2024: A Year of Crypto Transformation—Bitwise’s Bold Predictions for 2025

welcome to bank list where we explore the 2025 Frontier today on the show we got bit wise's 2025 predictions they got 10 of them they're extremely bullish Matt Hogan and Ryan raspon from bitwise coming on the show to give us their I think very well polished uh very strong predictions I enjoyed every single one of them so strap yourself in it's that time of the season it's December we're wrapping up the year we're going to reflect very quickly on 2024 but then really get into what they think is coming down the pipe in 2025 uh it's some pretty exciting stuff before we get into that content however a message from

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and then toward the end we've got actually a bonus prediction at what point in time will Bitcoin surpass flipping gold we got that number for you too so let's get right into the episode with Ryan and Matt but before we do we want to thank the sponsors that made this possible including our recommended exchange for 2024 that is Kraken go create an account want to know the exchange we at Banos Ed to buy sell and trade crypto it's Kraken one of the longest in most secure crypto Platforms in the world with tools for every type of Trader to get started over 13 million users trust Kraken with their funds

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staking your ctsi before the votes open bank list Nation the year is coming to a close and to help us close out the year we've got Matt Hogan the chief investment officer over at bitwise along with Ryan raspon the head of research at bitwise guys welcome back on to Bank list we had you guys on together uh in the ETF part of this year feel like we might to like a little bit of a Spotify wrapped kind of reminiscing of the year that was uh but man I think this year really started off not great and is ending on one of the highest notes that crypto has ever had so really honored

that you guys are able to join us and kind of wrap up this year and project forward Matt Ryan welcome to bankas thanks for having us we're excited to be back looking forward to it so yeah I I do want to do that Spotify wrapped of crypto 2024 if you guys don't mind how would you summarize the year that was and maybe just to really set the tone here we're going through guys's 2025 predictions you guys got 10 of them they're bangers I I loved every single one of these things it's one of the better yearly predictions that I've ever seen but I really want to set the stage before we get into the predictions I

want to kind of again do the Spotify W of 2024 how would you guys uh characterize 2024 how how will you place it as in in crypto's broader Legacy how will it be remembered Matt let's start with you oh man I almost want to say it's the goat it's pretty close to that it was a fantastic year I think if you think back to where we were a year ago there was no Bitcoin ETF uh the idea of Institutions moving in in Mass was a long way coming there was no ethereum

ETF uh the administration was extraordinarily hostile to uh crypto in fact a year ago almost today JB Diamond testified before the house Financial Services committee that the government should shut down crypto that's where we were and you fast forward to today we have you know crypto assets at or approaching all-time highs you have massive institutional buying you have a pro crypto Administration coming in you have a crypto Zar that understands

crypto coming in you have a chair of the coming in that used to work uh for the digital Chamber of Commerce and the token project there it's unbelievable so I'd say you know maybe not the goat but pretty close to the goat from years yeah I think if you zoomed out and you were heading into 2024 you might hope for one or two of those things that Matt just mentioned and it's kind of crazy sitting here in December to think about that so many things have really happened Bitcoin ETFs we had you know a bunch of

progress in in Congress in May or June of this year ethereum ETFs we've had a crazy amount of rallies across every crypto asset we have tons of wins in the US 2024 election the SEC we have new position in DC that are headed by crypto enthusiasts I mean any like two of those things would have made 2024 a great year and I'm sure we're missing 10 other things that happened over this past year that really contributed to how great of a year it was so I I've never been more excited about the outlook for crypto I think maybe if I were to summarize this

year I would definitely say Whiplash but in a very positive direction as in coming the 2023 might have been like crypto's worst year in terms of just sentiment uh Onslaught uh just regulatory oppression uh I mean we had there was once upon a time there was Mount gaau but Mount gox was catastrophic but the industry was so small FTX was also catastrophic and the industry was large at that point and we were attracting a large amount of attention and that really defined 20122

and 2023 and now in 2024 towards the end of 2024 it seems to be a complete reversal of that so I think it kind of went from like industry lows in terms of sentiment and you know Market uh price action to just industry high so one of the biggest just gaps uh between where the year opened up and where the year finished absolutely massive absolutely massive we were still facing operation choke point 2.0 you couldn't say crypto in polite circles uh I don't think

people have really grasped the degree of the switch that's happened over the last year I think Whiplash is a a good word to describe it although sort of a positive version of whiplash to be sure that sets a up I think for the predictions going into 2025 and um I mean we're feeling bullish finishing the year that was uh 2024 so let's dive into the predictions as David said there's 10 of them and these are neatly bundled up in a report that you guys issued that I believe comes out with the Airing of

this episode so we're going to include in the show notes today so uh why don't we start with number one you guys lead with price which is like the thing that most uh you know guests make us wait for on these episodes right they don't lead with price but you lead with price so give us the price point for Bitcoin ethereum and salana the mag 3 uh give us the historic what they did in 2024 and then what's your prediction for the price on these big three Assets in 2025 I'm excited excited to talk about this

this was a big debate at the team it bit wise where do we l in for our price targets for 2025 in the big three I think it's a really great way great way to put it here for or the mag 3 is a really great way to put it here for crypto first of of course you have to start with Bitcoin price predictions I think this one's a little bit funky in the sense that uh our estimate of 200,000 might be on the lower end of a lot of the price predictions out there for next year but that's kind of for Bitcoin to be clear not ethereum not for Bitcoin it's 200,000 we love our e so you know we'll

get to Ether we'll get okay okay I would love to see 200,000 ethereum I don't think our compliance team would be happy if I came out here and said that was going to happen but uh but for Bitcoin nonetheless we expect Bitcoin to hit 200,000 next year driven by a bunch of different catalysts continued adoption from institutions via growth of these ETFs we think more and more corporations will start buying Bitcoin we're already seeing signs of Corporations leaning into the mini micro strategy model over the past few weeks and months now if governments start buying Bitcoin

everyone's talking about a strategic Bitcoin Reserve we think if governments start to buy Bitcoin we could see that 200,000 price Target become 500,000 or more pretty quickly so we're really excited about what Bitcoin could do from here Matt you want to take ethereum sure yeah I also feel like our ethereum price Target is conservative so you know we're looking at ethereum to trade up to uh $7,000 uh I think it may take an eye towards $10,000 my view on eth is it has

both uh actual momentum and sort of catch-up momentum uh built into it what you're starting to see over the last few weeks uh we think the market has somewhat overlooked the strong progress we've seen in the eth ecosystem particularly the growth in activity on the layer 2 networks um and it it's going to come back to it we see it as almost a contrarian bet so I don't know if Bitcoin or ethereum is more sort of understated in terms of where we think these prices are going but I feel pretty confident about both of them I'm going

to try and put my bitwise hat on uh 200,000 Bitcoin $7,000 eth uh700 50 salana this is a doubling of all three all three you guys are predicting is a is a doubling uh and the consumers of this report the audience of this report which maybe we should touch on a little bit is going to be you know crypto Outsiders mostly you guys are reaching out like doing God's work trying to bring you know crypto investors into crypto and I think the crypto people are looking at these numbers and like man those are rookie numbers you got to pump

those numbers up but uh for Outsiders they're thinking a a double in a year because they're not used for numbers to double so quickly uh and so I I think what you guys are the strategy here is like let's let's give the highest number that we are like 100% confident that that we can hit and then there's more more upside beyond that you know for the wink win crypto natives uh that's kind of that's kind of what I think is going on here to get give us the real numbers then you also want the oh oh man yeah I love I love the

idea of our paper week I mean look I think that's about right I will say last year you know Bitcoin was trading at about $40,000 we only had a bitcoin price Target we said it would get to 80 and that turned out to be too pessimistic we'll see where it ends the year but certainly above 80 I think you know particularly to the first two price targets the thing about Bitcoin once it gets above $100,000 is where would it stop there's vastly more buying of Bitcoin than there is new Bitcoin produced at this moment

corporations alone bought 250,000 Bitcoin last year and it only produces about 170,000 Bitcoin a year so there's more demand than Supply that's before we get to ETFs or governments it's been hitting price Bubbles at all-time highs and $100,000 because those are levels where people will sell long-term holders will sell once you get above a hundred who knows where long-term holders will sell will they sell at 150 why would they sell at 200 why I think could

easily get to 250 I think as Ryan mentioned if there's a strategic Bitcoin Reserve you're talking about $500,000 Bitcoin and for people who think that's crazy you got to remember a few years ago Bitcoin was at $3,000 right and it it ripped straight to 60 so you can have those kinds of returns I feel something similar with eth and $10,000 I think if eth narrative turns around and people look at the sort of massive growth of transaction activ on

things like Bas or they look at what's going on at uh at Stark net and other layer 2os and they get excited about this space and the growth I think it'd have a gravitational pull to $10,000 I don't know what Ryan thinks about that at $10,000 I imagine there'll be a lot of long-term eth holders who would be willing to sell and that would be significant behavioral overhead but you know once we get above new all-time highs there's almost this price gap or this air gap until you get to the Next Behavioral cell level and for eth that's

$10,000 so I do think that is like a gravitational pull that we could see if we get a momentum above previous all-time highs and then good narrative I could easily see it running up to 10 G 10 grand and then sitting there for a bit yeah I I agree with with Matt on that I would just say a bit of how I feel about ethereum this year is I feel it's kind of taking the spot of where salana was heading into last year Vibes in the salon Community had never been lower in end of 2022 coming in in 2023 and then the narrative turned Matt just

spoke about if the narrative turns for ethereum what could possibly happen and I think we're already seeing glimpses of that coming through over the past month or so ethereum's performed really well since the election and I think if the ethereum or the narrative for ethereum continues to shift the way it has so far for the next month or two months and we see price continue to gradually rise I think it gets some of that Salon esque momentum that salana had last year for ethereum in 2025 now it's not as big of an asset so it probably won't have the same amount of impact on price as this

narrative shift for salana did but I think ethereum is really well set up for 2025 what would you say are the inputs that are blowing into the sales of all of these crypto assets Bitcoin Salon ethereum the whole entire industry what's really the input driving uh the bullish year that we think 2025 will be that's a that's a really good question I think there's a bunch of catalysts or potential Catalyst for next year that are blowing the sales forward for crypto and then there's a few potential head ones you kind of have to weigh the pros and cons list and me when I sit back and look at

where the Market's headed there's so many more Pros or catalysts than potential headwinds some of those I think are going to be led by institutional Investments corporations governments institutional investors one anecdote that we had last year going to 2024 was that majority of wealth managers and financial advisers had no expectations that Bitcoin ETFs would start trading in 2024 more than 90% or something like that thought it wouldn't happen in 2024 and then two weeks in we had Bitcoin ETFs and they're now the most successful ETF launches of all time

it's so weird though like why were they so wrong just I know that's a you side point here but like why were they so wrong about that it's it's anchoring bias I think because people have been talking about those ETF approvals for year after year after year and they had been wrong and wrong and wrong and wrong so you know it's a little bit of the boy who cried wolf and I think that just uh colored everyone's views and made them not as positive as they should have been okay well I interrupted your flow Ryan you're talking so the institutional investors arriving and you know now they

see it right they have products that they can buy what else exactly now they see it they're still waiting in some instances you have these large wirehouses like the Morgan Stanley's Marl lynches Bank of americaas of the world this is majority of the wealth controlled in America by wealth managers and they're still being held back by the different approvals and compliance requirements and investment committee uh meetings and approvals that are happening at these large firm so majority of wealth managers actually haven't even been Unleashed to these new products so we see a huge level of demand coming from those investors when

they get access and we believe that the doors will open in 2025 for majority of those money managers so that'll be a lot of institutional capital of course if we get a strategic Bitcoin Reserve we think that that will just create this Bitcoin arms race where governments all over the world are buying and then there's a better regulatory environment it's impossible to to not know that going into 2025 the regulatory environment for crypto in the US has never been better we've never had a better setup for pro crypto legislation for relaxing some of

the rules and some of the uh you know back of office or back channeling that was happening to restrict crypto's growth that all is gone in a matter of weeks now uh in January and so we think that the institutional adoption the regulatory landscape Shifting the macro Tailwinds right if we have many interest rate Cuts if we see global stimulus if we see China seem is happening that's more wind in the sales of crypto assets and then you have kind of crypto specific things like bitcoin's Supply shock continuing from last year's having

Layer Two scaling on ethereum we're already seeing what's happening with the growth of Base in the past few months when it's now you know got its leadership in the L2 position but is continuing to attract more eyes and attention uh from the salana community and so you have these kind of network specific Tailwinds and then you have macro Tailwinds and you have broader crypto industry Tailwinds everything being headed kind of in the right direction in our opinion I get this visual of like a dam bursting right like it it really feels like that's what's kind of happened when you guys use terms like strategic Bitcoin Reserve I'm like

that is so crazy can you imagine that the like large governments like the United States of America stockpiling Bitcoin how crazy is that that we've entered an era where this is like indeed possible just just a quick question on the uh ETF flows so it has seemed that the last quarter or so ethereum ether ETF flows have really been picking up in fact I looked at last week and it looked like from a uh market cap adjusted perspective um ether got more inflows than Bitcoin actually on the week and so

I think that's a first we started to see uh inflows picking up does this help the the price of eth is this kind of I know you you guys have always been bullish on ether that the institutions would want it that there's a market for it in this ETF format we're starting to see that now is this the beginning of of uh something big what what uh what do you see when look at the eth ETF flows yeah it's absolutely the beginning of something big and and we we talked about this when before the eth ETFs launched I think I mentioned that I was like hoping there would be a delay you know they

would launch like a year after the Bitcoin ETFs because trafi needed time to digest the Bitcoin ETFs before they could move on to what's next and start thinking about what's next you're starting to see that happen right people are coming around they they the early adopters have moved into the Bitcoin ETFs and now they're expanding their knowledge in the rest of the crypto Market in the same way that almost every crypto investor through time has entered in some through eth but many through

Bitcoin and then expanded on and they all get their favorite asset many of them end up uh indeed with eth so we think it's a it's a small down payment on what's to come from an ETF flows there ET the EFS have already been relatively successful in the scale of most ETFs they should overshiner going to see the flows really accelerate and you're right that we've seen a little bit of a down payment on that in the past few weeks this uh transitions nicely into prediction

number two so moving on to number two uh Bitcoin ETFs will attract more flows in 2025 than they did in 2024 and I'll just read a bit of an excerpt here when the US uh spot Bitcoin ETFs launched in January 2024 ETF experts forecasted the group to see 5 to 15 billion ofl in their first year they passed the higher end of that range within the first 6 month so bullish since launching the recording ETFs have gathered almost 32 billion in inflows we expect 2025 inflows to top that so at least wait

what at least 32 more billion dollars into the Bitcoin ETFs is being predicted by bitwise but 32 is the floor it only goes up from there Matt give us some more color here if you will look I think this one is a gim me I as you guys know I come from an ETF background I was CEO of etf.com spent 15 years in that industry I've watched 5,500 ETFs launch in almost every single case year two is bigger than year one and year three is

bigger than year two and there are reasons for that these ETFs need to be approved on multiple platforms investors need to do their due diligence we move a lot faster in the crypto world than traditional investors do in uh the traditional world this is a a great chart showing exactly this uh comparing the inflows into the gold ETF versus what we've seen in Bitcoin there are two takeaways from this chart one you can see that the inflows into Bitcoin vastly

outweigh the inflows into gold in the year one but the more important story the story you don't see sort of told is watch how the gold inflows grow year after year after year right it's straight up into the right and an accelerating it doubled from year one to year two and here's the thing uh everyone was so excited in year one that they launched everyone was like this is the fastest growing ETF of all time it's amazing it's pulled in a billion dollars in the first week this thing is

outrageous and the Assumption was all the money that had been sitting on the sidelines waiting to come in had already come in and you're going to see this asmic top where it was just going to level off and you get a few hundred million in but that's exactly not what happened it hasn't happened for any ETF in the history of ETFs I don't know why it would happen for Bitcoin we're going to see these ETFs approved on Morgan Stanley on UBS on Wells Fargo we're going to see sort of the the regulatory

overhang the gray Shadow removed from these ETFs and I think $ 32 billion is absolutely the floor I wouldn't be surprised if it was significantly higher than that and I don't think the market understands this because they assume that all the flows have happened and now it's just a trickle it's exactly the opposite the slope goes up not down and uh this this was our easiest prediction to make the Bitcoin ETF launched during like a pretty dire time

in the crypto industry it was kind of the light that brought us out of the hole uh it was the thing that really kind of kickstarted the first phase of of the bull market uh and we all know what is the biggest marketer of Bitcoin bitcoin price and when Bitcoin price breaks $100,000 all of a sudden you know it's not so scammy anymore you know it's it's a little bit more than just uh you know terrorists and actually just you know the the future of Finance it's a digital gold and so all of a sudden I

think public acceptance of Bitcoin is coming back uh at year two at year two and so uh so if the number this year was 31.7 billion uh give us Matt if you will I don't know if this is allowed but give us your uh your percentage odds of it doubling that at uh 6 $64 billion what's your percentage that it break $64 billion in 2020 in this year I think it'll be close if you had given me $50 billion or up I would have said it's at least like an 80% chance if it'll

actually get to 60 I mean that would be that would be great but you know I'm bullish on price you have to you also have to combine this with our prediction that price will go to 200k which means the number of Bitcoin it has to acquire is smaller so I think it's it's at least you know it should be better than 50% odds that it doubles that's what happens in ETFs I keep seeing people expecting things to change in crypto they're like there's never going to be an ALT season it's only big well guess what that happens every time and then we get nfts

or debt well guess what they've come back there's no fouryear cycle well guess what in ETF land it's year two will be bigger than Year One I think it's going to happen uh I'm pretty pretty confident about it one other effect here you guys mentioned as one of the points uh for these numbers investors are lading up 3% is the new 1% okay 3% is the new 1% you're talking about assets under management let's remember how unallocated traditional Finance actually is to this asset class they just got off

zero what in the last like year or two and some of them are still kind of on zero trying to play catchup and and now the the frontier is going to move away from them because 3% is the new 1% when it comes to assets under management so there's a lot of catchup to do here that's the point you guys are making yeah that's absolutely right and that includes people who you know have allocated to bitcoin etf's already doubling down I think um all these Trends are working in our favor all right let's move on to prediction number three coinbase will surpass Charles

Schwab as the most valuable Brokerage in the world in stock will $700 a share uh so okay uh coin is currently trading at $340 a share when I checked it this morning uh and so your guys's third prediction is that it's going to hit 700 which is in line with the crypto assets let's just double the prices uh seems kind of safe um talk about the significance of if coinbase I've never heard of this kind of flipping before coinbase flipping flipping Charles Schwab is the most valuable Brokerage in the world talk to us what what is

Charles Schwab yeah what is I don't even know I don't know I'm not a client of charlesw talk to us about the significance of coinbase flipping Charles Schwab and just like public mind share Ryan you want to take this one yeah yeah I'm happy to take this one I mean when you think about what coinbase's business is I think we all know because we probably use coinbase in a number of different ways it's much more than just a brokerage you can use it as a checking account in a lot of instances where you can instantly earn four or five% yield on on usdc on stable coins they have a infrastructure

business that spans everything from custody and staking to to wallet Services they have a subscription based model they have huge exposure to the booming stablecoin ecosystem so in some ways it's kind of unfair to to compare them to Charles Schwab because they're very different businesses but when you zoom out and you think about the fact that Charles Schwab is kind of the king of the trading world when it comes to traditional equities then it kinds to kind of starts to look really uh impressive if coinbase flips Charles Schwab because here's this you know little industry of crypto that was born

15 years ago that now all of the sudden has a single company that's worth more than the Behemoth Charles Schwab so I think this flippening is a really really significant one for financial markets I think it's very likely to happen and I and I and I can tell David thinks we being too bearish here but uh you know I'm so excited about coinbase's business model they continue to be undervalued by Wall Street last year one of our predictions was that their revenue of coinbase would grow by more than 100% in

2024 but Wall Street had their year-over-year revenue after 2023 which we've spoken about was a bad year for crypto Wall Street had assumed that coinbase's Revenue would only grow 9% year-over-year so they just fundamentally misunder understand this business they actually do view it as a replicate of Charles Schwab but for the crypto industry and as we know it's so much more than that so I think as Wall Street continues to get surprised by the growth of coinbase and as coinbase continues to infiltrate every single corner of the crypto market and

continues to uh you know see growth and benefit from this shifting regulatory environment from this you know potential Pro legislation on stable coins to these growing ETFs most of which cuss you with coinbase that they start to benefit from all of those different types of Tailwinds I think coinbase hitting 700 is a slam dunk and I just looked like relative market caps wise like so um Charles Schwab is 150 billion I believe does not currently make the top 100 uh

assets by size so that you like the top 100 the the the lowest on that is 162 billion but I'm sure Charles Schwab is in there from time to time so you're calling for a a coinbase to go higher than Charles Schwab's 2025 price which would place them I don't know 150 160 billion or something like that one of the top 100 assets in the world that's what you're saying I think it go higher than that I mean if you if you look at this list I do this sometimes look at that list of companies and ask yourself