What does 2025 hold for digital and crypto assets?

2024 marked a major turning point for the cryptocurrency industry. bitcoin (btc) exchange-traded funds took center stage earlier in the year, underscoring bitcoin's resilience and solidifying its position as a permanent fixture on the global financial landscape.

After an initial post-ETF surge, the market saw a sideways move as the industry faced challenges, including what many have described as “debanking” by certain US regulators. These obstacles highlighted the growing pains of a nascent sector still struggling to achieve widespread acceptance and integration.

The US presidential election dominated the second half of the year and cryptocurrencies played a pivotal role in political discourse. As Donald Trump prepares to take office in January, his administration is prepared to take a markedly different stance on digital assets. Widely regarded as the “crypto President,” Trump’s pro-blockchain outlook signals a sea change from the Biden Administration.

The appointment of Paul Atkins as head of the SEC is a testament to this shift, and paves the way for a regulatory environment more in line with the transformative potential of blockchain technology. In this context, bitcoin has reached a historic milestone, surpassing the price threshold of $100,000, a powerful symbol of the growing maturity and global importance of the sector.

Cryptocurrency adoption: a steepening curve

Over the past 15 years since bitcoin's creation in 2009, an undeniable truth has emerged: blockchain technology has revolutionized and continues to reshape business models across a variety of industries. From finance and gaming to supply chain and social media, blockchain's ability to deliver faster, more cost-effective and secure processes is driving transformative change. While blockchain technology predates bitcoin, its widespread adoption has accelerated with the rise of cryptocurrencies.

Will there be more cryptocurrency users in 2025? All indicators suggest the answer is a resounding yes. Measured by active crypto wallets, the adoption curve is rising sharply, outpacing even the rapid growth of internet users in the early 2000s. The parallels are striking, as the challenges of the dotcom crash were echoed in the crypto market crises of 2022 and 2023. However, just as the Internet emerged stronger after the crash, the crypto ecosystem is now poised for further expansion and innovation.

Cryptocurrency adoption is multifaceted and encompasses use cases that go far beyond speculative trading. Below are some areas where we can expect technology to continue to have an impact:

• Construction applications: Developers and technologists are acquiring cryptoassets to use blockchain protocols, enabling the creation of decentralized applications. These applications are already improving real-world experiences, particularly in gaming, where new titles leverage blockchain to allow players to earn tokens and seamlessly transfer value between games.
• Investment opportunities: crypto assets are becoming an integral part of diversified investment portfolios. While a core group of adopters have been HODLing for years, retail and institutional interest is increasing with the introduction of regulated exchange-traded funds. These ETFs, linked to underlying assets such as bitcoin and ethereum (eth), give investors a more accessible way to interact with the cryptocurrency market. The portfolio of additional ETFs is growing, expanding investors' options.
• Treasury management: Corporations are also exploring the potential of cryptocurrencies, with companies like MicroStrategy using bitcoin as part of their treasury management strategy. Big players like Microsoft and amazon, as well as entire nations, are evaluating similar measures, recognizing bitcoin's utility as a long-term store of value.
• Cross-border transactions: Stablecoins are revolutionizing global remittances, allowing users, particularly in regions like Asia, to send money internationally with minimal fees and near-instant processing times.

Whether through decentralized applications, institutional investments in crypto ETFs, or everyday users leveraging stablecoins for payments, the crypto ecosystem will expand dramatically by 2025. The transformative power of Blockchain is not only reshaping industries, but also fostering greater financial inclusion and creating new opportunities for innovation.

As we move into the next phase, one thing is clear: the blockchain and crypto landscape is no longer niche – it is a growing force that is shaping the future of technology and finance.

Good companies prevail in difficult times

Just a few years ago, headlines frequently linked cryptocurrencies to illicit activities, a perception exacerbated by high-profile events, including the largest fraud in financial history. However, much like the dot-com crash, where companies like amazon and eBay emerged stronger, the cryptocurrency industry has proven its resilience and ability to evolve.

Recent research from Chainalysis highlights significant progress. Your 2024 report <a target="_blank" href="https://www.chainalysis.com/blog/2024-crypto-crime-report-introduction/” target=”_blank” rel=”nofollow”>reveals That illicit activity represents less than 0.5% of the total on-chain transaction volume. Additionally, its mid-year update showed that “aggregate illicit activity on the chain has dropped nearly 20% year-to-date,” underscoring the industry's progress in addressing misuse.

The events of 2022 eliminated many bad actors and financially unstable companies, paving the way for a stronger and more resilient crypto industry. This evolving landscape highlights that cryptocurrencies are no longer a haven for illicit activities, but are emerging as a model of accountability and traceability within the financial ecosystem.

Regulatory clarity will encourage adoption

Historically, the United States has been a global leader, setting the pace for innovation and regulatory standards. However, in recent years, political uncertainty has caused the United States to fall behind in establishing clear regulatory frameworks for cryptocurrencies. On the contrary, Europe has taken decisive action with the Markets in crypto Assets Regulation (MiCA), which is already in force for stablecoins and will be fully implemented on January 1, 2025.

During his campaign, President-elect Trump emphasized his commitment to ensuring that the United States leads in fostering innovation, particularly in the cryptocurrency space. He has expressed a clear ambition for the United States to become the world leader in bitcoin production and blockchain development.

This renewed focus is expected to accelerate the implementation of comprehensive regulatory frameworks in the US, making cryptocurrencies more accessible and compliant. These developments could pave the way for substantial new capital inflows into the industry, positioning the United States as a competitive hub for innovation and investment in digital assets.

Stablecoins will be used more widely

While nfts and meme coins have had their moment in the spotlight, 2025 could mark the emergence of stablecoins as a transformative force in the digital asset landscape. Historically, it has been dominated by a few key suppliers and several smaller suppliers. Momentum is expected to accelerate, with no fewer than a dozen major stablecoin projects anticipated in the first half of 2025, as multiple providers aim to capitalize on growing demand.

Initially designed as an efficient trading tool to bridge cryptocurrencies and fiat, stablecoins have evolved into a versatile solution for payments and settlements in digital and traditional finance. Their speed and low-cost processing are increasingly replacing fiat transactions in some conventional industries. Additionally, stablecoins serve as a critical gateway to decentralized finance, allowing users to seamlessly access emerging financial products and services.

Stablecoins are now recognized as a key innovation to modernize financial systems and promote financial inclusion. In response to this opportunity, BitGo is developing its own stablecoin, GoUSD, designed specifically to address these needs. With GoUSD, BitGo aims to provide users with a stable, efficient and inclusive financial tool for the digital economy.

Final thoughts

The beginning of institutional adoption has been a key driver of the rapid evolution of cryptocurrencies. Major financial institutions, hedge funds, and publicly traded companies are increasingly incorporating bitcoin into their portfolios, indicating confidence in the asset's long-term viability.

A notable example is MicroStrategy, which, as of December 16, 2024, held 439,000 Bitcoins, consolidating its position as a leader in corporate investment in bitcoin. This level of commitment from prominent institutions has significantly enhanced bitcoin's credibility as a mainstream financial asset.

Advances in blockchain technology and improvements in cybersecurity measures have further strengthened trust in bitcoin transactions, making cryptocurrencies more accessible and practical for everyday use. These developments not only improve user trust but also pave the way for broader adoption in institutional and retail markets.

Looking ahead, 2025 promises to be a pivotal year for the digital and crypto asset ecosystem. With continued innovation, growing adoption, and a focus on creating solutions that improve lives, the future of cryptocurrencies is poised to be as transformative as it is exciting.