Crypto markets have had a transformative year in 2024, marking a new era of growth and mainstream acceptance. In March, Bitcoin reached an all-time high of more than $73,700, coinciding with the launch of new spot Bitcoin ETFs in the United States. But not everything is rosy: Regulations continue to cloud the industry’s outlook.
So, where is the market headed in 2025? We’ll look at the recently released Gemini 2024 Global State of Crypto report for some clues. The landmark survey encompasses opinions from 6,000 adults across five countries to gain insight into crypto adoption, investor attitudes, and emerging trends, offering potential insights into what’s next.
Let’s dive in.
HODLers Stay Strong
The crypto market has seen its fair share of ups and downs, but one of the most striking revelations from the Gemini report is the steadfast nature of crypto investors. Despite the market downturn in 2022—often referred to as the “crypto winter”—ownership rates remained remarkably steady across several key markets.
Crypto ownership remained remarkably steady between 2022 and 2024 despite the “crypto winter” sending prices lower. Source: Gemini 2024 Global State of Crypto Report
The report cited a few key reasons investors held steady:
- Long-term perspective. Nearly two-thirds of crypto owners across geographies reported buying and holding cryptocurrencies for their long-term investment potential. These individuals see crypto assets as a long-term growth opportunity, much like holding internet stocks through the boom and busts of the 2000s.
- Hedging against inflation. About two in five crypto owners view their cryptocurrency holdings as a hedge against inflation. With the global rise in inflation following COVID-19, these characteristics have become increasingly important since 2020, particularly in countries with higher-than-average inflation.
- Core portfolio allocation. Over half of crypto owners were comfortable making crypto a core part of their investment asset allocation. These trends suggest that crypto assets could become a permanent fixture in investment portfolios rather than a speculative asset—or more like Microsoft stock than a penny stock.
Notably, the number of past owners rose slightly in each geography, suggesting some investors exited during the market downturn. However, the report found that more than 70% of these past owners are considering a return to the market, further underscoring the resilience and long-term optimism in the crypto community.
ETFs Offer a Gateway
The introduction of spot Bitcoin ETFs in the U.S. in January 2024 was a watershed moment for the crypto market. According to the Gemini report, two in five crypto owners report holding some crypto via an ETF, while more than one in ten own crypto exclusively through an ETF. These figures suggest that ETFs are attracting new investors.
These ETFs offer several advantages over conventional cryptocurrencies:
- Simplified access. ETFs enable investors to gain exposure to Bitcoin’s price movements without the cost and complexities of directly purchasing and storing cryptocurrencies. This simplification removes a significant barrier to entry for many traditional investors that may not be tech-savvy.
- Portfolio integration. Bitcoin ETFs can be easily incorporated into traditional investment portfolios, allowing for seamless diversification and potentially reducing overall portfolio risks. Investors can keep their entire financial life within the same brokerage account rather than maintaining separate accounts.
- Regulatory oversight. ETFs are subject to stricter regulatory scrutiny than direct cryptocurrency investments, which may provide more comfort for risk-averse investors. Many investors may be willing to trust a company like iShares that issues ETFs they may already own in other parts of their portfolio.
- Institutional adoption. The availability of Bitcoin ETFs paves the way for increased institutional involvement, potentially bringing greater price stability and deeper liquidity to the crypto market. Unlike futures-based ETFs, spot ETFs require issuers to purchase physical Bitcoins to back their funds.
That said, ETFs aren’t for everyone. These funds may involve added fees in the form of an expense ratio, making them more expensive than purchasing Bitcoin in a wallet. Many crypto enthusiasts also strive to keep their crypto assets outside mainstream financial institutions for reasons dating back to Bitcoin’s founding principles.
The Regulatory Rollercoaster
The regulatory landscape for crypto remains complex and often confusing, acting as a significant barrier to entry for many potential investors. According to the Gemini report, over one-third of U.S. investors cited regulatory concerns, including concerns with the IRS and SEC, as barriers to crypto investing.
For example, the IRS treats crypto as property, meaning investors must calculate their cost basis and pay taxes on any capital gains. While that’s a straightforward process for stocks (and ETFs), those owning crypto assets outright must aggregate transactions across exchanges and deal with thorny questions about what constitutes a “sale.”
ZenLedger simplifies the crypto tax reporting process by connecting with your wallets and exchanges, aggregating transactions, and computing your capital gain or loss. Source: ZenLEdger
In addition to the IRS causing a headache for individual investors, the SEC insists that every cryptocurrency apart from Bitcoin and perhaps Ethereum falls under the definition of a “security.” Therefore, they’ve been aggressively pursuing regulation through enforcement, using a broad range of crypto projects and exchanges for unregistered securities offerings.
While the crypto community largely opposes regulation, 47% of crypto owners and 34% of past owners agreed that more government oversight would be positive because it would protect consumers from bad actors. But, of course, many believe there should be a balance between protecting consumers and stifling innovation.
Finally, in the U.S., the regulatory stance on crypto has become a significant political issue. Nearly three-quarters of crypto owners plan to consider a candidate’s policies toward digital assets when voting for the next president, highlighting the growing importance of crypto regulation in the political landscape.
What’s Next?
Using cryptocurrency for everyday purchases has been a long-standing goal in the crypto community. And according to the Gemini report, this dream may be inching closer to reality. Over 60% of U.S. crypto owners believe companies will start accepting crypto payment methods within the next decade.
More than half of crypto owners also see cryptocurrencies as integral parts of investment portfolios. Most are ready to allocate at least five percent of their assets to cryptocurrencies. This shift in perception from a fringe speculative asset to a core portfolio component signals a rapidly maturing market.
But, as we’ve seen earlier, the future of crypto will likely hinge on regulatory developments. While unclear rules keep many potential investors on the sidelines, there’s a growing consensus among crypto owners that some form of regulation could benefit the industry’s long-term health and growth.
The Bottom Line
The Gemini 2024 Global State of Crypto report paints a picture of a market poised for growth and broader adoption. Despite past volatility, crypto investors have shown remarkable resilience, with many viewing digital assets as a long-term investment. And the introduction of spot ETFs has only accelerated these trends.
If you trade crypto assets, ZenLedger can help you stay organized for tax season. Our platform connects with your wallets and exchanges to aggregate transactions and compute your capital gain or loss. Then, you can generate the forms you need to complete your taxes and maintain a complete audit trail in case the IRS asks any questions.
This material has been prepared for informational purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation.
