In today’s edition, Leo Mindyuk of 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 in Ask and Expert.
–Sarah Morton
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2025 Outlook for Crypto Adoption: Build Bridges to the Mainstream
The crypto industry enters 2025 with a renewed sense of purpose. Over the past year, the sector has witnessed important developments that signal the increasing integration of crypto into traditional finance (TradFi) and wider adoption of crypto-assets, particularly bitcoin. But the way forward will test the resilience of this growing ecosystem. As we assess the outlook for 2025, several factors emerge as decisive in shaping the adoption trajectory: regulatory clarity, institutional participation and technological innovation.
1. Regulatory clarity: Turning uncertainty into institutional guidelines
As I briefly discussed on my CoinDesk podcast about election night results and the price action surrounding them, regulatory clarity is emerging as a key factor for crypto adoption. The market has already started pricing in anticipation that 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:
one) Definition and classification of digital assets: The US is expected to refine how digital assets are classified – whether as securities, commodities or a combination. This clarity will directly affect how tokens are issued, traded, regulated and taxed.
b) Stablecoins: These are likely to be a major focus for regulators due to their transformative real-world use cases and potential impact on financial stability.
c) Taxation of crypto transactions: The latest changes have already 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 protection will also be actively discussed and potentially acted upon.
2. Institutional participation: ETFs as a catalyst
By 2024, crypto ETFs saw explosive growth with billions in net inflows and notable launches. With new products, crypto ETFs now represent a fast-growing financial market segment that attracts significant investor interest and outperforms traditional funds. We will likely see a number 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 open 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 enough, we could see the US’s first crypto-yielding ETFs (eg stakes). These products can bring additional investor interest to the asset class and increase access to passive and active investment products.
3. Technological Innovation: The Convergence of Blockchain Scalability and AI
Technological advancements in 2025 will be driven by Layer-2 blockchain scalability and AI integration. Rollups, zero-knowledge proofs and interoperability will improve transaction efficiency and user experience for decentralized applications (dApps) and DeFi. At the same time, AI agents operating on decentralized networks will solve and optimize a number of 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 a pivotal year for blockchain and AI convergence.
Overview
The outlook for crypto adoption in 2025 is overwhelmingly positive, but not without challenges. Regulatory clarity, institutional participation and technological innovation will be the pillars of growth. The question is not whether crypto will gain mainstream acceptance – it’s how quickly and in what form. As we approach this next phase, those who adapt to the evolving landscape will be at the forefront of shaping the future.
– Leo Mindyuk, CEO, ML Tech
Ask an expert
Q. What were the most influential developments in the crypto market over the past year and how have they shaped crypto adoption?
The most significant development in crypto last year was the political shift in which President-elect Donald Trump made crypto an important part of his platform. Markets are only beginning to price in the impact of the executive and legislative branches, along with financial regulators, who not only refrained from fighting the crypto industry, but also encouraged crypto innovation in the United States. Beyond bitcoin adoption and the potential establishment of a national strategic bitcoin reserve, the broader implications for financial markets remain unclear to many market participants. Some of the world’s largest financial institutions, previously on the sidelines, are now 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. A shift to a neutral — or even positive — stance means that financial professionals and institutions must actively explore how to better serve their customers who are already engaged in crypto, especially given its pivotal role in the election. Additionally, they will need to adapt their offerings to remain competitive in a world where financial markets and assets increasingly operate on crypto rails. Financial advisors in particular now have more options to serve their clients by incorporating 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 a decisive shift for crypto, moving from being just an asset class to becoming the infrastructure that supports a growing portion of all asset classes. Put differently, with the adoption of crypto rails, financial professionals will be better equipped to respond to the macroeconomic climate, further accelerating the flywheel of asset tokenization, portfolio allocations, and broader adoption.
– Miguel Kudry, CEO, L1 Advisors
Continue reading
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