Major cryptocurrencies staged an impressive rally in 2024, with bitcoin repeatedly refreshing its all time-high. For the bull run to continue, crypto enthusiasts hope for a more friendly regulatory environment under the second Donald Trump administration and a favorable macroeconomic setup to support gains for risk assets. 

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Bitcoin went up 119.6% in 2024, and was up 464.2% over the past two years, logging its best performance over two calendar years since the two years ending 2021, when it rose 542%, according to Dow Jones Market Data. 

The largest cryptocurrency by market capitalization rose above the $100,000 milestone for the first time in history in early December, 2024. It traded at $93,413.90 to round of the year, right as the stock market booked its best two-year gain since the late 1990s.

Ether, on the other hand, has underperformed bitcoin, but it still went up 46.5% in 2024 to end the year at around $3,344.72.

XRP, the fourth-largest cryptocurrency by market cap following stablecoin Tether, rallied 238.4% in 2024 to end the year at $2.09, logging its best yearly performance since 2021, when it rose 268.2%.

Solana, which is often seen as a competitor to Ethereum, rose 85.5% to $192.65 to end 2024. 

Crypto-related stocks also rose significantly, with some outperforming bitcoin. MicroStrategy, which holds 446,400 bitcoins, or roughly 2% of the crypto’s total supply on its balance sheet,saw its sharesup over 358.5% in 2024, its best year since 1999, when it rose 566.7%. Crypto exchange Coinbase’s shares rose 42.8% in 2024. 

For crypto’s bull run to continue, investors will be closely watching for any regulatory changes in 2025 and whether Donald Trump’s promises to the crypto industry will materialize, as he repeatedly vowed support for the industry during his campaign and received endorsements from several key figures in the industry. 

​​“The first 100 days in Trump’s term will be very, very important,” Sean Farrell, head of digital assets at Fundstrat, said in a phone interview. Politicians and analysts often use the “first hundred days” as a yardstick to measure the likely effectiveness and impact of incoming U.S. presidents. 

Notably, investors will watch if Trump would deliver his promise to build a strategic bitcoin reserve in the U.S., though the incoming president has not detailed any specific plans.

Crypto industry participants will also be looking for any clear guidelines on which crypto should be classified as securities, according to Alex Thorn, head of firmwide research at crypto asset manager Galaxy Digital. 

The current Securities and Exchange Commission under Gary Gensler’s leadership has brought enforcement actions against several crypto companies, such as Coinbase and Consensys Software Inc., for failing to register as a broker-dealer, clearing agency, or national securities exchange. Crypto industry participants have long complained that the agency approached digital asset regulation through enforcement, instead of clear guidance.

Investors will also be watching for any changes in the current accounting guidance, known as SAB 121, which has asked public companies including banks to recognize the crypto they custody as liabilities on their balance sheets.

Under such guidance, banks have to set aside assets that are worth a similar amount to protect against losses to comply with their capital requirements. It has created difficulties for banks to custody crypto, said Thorn in a phone interview. 

Meanwhile, investors will be closely watching to see if the Federal Reserve will cut its key policy rate in 2025 by very much, after the central bank’s officials on Dec. 18 signaled that they may deliver fewer rate cuts next year than previously expected. The Fed’s interest rate decisions and its impact on the economy could be drivers for all risk assets.

Fed-funds futures traders have been pricing in a 14% likelihood that the Fed will keep its key interest rate unchanged in 2025 at its current range of 4.25% to 4.5%, according to the CME FedWatch Tool. They have been pricing in a 33.2% chance of the central bank cutting its policy rate by 25 basis points in 2025, and another 31.5% chance that the central bank will deliver two quarter-percentage-point rate cuts next year.