Well, as hard to believe as it may be, we are now into Q2 of 2025, and to say the markets have been unsteady would be understatement of the year. The markets have been on quite the rollercoaster since many of the world’s major indexes peaked in February.
With the markets very up and down at the start of 2025, investors are naturally wondering what the rest of the year may hold, and how the markets may behave. While the stock markets in general have been bumpy, that’s nothing compared with what we’ve seen in the cryptocurrency space.
2024 saw record highs for the crypto markets, with the current market cap coming in at $2.89 trillion as of this writing. With trade tariffs and concerns about an all out trade war at the end of Q1 however, we saw a major decline in all major cryptocurrencies, driven of course, by a plunging Bitcoin.
Crypto in its nature is very volatile, and while the crypto markets have regained much of their losses, the outlook for the remainder of the year is anything but steady.
Here’s a look at 4 cryptocurrency trends we could see in 2025.
A Surge in AI Tokens
AI is very much the buzzword of the day, and despite AI-heavy tech stocks falling in recent months, not to mention the concern that AI stocks may be overvalued, there is still plenty of scope for growth.
In recent months, we’ve seen the rise in what are known as AI tokens. These are essentially forms of crypto that are directly linked to AI business projects.
AI tokens are basically the latest form of crypto, and could find themselves involved directly in a number of Blockchain protocols. With AI tokens, users can pay for goods and services and access data across a wide range of platforms.
As of this writing, there are currently more than 90 types of AI tokens in circulation at the moment, though that number is expected to grow exponentially. Just to give an idea of the type of growth we could expect, in 2023 the total AI market value stood at around $2.7 billion. Less than two years later, that number is more than $20 billion, having recently peaked at close to $30 billion.
Bull Runs for Crypto
For any investors holding crypto wallets or portfolios containing crypto, 2025 could be a year that sees crypto embarking on a pretty impressive bull run.
In late 2024, following the approval of crypto ETFs, the Bitcoin price surged by more than 150%, reaching highs of $77,000. Experts however, believe that’s only the beginning, and predict that Bitcoin could reach highs of $123,000 before the end of 2025. Incidentally, we keep mentioning Bitcoin because the crypto markets tend to track Bitcoin, almost to a Tee.
At the start of 2025 however, Bitcoin plummeted thanks to the trade tariffs implemented by Donald Trump, and retaliatory measures taken by countries such as China. Despite this, crypto markets have quickly recovered much of their losses and could very well stabilize before H2.
Talk of a Bitcoin halving event should also drive up the value of Bitcoin and crypto. With the Bitcoin halving event, rewards for mining Bitcoin are halved, slowing the rate in which Bitcoin is mined. This in turn results in fewer Bitcoins in circulation, which should drive up demand.
In the past, halving events have been followed by Bitcoin peaking at all-time highs. A dip in price is expected, but a crypto bull run could shortly follow.
More Regulation
Now, this next potential trend could be viewed as a positive or a negative, depending upon how you look at things.
Following the collapse of FTX, and increasing volatility in the crypto markets, there have been calls for more regulation when it comes to crypto investing. The SEC in particular, have voiced their concerns about crypto and have openly discussed the need for more regulation.
As more regulation looks set to be implemented, this could turn investors away from crypto, which in turn could result in sharp selloffs, and perhaps even a correction. As regulatory measures look set to be tightened, we could see many crypto companies and brokerages explore their options overseas, where regs are perhaps a little more relaxed.
Climate Activision Could Hinder Market Performance
As a greater emphasis is placed upon tackling climate change, the crypto markets are coming under increasing pressure from climate activists and organizations because of the energy usage required for mining crypto.
Crypto mining requires an astonishing amount of water and energy, and as demand for crypto grows, energy consumption only looks set to increase. Just to give an idea of how much energy crypto requires, one single Bitcoin transaction utilizes the same amount of energy as the average US household over the course of 26 days.
Furthermore, as much as 67% of energy consumption used in crypto mining comes from fossil fuels, meaning that carbon emissions as a result of crypto mining could be dangerously high. This has resulted in an increasing amount of pressure from climate activists and government organizations around the world, who are calling for change.
In a bid to mitigate these issues, Ethereum, another hugely popular crypto, launched a software upgrade which reduced mining energy use by a staggering 99%. The main issue is that Bitcoin is unlikely to follow suit.
If things don’t change, the crypto markets may find themselves overwhelmed, which again could result in sharp falls in prices.
*Disclaimer* This is not financial advice. We are not financial advisors. The content of the article below is intended for educational and entertainment purposes only.