actually possible. Since these facts have been priced in for over six months now, we remain cautiously optimistic about the price of Bitcoin throughout 2025, as we attribute much of the second half of 2024 upmove as being driven by this anticipation.
Meanwhile, other smart contract platforms, such as Ethereum or Solana, are well-suited to capture the synergies of AI. By nature, smart contract platforms are “turing-complete” systems, each with their own native coding languages. We foresee these networks not only attracting more AI-based capital for transaction execution but attracting AI-based technological innovation. In 2025, we expect that AI systems will create novel on-chain inventions of their own, solidifying smart contracts as the go-to systems for AI creativity. Increasing interoperability between smart contact networks and AI remains a core focus of our research efforts in 2025.
Investors’ eyes will remain fixated on the U.S. Federal Reserve in 2025 as anticipated interest rate cuts have been put in question. A hawkish Fed will certainly impact market liquidity and demand for digital assets as the U.S. dollar gains in strength and attention. We anticipate that 2025 will be a balancing act between dollar demand and persistent innovation, which we are seeing in digital asset markets. Despite anticipated U.S. dollar strength, digital assets still remain outside the scope and control of global governments, and while on-chain economies are not always directly correlated to nation-state economies, investor preferences certainly are—and this will be a key theme to watch in 2025 as nation-state adoption of bitcoin and other digital assets begins to take hold.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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Connor Loewen
Connor Loewen is 3iQ’s cryptocurrency analyst. Connor has been involved with public blockchain networks and cryptocurrencies for over 7 years. More recently, this includes 3iQ’s new strategies including Ethereum staking ETFs and other forms of alternative crypto asset exposure.
