Another year has passed – and wow, what a ride this year has been. It was the year, in which the sentiment around crypto assets changed after years of rather negative sentiment to bullishness. It was the year, in which Bitcoin – for the first time in its history – reached a price of 100,000 USD after “crypto president” Trump won the US election.
But let’s start from the beginning.
What happened in 2024?
In the beginning of the year, I had the following 3 key expectations for 2024:
1️⃣ Institutionals are coming: I expected the entrance institutional players. I argued that the approval of Bitcoin Spot exchange traded funds (ETFs) would pave the way for institutional investors, including asset managers, insurance cooperations, pension funds, and others to enter the Bitcoin market. And this indeed happened. In January 2024, Bitcoin ETFs were approved by the US Security and Exchange Committee (SEC). And the ETF developments are just extraordinary. Various records were broken, e.g.,
- Most successful ETF category launched in history: In just 11 months, assets under management of Bitcoin ETFs exceeded assets under management of gold exchange traded commodities (ETCs). And gold is with a market capitalization of > 15 billion USD one of the largest asset classes in the world. I would have expected this flippening to take place within years, not months.
- Blackrock’s Bitcoin-ETF IBIT reached 50 billion USD in assets under management in only 227 days (previous record was > 1300 days)
- Today, on December 23, all Bitcoin ETFs have assets under management of > 110 billion USD.
Indeed, the ETFs attracted tremendous institutional investors, such as hedge funds or also first pension funds. From my perspective, it is only a matter of time until public state funds will also invest – but more on this topic later. And besides Bitcoin ETFs, also ETH ETFs have been launched, also attracting institutional investors – I definitely did not see this one coming!
For the US, we can now expect that a very crypto friendly environment will be established – as Trump appointed very “crypto friendly” staff and aims to make the US an international crypto hub with innovation-friendly regulation. And such friendly regulation will also make crypto assets as a whole generally more attractive and will create spillover effects to other countries. My feeling is that 2024 was just the beginning of institutional adoption.
Next stop: Institutional investors in decentralized finance (DeFi)?
2️⃣ Crypto regulations: Following the SEC’s legal actions against centralized crypto exchanges (CEXes) in 2023, I expected a surge in legal measures against decentralized entities, such as decentralized autonomous organizations (DAOs) and decentralized exchanges (DEXes) in 2024. While the legal framework for these decentralized entities remains ambiguous in many jurisdictions, I expected a growing realization that they often fall within existing regulatory regimes.
This partly happened in 2024. The SEC sued Uniswap, Consensys for Metamask, OpenSea and some further decentralized finance (DeFi) players. However, the election of president Trump, his crypto friendly staff as well as the resignation of SEC chair Gary Gensler for January 2025 changes the narrative substantially. I expect a more positive environment and innovation-friendly regulation in the USA.
The key question for me now will be how this will affect Europe. From January 2025 onwards, the markets in crypto-assets regulation (MiCA) will apply in Europe. It is a first-of-its-kind regulation on all kinds of crypto services and offerings – applying to a population of 450 million citizens. While I generally see the MiCA regulation in a positive way, it is also clear that – compared to the US – where there is no explicit crypto regulation in place yet, the EU has established various hurdles for innovation around crypto services. This seems to have been desired by regulators, but the outcome could be that a “crypto-friendly US” could adversely impact the EU.
3️⃣ Digital euro: In 2023, the European Commission proposed a legislative framework for the digital euro, awaiting feedback from the European Council and European Parliament. However, as expected, no consensus between all the 3 co-regulators was reached in 2024. This was no surprise as the European elections had a tremendous impact on the Parliament’s composition and stance. As the committees just now slowly come back to their “daily business” I would even expect that an agreement is not even reachable in 2025. Of course, this would impact the decision by the European Central Bank (ECB) on the actual issuance of a digital euro as the ECB stated that they can only meet a decision as soon as the regulatory guidelines are clear.
In 2024 generally, the ECB continued its efforts around the preparation phase of the digital euro, in particular, continuing the developing the rulebook for the digital euro, launching an RFP for technology providers and more. While critique on the necessity of a digital euro remains, the case for a wholesale CBDC seems to be clearer. This year, the ECB did a very successful pilot program (“trials”) for wholesale CBDC (wCBDC). According to market participants it was a great success – ultimately, a payment volume of 1.6 billion EUR was settled as part of this initiative.
My theses for 2025
For the upcoming year, I always like to give out a few theses – typically ambitious ones. So, let’s see if they will indeed become a reality. While last year, they were pretty accurate, but this is not for sure, of course:
- Thesis 1: 3 further nations will invest in Bitcoin. This includes both investments via ETF and directly by sovereign wealth funds as well as Governmental Finance Departments. After the election of Trump and his vision to create a strategic Bitcoin reserve for the US with 1 Million Bitcoins, various states reportedly consider launching such initiatives, such as Brazil, Russia, China, Japan, and others. Even without the recent sentiment on country BTC reserves, I would have expected that state funds will be one of the next players to invest in Bitcoin ETFs. And there are various state funds out there with substantial assets under management, where even a 0.5-2% allocation of the fund would be of substantial absolute size.
- Thesis 2: ECB Council announces that wholesale CBDC will launch in 2026, years ahead of retail CBDC. Given the great success of the wCBDC trials in the EU I could imagine an announcement already in 2025 that wCBDC will be made available without volume restrictions and outside a pilot program (such as the wCBDC trials) soon, expectably for example 2026. The Banque de France as one of the most powerful central banks in the euro area has for years been very bullish on wCBDC – and the success of the trials confirms the market demand for wCBDC. This could result in a situation that even as the wCBDC project has been launched after the rCBDC project, it will be launched 2-4 years before the digital euro. I would welcome such a decision as it seems to address an existing pain point – and market demand is there.
What are your theses for 2025?
I wish you all a great start in 2025. Stay healthy, positive – and curious!
About the author
Dr. Jonas Gross is Co-founder and Chairman of the Digital Euro Association and Chief Operating Officer at etonec. He advises private-sector companies as well as central banks in developing impactful digital currency solutions. Also, he is also Co-founder and CEO of Hakata, a company bridging digital identities globally between the payments and digital assets domains.
Holding a Ph.D. in economics and drawing from extensive industry expertise, Jonas is a recognized thought leader in central bank digital currencies, stablecoins, and crypto assets. Besides sharing his insights as co-host of the „Bitcoin, Fiat, & Rock’n‘ Roll“ podcast, He is guest lecturer at the Frankfurt School of Finance and Management as well as Technical University Munich (TUM), and expert panel member of the European Blockchain Observatory and Forum.
Disclaimer: Note that the author is invested in the following crypto assets: Bitcoin, Ether.
