What will Bitcoin look like in 2025 from Galaxy Research's perspective?

Galaxy Research has published a detailed analysis, predicting major changes to take place in the Bitcoin and crypto markets in 2025.

The report notes that 2024 was a milestone, with Bitcoin and digital assets seeing a dramatic shift. Prominent factors include record capital inflows, an increase in institutional acceptance and landmark policies that have shaped the market.

The two main events highlighted by Galaxy Research are the launch of spot Bitcoin ETPs in the US and the re-election of Donald Trump as President. Alternating between the above two events, the market experienced 237 trading days in a volatile sideways state.

The report also highlights that, although these factors have provided impetus in 2024, 2025 promises to see even more robust expansion of industry trends and stories.

Galaxy Research predicts Bitcoin will continue to reach impressive milestones in 2025. With support from organizations, businesses, and countries,Bitcoin price is expected to exceed the $150,000 mark in the first half of the year and reach or exceed $185,000 in the fourth quarter.

The report highlights that Bitcoin has long been the fastest growing asset, outperforming all S&P 500 Indexand gold, and this trend will continue next year. Bitcoin, in particular, will reach 20% of the capitalization of the gold market, marking a new step in the comparison between the two assets.

In the financial sector, spot Bitcoin ETPs in the US saw impressive growth with total assets under management (AUM) expected to exceed $250 billion. 2024 recorded more than $36 billion in net capital, making Bitcoin ETPs the most successful launch in history.

In terms of performance, Bitcoin continues to assert its position as one of the best risk-adjusted performance assets globally. Bitcoin's Sharpe* ratio is higher than many other assets, and remarkably, MicroStrategy — which claims to be the “treasury of Bitcoin” — now has the best Sharpe ratio in the portfolio of major tech companies.

*Sharpe Ratio measures investment performance by comparing superior returns to safe interest rates and accepted levels of risk. A high rate (Sharpe > 1) indicates an effective investment, while a low ratio (< 1) means that the return is not worth the risk.

The report also predicts thatat least one leading asset management platform will publish Bitcoin allocation recommendations at 2% or higher, marks a new step in bringing Bitcoin into the official portfolio. This will add a big boost to the flow of capital into Bitcoin ETPs.

In addition, 5 companies in the Nasdaq 100 and 5 countries will announce the addition of Bitcoin to the balance sheet or national wealth fund. Drives from portfolio diversification strategies and competition among countries — especially those not affiliated with or opposed to the United States — are expected to drive this trend.

In terms of technology, Bitcoin Developers Expected to Achieve agreement on the next protocol upgrade. Opcodes such as OP_CTV, OP_CSFS, and OP_CAT will be added to the new soft fork, although this upgrade will not be activated until 2025.

In the mining sector, more than half of the 20 largest Bitcoin miners will partner with AI and high-performance computing infrastructure (HPC) companies. Demand for computing from AI will drive mining companies to upgrade and expand infrastructure, helping to maintain hashrate growth at 1.1 zetahash by the end of 2025.

Finally, the market Bitcoin DeFi is predicted to almost doubled, from the current $15.4 billion to about $30 billion TVL.

This growth will be driven by an increase in CBBTC and WBTC supply, as well as the expansion of DeFi protocols on Ethereum and Bitcoin's L2. Staking platforms like Babylon will also play a big role as it is expected to reach $8 billion TVL by the end of 2025.

Bitcoin in 2025 promises to be not only an investment asset but also the center of many major technological and financial changes, ushering in a new era for the crypto market.