As a seasoned analyst with over two decades of experience in the financial markets, I find the predictions made by CoinShares for 2025 particularly intriguing. The potential impact of the US under President Trump on crypto regulation is a topic that has been hotly debated for quite some time now.
With the end of 2024 approaching, the European cryptocurrency investment company, CoinShares, has shared its market forecasts for the coming year. In their report, they’ve highlighted the significant trends that might shape the crypto sector in 2025.
The report closely examines how the US under President Donald Trump could impact the crypto market. It also discusses the emergence of Bitcoin-yielding companies as a trend to be monitored in 2025.
Trump to Overhaul Crypto?
According to a report from CoinShares dated December 11, it’s predicted that the US will experience substantial changes in cryptocurrency regulation in 2025 under President Trump’s administration. Analyst Max Shannon thinks these upcoming regulatory updates and potential support for Bitcoin mining operations could foster a welcoming atmosphere for digital assets during the year 2025.
In light of the changing US policies, it’s predicted that alternative cryptocurrencies (altcoins) might surpass Bitcoin in performance, even though Bitcoin could still be among the top-performing assets in 2025, as suggested by the analyst.
It’s expected that miners specializing only in Bitcoin mining will probably yield better returns compared to those who also invest in alternative income sources like artificial intelligence or machine production.
As a researcher delving into the world of Bitcoin Exchange-Traded Funds (ETFs), I find myself optimistic about their future, as they’ve already shown remarkable success in a short span of time. Interestingly, it’s worth noting that only 20% of these funds are currently managed by professional institutions and financial managers. This suggests a significant opportunity for expansion, particularly with increased institutional adoption.
Bitcoin Yielding – The Next Big Thing?
Another trend to be mindful of in 2025 is the emergence of Bitcoin-yielding companies. This comes into focus as businesses are now adopting BTC as a treasury asset.
Analyst Satish Patel has organized Bitcoin’s returns into three distinct groups. The initial category is the increase in Bitcoin ownership compared to a company’s stocks. The second is yield farming, a method that produces earnings by loaning out Bitcoins.
In this group, we explore various methods using derivatives to earn money from a Bitcoin savings account.
MicroStrategy, with a stash of 423,650 Bitcoins, has devised an unique “Bitcoin Yield” benchmark to evaluate the success of its investment strategy. Other firms such as Block, Marathon Digital Holdings, and Metaplanet are mirroring MicroStrategy’s approach by acquiring Bitcoin with the aim of generating profits.
The analyst mentioned that this pattern signifies a wider understanding of Bitcoin’s ability to function not just as a place to keep wealth, but also as an instrument for earning returns.
2024 saw a trend with significant businesses adopting cryptocurrency as a form of payment, according to Patel. He predicts that companies such as Amazon, Shopify, and Nike – who are already engaged in the crypto world via transactions or investments – might explore the possibility of holding Bitcoin within their assets in 2025.
What 2025 Holds for Ethereum, Solana
As for Ethereum, it’s anticipated that usage on Layer 2 networks will keep expanding in the upcoming year, as per CoinShares predictions. According to analyst Luke Nolan, the institutional acceptance of Layer 2 chains, similar to what happened with Kraken and Sony, could boost adoption significantly by 2025.
According to the analyst, it’s expected that the use of L2 (Second Language) will keep growing, leading to a surge in the need for blobs and spending on Ethereum transaction fees.
He further added that L2s would once again become a source of demand for Ethereum.
2025 marks the anticipated Pectra upgrade for Ethereum, a journey I eagerly look forward to as an investor. This update is expected to streamline efficiency, but with this progress comes challenges. The ETH token will need to strike a balance between enhancing usability and ensuring value accumulation.
Regarding Solana’s future, the report suggests that Frankendancer and Firedancer have the potential to significantly change or shape it.
The clients in question are validators designed to enhance Solana’s network structure, execution environment, and agreement mechanism to boost performance and scalability. However, it is crucial for Solana to deal with its transaction-per-second (TPS) constraints by implementing updates that promote efficiency.
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2024-12-12 10:56