In today’s issue, Leo Mindyuk from MLTech provides a crypto outlook for 2025 and highlights key factors that could drive the adoption of these assets.
then, Miguel Kudry from L1 Advisors shares his insights on the topic with Ask and Expert.
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2025 Outlook for Crypto Adoption: Building Bridges to the Mainstream
The crypto industry will enter 2025 with a renewed sense of purpose. Over the past year, the sector has witnessed major developments that indicate increased integration of crypto with traditional finance (TradFi) and wider use of crypto assets, especially bitcoin. However, the resilience of this growing ecosystem will be tested ahead. As we assess the outlook for 2025, several factors emerge as critical in shaping the adoption path: regulatory clarity, institutional involvement, and technological innovation.
1. Regulatory Clarity: Turning Uncertainty into Institutional Policy
As I briefly discussed my CoinDesk podcast about the election night results and the price action around it, regulatory clarity appears to be an important factor for crypto adoption. The market has already started pricing in the expectation that the newly elected officials will bring long-awaited structure to the digital asset ecosystem. We’ll see some of those expectations start to play out this year. Key areas where we are likely to see more clarity include:
a) Definition and classification of digital assets: The US is expected to refine how digital assets are classified – as securities, commodities, or some combination. This clarity will directly affect how tokens are issued, traded, regulated, and taxed.
b) Stablecoins: They are likely to be a major focus for regulators because of their transformative real-world use cases and potential impact on financial stability.
c) Taxation of crypto transactions: Recent changes have been made, and we are likely to see clearer tax reporting requirements for digital assets, various related activities, and various industry players.
Additional topics such as tokenization—including real-world assets—custodial and non-custodial wallets, regulated trading venues, decentralized finance (DeFi), anti-money laundering (AML) and know your customer (KYC) compliance, and consumer protections will be actively discussed and potentially actionable.
2. Institutional Participation: ETFs as a Catalyst
In 2024, crypto ETFs experienced explosive growth, with billions in net inflows and notable launches. With new products, crypto ETFs now represent a rapidly expanding part of the financial market, attracting significant investor interest and outperforming traditional funds. We will likely see a variety of adjacent products.
For 2025, growing inflows and high volumes in BTC and ETH ETFs will likely continue to validate crypto as an asset class and streamline access for retail and institutional investors. This will pave the way for other single-asset ETFs, multi-asset ETFs, and various adjacent ETFs (eg, leveraged, inverse, market-timing, volatility). If regulatory clarity progresses quickly, we may see the first US crypto yield-generating ETFs (eg, staking). These products can bring additional investor interest to the asset class and increase inflows into passive and active investment products.
3. Technological Innovation: The Convergence of Blockchain Scalability and AI
Technological advances in 2025 will be driven by Layer-2 blockchain scalability and AI integration. Rollups, zero-knowledge proof, and interoperability will improve transaction efficiency and user experience for decentralized applications (dApps) and DeFi. Simultaneously, AI agents operating in decentralized networks will solve and optimize various tasks and interact with users and each other. This synergy simplifies Web3 interactions and ensures secure, transparent execution of AI decisions on the blockchain. Together, these innovations will lower barriers to entry, attract developers and users, and accelerate mainstream adoption, making 2025 an important year for blockchain and AI convergence.
Summary
The outlook for crypto adoption in 2025 is very positive, but not without challenges. Regulatory clarity, institutional participation, and technological innovation will be the pillars of growth. The question isn’t whether crypto will gain mainstream acceptance—it’s how quickly and in what form. As we approach the next phase, people who adapt to the evolving landscape will take the lead in shaping the future.
Ask an Expert
Q. What have been the most influential developments in the crypto market over the past year, and how have they shaped crypto adoption?
The most important development in crypto in the last year has been the shift in politics, with President-elect Donald Trump making crypto a key part of his platform. Markets are just beginning to price in the impact of the Executive and Legislative branches, along with financial regulators, who have not only refrained from fighting the crypto industry but also encouraged crypto innovation within the United States. Beyond the adoption of bitcoin and the potential establishment of a national strategic bitcoin reserve, the broader implications for financial markets are still unclear to many market participants. Some of the world’s largest financial institutions that were previously on the sidelines are actively developing their crypto strategy in response to the new pro-crypto administration.
Q. How is the evolving regulatory landscape likely to impact crypto markets and institutional involvement in 2025?
The SEC’s regulation-by-enforcement approach has had a far-reaching impact on crypto markets. The move to a neutral – or even positive – stance means that financial professionals and institutions need to actively explore how to better serve their customers who are already engaged in crypto, especially given the decisive role its in the election. Additionally, they will need to adapt their offerings to remain competitive in a world where financial markets and assets increasingly run on crypto rails. Financial advisors, in particular, now have more opportunities to serve their clients by integrating crypto allocations and existing crypto portfolios into comprehensive financial planning and strategy.
Q. Given the macroeconomic climate, how should financial professionals think about integrating crypto into broader investment strategies in 2025?
The year 2025 will mark an important turning point for crypto, moving from being an asset class to being the infrastructure that underpins a growing portion of all asset classes. Put another way, with the adoption of crypto rails, financial professionals will be better able to respond to the macroeconomic climate, further accelerating the flywheel of asset tokenization, portfolio allocations, and wider adoption.
– Miguel Kudry, CEO, L1 Advisors
Continue Reading
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