We believe the crypto industry will continue to set new highs in 2025, primarily driven by the gradual clarification of regulatory policies and more crypto-friendly policymakers.

The positive developments after the US presidential election, the shift in investor sentiment towards the crypto industry, and the supportive market backdrop could drive the performance of crypto assets. Former President Trump has expressed his desire to establish a strategic Bit reserve and appointed policymakers who are supportive of the crypto industry.

Crypto assets performed strongly in 2024. With the Republican Party winning the House, Senate, and the presidency, Bit broke through the $100,000 mark, and the total market capitalization of all crypto assets reached $35 trillion as of January 31, 2025. The US stock market has risen 4.8% since the election, Bit has risen 47.6%, and Ether has risen 37.4%. We expect this momentum to continue in 2025, as a series of positive news and legislative progress appear to be possible.



In our view, crypto assets are largely influenced by the macroeconomic environment and market sentiment, which could lead to significant price volatility. Currently, the market environment and sentiment are shifting in a more favorable direction for crypto assets, including some positive developments after the US election, investors' more friendly attitude towards the crypto industry, and the overall supportive market backdrop due to central bank rate cuts and the global economy's return to normal growth.

We have outlined the following five key factors that suggest crypto assets are likely to continue performing well in 2025.

01
Crypto-friendly US policymakers taking office

Former President Trump has stated that he will continue to implement a series of crypto-friendly policies, including his desire to establish a strategic Bit reserve and appoint policymakers who support the crypto industry in key regulatory agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). However, support for crypto assets does not come from the president alone. According to data from a pro-crypto industry group, 294 candidates from both parties who support the crypto industry were elected to the US House and Senate in the 2024 elections.

This could mean that Trump's policies will be very different from the Biden administration, which has been hostile towards crypto assets. For example, SEC Chairman Gary Gensler's SEC has repeatedly sued crypto companies, but without clearly stating the specific framework they are following, leading to criticism of an "enforcement-first" approach. Biden himself has also opposed the crypto industry, despite the bipartisan support for the 21st Century Financial Innovation and Technology Act (FIT21).

One key point of contention is SAB 121 - an SEC announcement issued in 2022 that requires publicly traded entities to strictly comply with regulations when custodying crypto assets for clients. SAB 121 requires these entities to list crypto assets on their balance sheets, triggering capital regulatory requirements and making it impossible for most banks to participate in the digital asset ecosystem. Because SAB 121 requires publicly traded entities to include crypto assets on their balance sheets, and most banks lack sufficient capital or relevant risk management measures to support this additional burden, they are unable to participate in the crypto asset ecosystem.

Due to the lack of effective custody solutions from banks, many crypto investors have had to turn to some expensive and often unreliable alternatives. Now, SAB 121 has been repealed, paving the way for more large institutions to provide crypto asset custody services.

With the change in US policy on crypto assets, we expect more investors to start accepting crypto assets, which could drive the crypto market into a bull market. Since the November election, investor interest in US Bit CEX-traded products (ETPs) has continued to rise.

Growth in total assets and inflows of the US Bit ETP since its launch on January 11, 2024

02
Investing in crypto assets is becoming easier

In 2024, the US and Hong Kong launched spot Bit products (ETFs), which, according to Bloomberg data, have attracted $34.6 billion in net inflows by the end of 2024. By 2025, more countries may allow a wider range of investors to participate in spot ETF trading, and more crypto assets may also become more investable through ETFs. According to the latest regulatory filings from the US SEC as of the end of January, multiple ETF plans have begun investing in other crypto assets. With the launch of more investment products to attract more investors, we expect the prices of crypto assets to potentially rise as a result.

03
Perceptions of Bit are changing

As Bit's market capitalization continues to grow, investor attitudes towards this leading crypto asset are also constantly changing. In January 2024, the US launched a widely accessible spot Bit ETP, a significant milestone that provided investors in the world's largest capital market with a convenient way to easily invest in Bit (and potentially Ether in the future). For example, as of January 11, 2024, US investors have invested $40.6 billion in the spot Bit ETF, and by the end of 2024, the total assets of this product reached $101.8 billion. In comparison, the gold ETF has $124.2 billion in assets under management.

One year after the launch of the Bit ETF, its asset size is approaching the level of the US gold ETF.

04
The market environment appears more favorable

Interest rate cuts in major economies such as the US, Eurozone, and UK suggest that 2025 could be a "risk-on" year for global markets. In fact, we are more optimistic about more cyclical sectors in the market in 2025, such as equities and credit. With investors more willing to take on risk, crypto assets may receive support, as they are typically more influenced by the macroeconomic environment.

05
Tokenization is gradually progressing

Token-based is the process of recording certain assets or information on the blockchain in the form of Tokens, which brings many benefits to asset management and exchange. We believe that the current financial system can achieve various potential advantages through Token-based, such as reducing counterparty risk, accelerating payment and settlement speed, and enhancing the personalized customization of customer investment experience.

Over the past five years, pilot projects of central bank digital currencies and asset Token-based have made gradual progress, including Token-based money market funds, Token-based bonds, and Token-based crowdfunding market products. The UK government plans to issue its first Token-based government bonds within the next two years. In the Eurozone, the European Central Bank is preparing to launch the digital Euro, which is expected to further promote the development of Token-based applications. As this technology becomes more widespread, we expect that crypto-assets may also benefit from it.

06
Summary: 2025 is a year worth watching

Crypto-assets are a highly volatile investment that may fluctuate significantly due to news events. Overall, the reason we believe the crypto market will continue to hit new highs in 2025 is mainly due to the improvement in regulatory transparency and more friendly policies, which have brought positive news to digital assets (such as the price fluctuations of the crypto market after Trump's election, the news of Trump's nomination of the chairman of the US Securities and Exchange Commission (SEC), and the US's decision to approve spot Bitcoin and Ethereum ETFs). We also expect that interest rate cuts in many major economies may stimulate the demand for risky assets.

Note: The above views only represent the author's personal views as of February 14, 2025, and should not be regarded as investment advice, but only for reference. Forward-looking statements do not guarantee future results, and the risks, uncertainties, and assumptions involved may lead to actual results differing from expectations.

This article link: https://www.hellobtc.com/kp/du/02/5679.html

Source: https://mp.weixin.qq.com/s/UVpttxW56GHxKvOiMPiNbw