Golden Pear Predictions for 2025

Golden Pear Predictions for 2025 

The world of digital assets was fundamentally altered in 2024. With the re-election of Donald Trump and his nomination of a wildly pro-crypto supporting cast, we will witness the world’s largest economy pivoting from a confrontational posture into one that is supportive and nurturing. Since the downfall of FTX, every actor in digital assets, from builders to investors were firsthand witnesses and victims of the Biden administration’s global attack and lived in its shadow.  

However, 2025 will bring about a sea change. Not only will the strategy of enforcement by regulation be abandoned, but it is likely that a few key initiatives embrace digital assets and blockchain technologies. A US Bitcoin reserve, market structure legislation, adoption of stablecoins in commerce and rules that provide a transparent roadmap for builders are a few areas to watch.  

While 2024 produced great returns, the inflows were mostly related to the granting (essentially by court order) of ETF products for both Bitcoin and Ethereum. As a result of pent up demand for these long awaited products, Bitcoin in particular led almost all digital assets. Yet the community of builders continued its aggressive innovation and in 2024 amazing new pieces of infrastructure were made available.  

The result is that just as a supportive administration in the world’s largest economy takes power, digital asset infrastructure is bringing new capabilities and bandwidth to developers. Blockchains are now cheap, fast and more secure. For this reason, we believe that 2025 will unleash new applications that will finally reach mass market adoption. Here are the main themes we are watching in 2025: 

• US national Bitcoin reserve 

• Institutional adoption 

• Application layer growth and end user ownership 

• AI agents X digital assets 

• Stablecoin proliferation 

• Capital markets and venture capital backlash 

  
  

US National Bitcoin Reserve 

At the Bitcoin Nashville conference in July 2024, President Trump announced that if re-elected he would make the United States the crypto capital of the world and maintain current Bitcoin holdings, establishing a reserve. Trump’s inner circle have pushed even further, rallying around Senator Lummis’s bill that would see the US purchasing an additional 1M Bitcoin.  

While this sentiment is extremely bullish for Bitcoin and all digital assets, the mechanics of how this would happen are important to understand. First, it seems that the expectation that Trump could establish a reserve within the first few days of taking office is relatively widely accepted. This is erroneous. Without legislation, technically, all he can really do is not sell the roughly 200,000 Bitcoin currently in the government’s possession.  

Establishing a reserve of an asset that is scarce, not very liquid (only 2.3M on exchanges and decreasing) and decentralized is not a straightforward task. First, there must be sufficient support to progress this seemingly radical idea. One can argue that the last country in the world that should desire to create an alternative to the US dollar as a global reserve currency is the US.

Furthermore, providing the US’s foes with an alternative settlement currency is also far from optimal. However, as some macro analysts, like Luke Gromen, have suggested, many of Trump’s policies require a weaker US dollar to be successful. A Bitcoin reserve could be one force to help achieve this. 

Next, mechanically, we must look at how this could actually take shape. Section 14 and 16 of the US Federal Reserve Act stipulate that the Fed can only hold approved assets on its balance sheet. In the process of legislating to approve Bitcoin as a federal reserve asset, it is pretty clear to see that other players would try to gain exposure before the US Government was able to act. However, some have suggested that the Exchange Stabilization Fund could begin acquiring Bitcoin in advance of rulemaking. So perhaps the Trump administration could get a jump on accrual before rulemaking.  

Whether the Trump administration moves forward or not, and how they communicate their intentions may not matter. Game theory suggests that institutions with significant resources and quick decision-making capability in the near term will try to move first. We have already seen that Japan, Brazil, Russia, Hong Kong, Poland, Microsoft and others have made initial moves to add Bitcoin to their treasuries. What will countries like Saudi Arabia, Singapore and companies like Apple do if it becomes clear that the Trump administration intends to add Bitcoin to the Federal Reserve? In fact, perhaps some have already begun. Have a look at the actions of a wallet that we in crypto call Mr. 100, who has bought 100 BTC consistently every day for long periods of time only intermittently selling when prices get ahead of themselves. Could this be a nation state? A company? Or just a very wealthy individual? 

Golden Pear believes that the Trump administration will move forward with some type of Bitcoin reserve. We also believe there is a chance, perhaps 10%, that in fact, they choose to include small amounts of other crypto as Trump himself holds Ethereum. As a result of any communication to push Bitcoin as a reserve asset, the price of Bitcoin will increase sharply and we will see at least 5 more countries, territories or sovereign funds acquire Bitcoin. We put the price of Bitcoin somewhere between a maximum of 180k-250k this year and there will be extreme volatility.  

Institutional Adoption 

One of the rallying cries in every crypto hype cycle thus far has been, “the institutions are coming!” Indeed, in August 2020, MicroStrategy started buying Bitcoin and in February 2021, Tesla bought $1.5B in Bitcoin. However, that was about the extent of it.  

Since the Bitcoin and Ethereum ETFs were approved this year, however, this has changed markedly. BlackRock, Fidelity, and the others are now directly responsible for not only holding massive troves of digital assets, much of it on behalf of institutions that could not previously acquire it (ETH, BTC), but have also become ambassadors for the technology. Partnering with organizations like Securitize, these financial behemoths are now not only blithely suggesting that the price of these digital assets may increase, but charting a course for the tokenization of assets to play a pivotal role in the future of finance.  

Furthermore, organizations like Visa, Mastercard, SWIFT, Stripe, Paypal and Robinhood, are actively embracing digital assets and have invested significantly in research and development. Once the crypto friendly Trump administration takes the reigns of power, we are likely to see these organizations and dozens of others unleash their digital asset plans, many of which have been years in the making.  

The Trump administration will remove the dark cloud of arbitrary SEC enforcement hanging over crypto. Whether this is from actual rulemaking (earliest by end 2024) or by installing a more crypto friendly SEC, institutions will finally be able to embrace digital assets and blockchain technology in their strategies. We will also see a divergence in strategy. While organizations like BlackRock will continue to pursue the use of public blockchains and value decentralization, companies like JPMorgan will continue to try to own the entire tech stack. The former will prosper and the latter form of strategies will struggle.  

We predict that in 2025 you will see more institutions acquire digital assets. At least one of the Magnificent Seven will add digital assets to their balance sheet. Almost every large bank will show some type of blockchain adoption and Fintech companies will launch plans to use blockchain technology in an attempt to dethrone traditional finance. These plans will start to take shape in 2025, but will only really move forward in 2026. Lastly, we will see Decentralized Finance begin to be taken seriously by Wall Street.  

Application Layer Growth and End User Ownership 

In 2024, we saw the launch, growth and adoption of exceedingly performant blockchain infrastructure and more will launch in 2025. From the proliferation of Ethereum L2s, to the launch of restaking solutions like Eigen Layer, to data availability protocols like Celestia and the imminent launch of Solana’s new client, Firedancer, chains are faster, cheaper and as secure. Much as fiber provided the necessary infrastructure for Web2.0, the new generation of blockchain infrastructure provides an invaluable new design space for application developers.  

While layer one blockchains, Bitcoin, Solana and Ethereum, the first two in particular, have accrued tremendous value so far this cycle, we believe that the infrastructure will now allow for more adoption of the technology as it can be incorporated as more efficient infrastructure. Furthermore, innovations like account abstraction and intents will make interacting on blockchains less technical and “janky” and allow for end users to benefit from blockchains without knowing they are using them.   

As a result, we will see value migrate from underlying technology infrastructure plays, to protocols that own user relationships. Those protocols that own customer relationships will be able to use their standing to provide other services and to extract more fees and revenues from the rest of the stack.  

Golden Pear believes that 2024 will see growth across a large swath of digital assets. However, smart contract L1 blockchains may underperform key application verticals which show good product market fit. Although we believe that majors will still see positive appreciation as a result of increased volume on their chains, some applications will vastly outperform and create front page news and create at least two dozen unicorn blockchain applications.  

AI Agents X Digital Assets 

The most promising application layer segment is the crossover between AI Agents and digital assets. AI Agents are purpose built models that perceive their environment, and incorporate data, prompts and instructions that enable it to complete specific tasks. They can also learn and adapt. Adding the ability for these agents to use crypto gives them a native currency that they can use to transact, incent, coordinate and survive (generate attention and revenue to pay for compute). This combination is tremendously powerful, best summarized as follows: 

Blockchain technology is the monetization of code.  

Artificial Intelligence allows code to think, act and learn.  

The combination provides one of the most powerful technological and  

financial opportunities in a generation.  

In our November Newsletter we called out the opportunities produced by this powerful duo and broke down the way we categorize the opportunities across infrastructure, frameworks, platforms and agents. Since that time, not only have we seen significant appreciation, but the number of agents, their adoption, the size of the developer community, number of developer commits, the additional functionality, and the general progress in the space only adds to our conviction.  

We believe that AI Agents will be the primary application layer use of crypto in 2025. We think that the launch of new LLM models will create far more functional agents and that agent frameworks will grow massively in utility. As a result, AI Agents will move from a fringe tech idea to being used by hundreds of millions of people. 

We believe that Virtuals, Eliza (AI16Z), ARC and Zerebro will be some of the key frameworks that will lead the way and which, if their value accrual mechanisms are well executed on, will drive tremendous value. We also believe that the model of investing in AI Agents will look similar to other technology adoption curves, infrastructure first, then applications (sound familiar?). Golden Pear thinks we will see several amazing outcomes at the intersection of AI Agents and crypto as follows: 

• By the end of 2025, there will be dozens of millions of AI Agents empowered by crypto 

• Some functional agents will be used routinely by parts of the population (coding agents? booking agents?) 

• Agent autonomy, mostly from the use of TEEs (like Freysa) will be seen as interesting and as a baseline for many crypto builders in the space 

• Agent leaders will emerge, managing swarms of AI Agents 

• Agents will hire humans to work for them 

• Agent activity will make steps towards outpacing human activity on social media and blockchains 

• Crisis will begin to set in as it will be increasingly difficult to attribute activity to human vs. agent 

• There will be agent confrontations 

• Not all agents will be benevolent. Downright Evil agents will emerge, hacking, trolling, and much worse.  

  
  

Although some (most or all?) of these predictions are creepy, there is no way to stop what has begun and understanding what is coming is going to be tremendously important for positioning going forward.  

Stablecoin Proliferation 

Tether has sat at the core of digital asset stablecoins since its launch in 2014. Its billions of dollars of tokenized US Dollars makes it one of the most profitable organizations in the world. This caught the attention of many entrepreneurs and as stablecoins have been increasingly adopted in developing countries, stablecoin market cap now exceeds $200B. In the 30 days preceding the end of December 2024, stablecoins settled $3.9T (yes, trillion) across 534.6M transactions.  

New innovative protocols, nipping at Tether’s heels, are also growing rapidly. Usual protocol and Mountain, for instance, which provide yields generated to users, as well as structured product stablecoins like Ethena, are revolutionizing the idea that one can hold and spend an interest bearing dollar.  

Stablecoin legislation in the USA will likely be passed in late 2025, allowing for more innovation and clear rules in the space. Furthermore, much of the aforementioned institutional adoption will require stablecoins and assist in their growth.  

Golden Pear believes that total Stablecoin issuance will exceed $300B and that the growth of yield bearing stablecoins will drive some of this adoption. Transaction value and volume of transactions will increase by more than 50% as stablecoins are used increasingly for daily transactions and payments.  We think that a Circle IPO in the USA, potentially in Q1 or Q2 will draw attention to the space and make it look exceedingly attractive to outside investors and users.  

Capital Markets and Venture Capital Backlash 

Since the listing of Coinbase in April 2021, precious few crypto related companies have gone public. However, Circle, a stablecoin issuer, and Kraken, a centralized digital asset exchange, are looking primed to go public in 2025 as a more digital asset friendly administration takes power. This should open the flood gates and we are likely to see other blockchain related companies like Chainalysis and Fireblocks consider IPOs. The liquidity that could be liberated by the capital markets will likely flow back into crypto.  

However, we are also seeing that the market structure of digital asset investing is changing. 2024 witnessed a pervasive backlash by the developer and investor community against venture capital backed projects. Protocols like Eigen Layer and Starkware were highly anticipated but as soon as the tokens began trading, the price did nothing but decrease. The community attributed this to the fact that many Venture firms had positions in these anticipated protocols at far lower prices and ended up finding ways to deal in their tokens even if they were locked (perpetuals, OTC deals, etc.). The distaste for VCs getting preferential access to the best deals at very low prices turned individual investors against this structure. Even some VCs struggled as the price of some protocols ended up debuting near prices that were lower than their last rounds (Layerzero, for instance).  

On the other hand, part of the success of protocols like the memecoin launcher pump.fun, and the perpetual Dex, Hyperliquid, showed that tokens without any VC interests are of huge interest to investors and that they are more interested in projects that attempt to stay true to the grassroots values that crypto was built upon.  

We predict that, especially with less scrutiny from the US SEC, more projects will choose to raise much more modest sums to fund setup and instead utilize platforms like Echo, Fjord, Legion, and others to ICO (“Initial Coin Offering”). Many of the AI Agent platforms are also utilizing similar mechanics in order to provide more transparency regarding ownership and launch token mechanics. This will provide for some great opportunities for liquid funds and individual investors to participate on more equal terms.  

Review of 2024 Predictions 

Last year was the first year we made some predictions for the coming year. As you can see, they are mostly more “crypto native” and this year we have tried to broaden them to a more macro lens. As Warren Buffet said, “Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard.” 

• Bitcoin will enjoy a resurgence due to the imminent ETFs.  

  • This was a no brainer.  

• Eigen will be beloved. Then vilified a la lido. 

  • This one was remarkably correct! Eigen was the most promising crypto protocol to launch in 2024 and it was farmed like no other protocol. Its launch was arguably one of the weaker ones and their missteps made it vilified. However, the tech is strong so let’s see what happens! 

• Intents will start a takeover. Yield gen and arb will migrate to bots offchain thereby making parts of crypto less interesting to retail. 

  • One could argue that this has begun and we are starting to see green shoots. But let’s just call it a miss. It could still happen in 2025, however.  

• Social will fail again. 99% of social users couldn’t care less about who owns their data or monetization.   

  • Sadly, this was wrong, then very right. Friend.tech was close to being a great crypto/social app. But the team duffed it and it failed. Now, it may be even harder to accomplish.  

• Ethereum will be proven to be a more complex, less user friendly tech but it’s critical mass will solidify it as the premier smart contract blockchain for defi. 

  • Well, the first part was correct. The second part, not so much. Ethereum is still in its adolescence and is maturing. Could the AI Agent meta, playing out on Ethereum L2s, provide the kicker to push this forward? Perhaps in 2025.  

    
    

Conclusion 

We believe that 2025 will offer tremendous opportunity in the areas mentioned above. However, that is not to say that it will be easy nor will it proceed in a straight line. Although our price targets are generous, we also think there are significant downside risks. As macro forces are far from certain, look no further than the 10Y treasury yield and dollar strength which imply that volatile times are ahead. Although we have high conviction in the technological innovation and adoption noted above, macro forces will make for a potentially very bumpy ride.  

Crucially, when investing in digital assets, one must stay on top of market forces, development of the technology, and construct a strategy and tactics that allow for handling of the short-term volatility. Without that portfolio construction, risks abound.  

However, we are convicted that the monetization of code that blockchain technology creates will eventually be one of the underpinnings of our technological society. Remaining focused on the long term while understanding the ways in which we achieve the potential of the technology sits at the core of success. We hope you have enjoyed reading about our thoughts on what the exciting year ahead will bring for this promising asset class! 

Allan Matheson is the founder of Golden Pear Capital, a crypto asset-focused investment management company.

Disclaimer:

This article is for general informational purposes only. Any commentary and information contained in this article should not be considered as financial or investment advice, and is not intended to provide legal, accounting, or tax advice. This article may contain the opinions, views or recommendations of individuals or organizations. These opinions and views are provided for your general interest only and are not endorsed by Golden Pear Capital Ltd., Golden Pear Digital (BVI) Ltd. or affiliates, from hereon, referred to as "Golden Pear".  Every effort has been made to ensure that the material contained in this article is accurate at the time of publication. However, Golden Pear cannot guarantee its accuracy or completeness and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein. Facts and data provided by Golden Pear and other sources are believed to be reliable when posted. Golden Pear cannot guarantee that they are accurate or complete or that they will be current at all times. Any information, including performance data available through any third party provider is not guaranteed to be current, accurate or complete and is subject to change without notice. Performance data represents past performance and is not indicative of future performance. There may be inherent conflicts of interest included in the article as a result of the Golden Pear involvement in the digital asset industry.