Cryptocurrencies Entering a Full-Scale Bubble: Which Tokens to Watch in 2025?

The position of crypto assets in asset management

In recent years, crypto assets have begun to attract attention among investors. Currently, crypto assets are positioned as "alternative assets" in asset management.

Alternative assets refer to a group of assets that are riskier but have greater potential for return than traditional assets such as stocks and bonds. Crypto assets are subject to rapid price fluctuations, so it is necessary to understand the risks of investing the entire amount.

Even when looking at the portfolio posted on the website of BlackRock, the world's largest asset management company, whose total managed assets are said to have reached $11.5 trillion (approximately 1,720 trillion yen) as of October 2024, "diversifiers," which serve to diversify the risk of the investment portfolio, account for 7% of the total.

The Bitcoin spot ETF, which will be described later, is an investment trust that is different from stocks, but is often recognized as an "investment product similar to stocks" considering the trading method and liquidity in the stock market.

BlackRock's Bitcoin spot ETF "IBIT (iShares Bitcoin Trust)," which is said to have a total managed asset value of over 4.4 trillion yen, does not specify which category of the portfolio in the diagram on the right it is included in. However, it is generally considered that "physical" Bitcoin is an asset included in the "Diversifier," which accounts for 7% of the total.

Here, we will consider incorporating crypto assets into part of a portfolio, taking into account the perspective of risk management in asset management.

The emergence of a Bitcoin spot ETF and its significance

As the investment environment for crypto assets is improving, the Bitcoin spot ETF, which was approved in the United States in January of this year, is attracting attention.

It is a product backed by physical Bitcoin and traded through traditional securities markets, so it is safer and more transparent for investors in terms of reducing the risk of losing private keys and hacking.

In the domestic crypto asset market, investors have long had two issues: the tax rate for spot transactions of crypto assets and whether they should be subject to separate reporting taxation.

In response to this, on October 25, crypto asset exchanges, securities companies, law firms, and other companies jointly compiled a proposal and began to lobby the Japanese government in earnest, with the aim of getting crypto asset ETFs approved in Japan.

With crypto asset spot ETFs being approved one after another in the United States, it is significant for the crypto asset industry that efforts to approve crypto asset spot ETFs in Japan have begun in earnest.

The proposal submitted has three main points. The first is to narrow the target stocks for ETFs to Bitcoin and Ethereum, which have high liquidity and name recognition. The second is to amend the Investment Trust Act to allow the provision of cryptocurrency ETFs. The third is to raise the tax rate on spot transactions of crypto assets to 20%, in line with ETFs, and make them subject to separate reporting taxation.

As there are some domestic investors who purchase shares in domestic listed companies that actively invest in crypto assets, in order to make up for the current tax disadvantages of investing in crypto assets, if a Bitcoin spot ETF is approved in Japan, it will increase the investment options, including crypto assets, and support the creation of a more diverse portfolio.

Comparison of spreads at cryptocurrency exchanges in Japan

After understanding the position of cryptocurrency as an investment target mentioned above, choosing an exchange is an important point when purchasing cryptocurrency in Japan. This may be preaching to readers of this magazine, but there is a price difference between buying and selling at each domestic cryptocurrency exchange, called a "spread," and the size of this spread greatly affects trading costs.

Needless to say, the smaller the spread, the lower the cost of the exchange, which is more advantageous for investors. Furthermore, there are mainly two services that allow you to obtain cryptocurrency provided by domestic cryptocurrency exchanges: "exchanges" and "sales offices." When comparing the fees for these two, it is clear that there is almost no benefit to using a "sales office."

If I had to say, I would say that you should use a "sales office" when purchasing cryptocurrency that is handled at a sales office but not at an exchange, or accept this spread when investing in IEO stocks.

Additionally, when using a domestic exchange, you will want to compare and consider factors such as the exchange's spread, fees at the time of withdrawal, and the number of days between issuing a withdrawal instruction and the funds being deposited.

How to buy crypto assets not listed in Japan and points to note

Some crypto assets are not handled by exchanges in Japan, so there are still options to use DEXs (decentralized exchanges) or overseas exchanges. Using overseas crypto asset exchanges is not illegal under current law, but these methods also involve risks.

When FTX, the second largest crypto asset exchange in the world, went bankrupt, some Japanese residents who did not have an account with FTX Japan and used the overseas FTX.com account were reported to have been excluded from asset return, so in the event of a problem, there is no sufficient support, and it is said to be very difficult to take legal action against overseas exchanges in Japan.

Although DEX allows you to trade without going through a third party, you need to be careful about the risk of storing funds and fees. Even when using overseas exchanges, you need to be aware that the protection of your assets may be limited because they are not regulated in Japan. It is important to fully understand the risks and trade at your own risk.

Of course, profits earned on overseas exchanges are also subject to taxation under Japanese tax law, and failure to declare them may result in penalties such as late payment penalties and non-filing penalties, so caution is required.

The next page introduces eight brands carefully selected by the Iolite editorial team as one indicator for investing in individual crypto assets. We hope you will use this as an indicator to organize your many crypto assets.

Source: Coincheck (November 29, 2024)

Coincheck is Japan's No. 1 exchange in terms of download numbers. Its smartphone app is simple and easy to use, making it beginner-friendly. Additionally, the platform offers 29 different cryptocurrencies, providing users with a wide range of options for trading.

Coincheck also offers services like "Coincheck Electricity" and "Coincheck Gas," which allow users to pay utility bills using Bitcoin (BTC) or earn Bitcoin as rewards. These services seamlessly integrate investments into daily life, encouraging consistent investment practices—a significant advantage for users.

Click here to open a Coincheck account

Further advances with the emergence of a killer app with popularity and influence in infrastructure for meme coin issuance

Price: $238
As of November 29, 2024 (CoinMarketCap "Solana (SOL) Price, Chart, Market Cap")

Meme coins have a precarious presence among cryptocurrencies. These cryptocurrencies were born against the backdrop of internet culture and humor, and sometimes become the center of attention due to sudden price fluctuations and community enthusiasm.

In 2023, the sudden rise of "PEPE" and "BONK" attracted attention, and the meme coin fever continues into this year. Meme coins have a high frequency of short-term transactions, and fees and processing speed seem to be major factors in selecting an issuance platform. For these reasons, Solana is increasingly being used.

Validators selected in PoS create blocks based on the chronological order of transactions recorded in PoH. In PoH, the generated hash serves as a timestamp of when it was created.

This allows the order of transactions to be recorded in a time-proven form, making it possible to generate blocks very efficiently and quickly. In addition, a Solana spot ETF is currently being applied for in the United States, and depending on the progress of this, it may have a significant impact on the price of SOL.

Current situation

The hybrid of PoS and PoH, efficient and fast block generation, makes it a popular platform for issuing meme coins.

Points

- Possibility of approval of Solana spot ETF
- Good compatibility with apps that perform large volumes of transactions

Will Memecoin X, which cannot be discussed without Elon Musk, be selected as a settlement currency?

Price: $0.4053
As of November 29, 2024 (CoinMarketCap "Dogecoin (DOGE) Price, Chart, Market Cap")

The market capitalization of Dogecoin, which can be said to be one of the original meme coins, exceeded 24 billion dollars (about 3.6 trillion yen) as of November. This is proof that Dogecoin is particularly popular among meme coins.

The presence of Elon Musk is inseparable from this meme coin. In addition, after winning the presidential election, Trump asked Musk to lead the "Government Efficiency Commission," which he proposed to establish if he was elected.

When Musk responded to the request, he posted an image of "D.O.G.E" generated by AI on the official X with the message "Department of Government Efficiency," which caused DOGE holders to go wild. As a result of this series of events, Musk's influence on DOGE is remarkable, with the price of Dogecoin rising 25% in about a week.

Current situation

Elon Musk's influence is not only affecting the price of DOGE, but is also raising expectations for its future potential, such as the expansion of further usage scenarios.

Points

・Will Dogecoin be able to be exchanged within X (formerly Twitter)?
・Expectations will increase even more if a collaboration with Elon Musk's business is announced.

A project co-founded by OpenAI's Sam Altman whose goal is to achieve economic freedom through digital ID

Price: $2.90
As of November 29, 2024 (CoinMarketCap "Worldcoin (WLD) Price, Chart, Market Cap")

World Coin was launched with the grand vision of realizing what is called universal basic income, "providing crypto assets to everyone and bringing economic freedom and inclusion to everyone around the world." At the heart of this is the vision of making it easy for everyone to obtain a unique digital ID.

Sam Altman, co-founder of World Network (formerly World Coin), is also known as the CEO of OpenAI and has a great influence in the technology industry.

Aiming to standardize global digital IDs, the development team began designing and manufacturing a biometric authentication device called "Orb." Orb is a device that scans the user's iris to identify individuals, and is the core technology of World Network's unique digital ID system.

It is said that there are more than 2 billion people in the world who do not have a bank account due to reasons such as the lack of a way to prove their identity. It is socially significant that this problem can be solved by a standardized digital ID, and if adopted by governments and international organizations, it could become explosively popular.

Current situation

More than 2 million people have acquired World Network digital IDs.

Points

- The catchy and clear vision of universal basic income has already attracted prominent investors such as Andreessen Horowitz (a16z) and Coinbase Ventures.
- If global digital ID standardization is realized, it could bring about a disruptive revolution in the existing financial infrastructure.

Familiarity with Telegram, user-friendly interface, and possibility of expanding usage by becoming a super app

Price: $6.37
As of November 29, 2024 (CoinMarketCap "TON coin (TON) Price, Chart, Market Cap")

TON Coin was developed under the name "Telegram Open Network". Development was started in 2018 by the Durov brothers, founders of the messenger app Telegram, but in March 2020, the project was discontinued due to regulations by the SEC (US Securities and Exchange Commission).

It has now been renamed "The Open Network" and is being developed and operated by a non-profit organization called the TON Foundation. As originally led by the CEO of Telegram, the project provides various value experiences such as wallets, dApps, and DEXs through Telegram.

The user-friendly interface, which allows you to send and receive TON Coin directly within Telegram and manage your TON wallet through Telegram, is also one of the reasons for its popularity.

Current situation

TON interactions and wallet management completed within Telegram are becoming accepted by Telegram users.

Points

- Will Telegram aim to become a super app?
- If Telegram can partner with major payment companies and e-commerce platforms to make instant payments using TON available worldwide through Telegram, the future outlook will be even brighter.

L1 project created by former Meta engineers, selling high processing power and strong security

Price: $12.80
As of November 29, 2024 (CoinMarketCap "Aptos(APT) Price, Chart, Market Cap")

Aptos is a layer 1 blockchain created in 2022 by former Meta engineers Mo Shaikh and Avery Ching. APT is a native token issued on the Aptos blockchain.

One of the features of Aptos is that it uses the proprietary programming language "Move" that was being developed by Meta. Move is attracting attention as a technology that can solve scalability and security issues in blockchain.

In fact, Aptos has strengths in accelerating and streamlining transaction processing while maintaining high security. According to the official announcement, it can process up to 160,000 transactions per second. This is a performance that exceeds that of Solana, which is said to be able to process approximately 65,000 transactions per second.

Aptos is currently showing signs of focusing on the Japanese market, and is one of the projects that may attract more attention in the future.

Current situation

They are strengthening their focus on Asian markets, including the Japanese market.

Points

- Possibility of accelerating entry into Japan through partnerships with companies
- Expanding use cases to become a major Web 3.0 project

A long-established cryptocurrency with a history second only to Bitcoin. With the application for a Litecoin spot ETF in the United States, attention is focused on future trends.

Price: $95.76
As of November 29, 2024 (CoinMarketCap "Litecoin(LTC) Price, Chart, Market Cap")

Litecoin is a cryptocurrency developed based on Bitcoin and was born in 2011. It is one of the oldest projects after Bitcoin, but it has been traded to this day and is known to many users as a representative cryptocurrency, ranking 20th in market capitalization (as of November 2024).

However, with the emergence of new stocks, its market capitalization ranking has been declining year by year, and the level of attention is calming down due to the emergence of new projects in terms of technology. However, Litecoin is attracting attention again after Australian cryptocurrency investment company Canary Capital submitted an application for a Litecoin spot ETF to the US SEC in October 2024.

At this point, the possibility of approval is unclear, and given the examples of Bitcoin spot ETF and Ethereum spot ETF, it is not difficult to imagine that it will take some time for a decision to be made. However, given that it has similar properties to Bitcoin and has been traded in the cryptocurrency industry for many years, it is possible that it may be approved.

Current situation

The popularity and market capitalization rankings are declining due to the emergence of new projects.

Point

- The price may change significantly depending on the trends surrounding the approval of a spot ETF
- As with Bitcoin, the halving occurs once every four years, so the price tends to rise based on the supply and demand balance

Increased adoption of Ethereum's L2OP stack, which has a grand "super chain" concept, is the key to the future

Price: $2.33
As of November 29, 2024 (CoinMarketCap "Optimism(OP) Price, Chart, Market Cap")

OP is known as Ethereum's layer 2 blockchain and has been attracting attention in recent years. It uses a technology called Optimistic Rollup to speed up transactions.

Optimistic Rollup combines multiple transactions into one without fraud, and only verifies them later if there is a problem.

OP is characterized by its "super chain" concept, which develops layer 2 blockchains through a development platform called OP Stack and connects them to build a large network. World Network, which announced its rebranding in October, is also known as a project that adopted the OP stack.

OP employs a governance system called Optimism Collective, and has established a mechanism for making decisions through the governance token OP. If demand for OP continues to increase, the value of OP is expected to increase.

Current situation

With the expansion of the "Super Chain" concept, it has become a Layer 2 project that is attracting attention.

Points

- The increased use of OPism may affect the price of OP
- As part of the security improvement, the implementation of "Fault Proof" that will notify fraudulent transactions is awaited.

Price growth rate in 2024 exceeds 6,000% Attention is increasing as interest in tokenization of RWA grows

Price: $3.51
As of November 29, 2024 (CoinMarketCap "Mantra(OM) Price, Chart, Market Cap")

Mantra is a layer 1 blockchain project that promotes the tokenization of RWA (real assets) including real estate. It provides the "Mantra DEX" that supports multi-chains, and OM is issued as a governance token.

In October 2024, the mainnet "Mantra Chain" was released. OM was issued in ERC20 in 2020, but was migrated to Mantra Chain with the release of the mainnet. In addition, the price has risen sharply since the beginning of 2024, with the rate of increase exceeding 6,000%.

This shows the growing expectations for the project and is also evidence of the growing interest in tokenization of RWA.

In addition, Mantra announced a partnership with Google Cloud in October. The tokenization of RWA is expected to continue at an accelerated pace, and depending on the trend, it is expected to have a significant impact on the progress of the Mantra project and the price of OM.

Current situation

The much-anticipated mainnet, Mantra Chain, will be released in October 2024.

Points

- Announcement of partnership with Google Cloud
- Increased name recognition and an increase in the number of exchanges handling the token are key

Related articles

List of Cryptocurrency Types! Recommended Tokens Available in Japan and Their Future Potential