Coinbase analysts are optimistic about the cryptocurrency market as we approach the end of 2024, citing positive economic and political changes.
Key factors include the recent US election results and the impact of increased memecoin activity on the Solana blockchain.
“Overall, we expect a supportive macro environment for crypto performance over the next 1-2 quarters, driven by accommodative US monetary policy and stronger US economic conditions,” said David Duong, Head of Institutional Research and Analyst David Han at Coinbase.
A major factor contributing to this outlook is the election of Donald Trump as the next US president. The Trump administration, which will take office on January 20, 2025, is expected to prioritize policies that can encourage economic expansion and risk-taking, potentially benefiting the crypto market. According to Coinbase analysts, increased deficit spending and greater money supply could lead to increased demand for digital assets as investors seek returns in riskier markets.
Crypto-friendly candidates have made gains across the political spectrum, with the US House winning 263 pro-crypto candidates compared to 118 anti-crypto candidates, and the Senate winning 18 pro-crypto members to 12. This shift has raised expectations for a more favorable regulatory environment for cryptocurrencies in the US next year.
In addition to political developments, analysts have also noted Solana’s growing role as a “memecoin hub.” Over the past year, Solana has seen significant growth in memecoin trading, making on-chain trading protocols the third-most profitable crypto sector after stablecoins and layer-1 networks. The success of pump.fun, a leading memecoin launch platform on Solana, has driven activity on the network, with more than three million memecoins launched on the site to date.
“Memecoins have been the best-performing crypto sector by total market cap growth this year,” Coinbase analysts wrote, noting that much of this growth has occurred at Solana. Network fees from memecoin transactions currently account for more than 82% of Solana’s non-voting transaction fees.
Coinbase analysts expect a strong start for crypto markets in 2025 due to these factors, as favorable policies, economic conditions, and network growth on blockchains like Solana contribute to a promising environment for digital assets.
*This is not investment advice.
