(Kitco News) –Bitcoin proved to be the best-performing major asset in 2024, more than doubling in price to set a new all-time high above $100,000 per token and beating gold’s standout 26% gain in the process, but it was far from the only big story in the cryptosphere, as digital assets like Dogecoin quadrupled in value last year.
Looking ahead, many analysts and industry experts predict major developments for the digital assets ecosystem in 2025, including big changes in the industry and the regulatory environment, with Bitcoin and other tokens also poised for another banner year.
Key trends and narratives for 2025
Jacob Phillips, co-founder and head of strategy at Lombard, told Kitco News that DeFi will be the big story in 2025.
“In 2024, the crypto market peaked at $3 trillion, with Bitcoin commanding a dominant share of $1.9 trillion,” he said. “Yet, the decentralized finance (DeFi) sector accounted for just 1.4% of this total, despite offering one of the most compelling use cases: an open, permissionless financial ecosystem.”
“In 2025, we will see DeFi 100x and represent at least 10% of the crypto market,” Phillips predicted. “This explosive growth will be driven by a confluence of factors, with Bitcoin’s acceptance as an asset by traditional finance players in 2024 being the main catalyst.”
Lee Bratcher is president and co-founder of the Texas Blockchain Council (TBC), a nonprofit organization established to make Texas a leader in blockchain innovation and adoption. “At the current time, we are leaving the accumulation phase of the cycle and entering the bull market,” he told Kitco News. “No one can predict when the peak will be, but at some point, we will enter the euphoria phase that precedes the next bear market.”
“2025 is shaping up to be a defining year, fueled by the momentum of mass adoption and greater institutional involvement,” David Johnston, Open Source Contributor to the Morpheus AI ecosystem, told Kitco News. “One of the key drivers of this momentum is the widespread acceptance of crypto-related ETFs, which have opened the doors for traditional investors to easily access this asset class. The entry of institutions has also added a layer of stability and credibility, as major players allocate resources to blockchain and crypto technologies, recognizing their long-term growth potential.”
Jay Jog is co-founder of Sei Labs, which builds open-sourced technology for Sei, a scalable Layer 1 blockchain. He told Kitco News that he expects to see three trends gain traction in 2025.
The first is greater regulatory clarity. “A pro-crypto Trump administration will hopefully result in crypto legislation being passed, which will help decrease uncertainty around the space,” he said.
The second is increased interest from founders to build startup companies in the crypto space. “Greater regulatory clarity will greatly de-risk building crypto startups for American founders, leading to greater technical innovation in the space,” Jog said. “The United States continues to be the heart of the technology industry, and the crypto industry will benefit from the rapid technical improvements that a new influx of American startup founders can bring to the space.”
And the third development Jog predicts is the ramping up of investment into the cryptosphere. “Greater regulatory clarity will make it easier for investors to learn about the space,” he said. “This will likely result in more LP commitments to Venture Capital firms, which will help spur greater technical innovation.”
Bitcoin: The ever-growing elephant in the room
2024 was a watershed year for Bitcoin, with the approval and launch of spot Bitcoin ETFs in the United States helping to push the price up over $100k before year-end. However, most industry experts believe King Crypto has plenty of fuel in the tank for 2025, and a number of key technological innovations have the potential to propel it significantly higher this year.
Shawn Owen is the founder and CEO of SALT, a leader in cryptocurrency-backed lending. Owen believes this Bitcoin cycle is different from previous ones because the top crypto is transitioning from speculative growth to adoption as a core financial asset.
“While previous cycles were driven by retail hype, this one feels fundamentally different due to increasing institutional adoption,” he told Kitco News. “Companies and governments are now exploring Bitcoin as a reserve asset, pushing long-term growth.”
Owen said that the combination of persistent inflation and growing global trust in Bitcoin means the current cycle likely has significant further upside. “Price predictions are always speculative and I’m usually too conservative, but if historical patterns hold, the cycle could peak in the next 12–18 months, with new all-time highs that will melt faces,” he said.
Bratcher also believes that this cycle will differ from previous cycles because of greater institutional involvement, more regulatory clarity, and global adoption trends. “Over 200 million people worldwide have a digital wallet according to a16z’s recent state of the market report,” he noted. “There is always risk of a black swan event, but that can happen in any market.”
Rich Rines, initial contributor to Core DAO, believes we’re still very early in the Bitcoin supercycle. “ETFs got Bitcoin on the main stage, but what’s next is where Bitcoin will really shine,” he told Kitco News. “The biggest takeaway is that Bitcoin is no longer only a passive store of value. Bitcoin staking makes Bitcoin a productive asset for the first time in history, and Bitcoin DeFi unlocks even more potential for innovation to happen on Bitcoin financial rails.”
Phillip Shoemaker is executive director of Identity.com, a non-profit organization that provides decentralized identity verification. He told Kitco News that sovereign adoption of BTC is a particularly intriguing trend.
“An interesting thing about Bitcoin is how many nations are putting it on their balance sheets, which in turn makes other countries consider doing the same thing,” he said. “We’ve seen what Michael Saylor has done, along with El Salvador, and now Switzerland and others are likely to follow suit. This means there is going to be much more upside over time, and it won’t just go away as many detractors had originally hoped for Bitcoin.”
Shoemaker anticipates that government adoption will magnify Bitcoin’s upside during the current cycle. “In this sense, we are not in a normal cycle,” he added. “We’ve entered new territory and I’m excited to see how it will play out.”
Alan Orwick is the co-founder of Quai Network, a fully scalable and programmable Proof-of-Work Layer 1 for the global and compute economies. Orwick told Kitco News that Bitcoin is in the early to mid-stage of this bull market cycle where Bitcoin's price typically continues to rise post-halving.
“Price predictions vary, but analysts expect Bitcoin to potentially reach between $155,000 and $175,000 by August 2025,” he said. “Some more optimistic forecasts suggest peaks could hit $250,000 to $300,000 if the cycle follows historical patterns or if significant catalysts like institutional adoption or favorable regulations occur.”
He added that the market factors influencing Bitcoin price targets include “increased institutional involvement, introduction of Bitcoin ETFs, and broader recognition of Bitcoin as a store of value.”
Sid Powell is co-founder and CEO of Maple, one of the largest institutional capital marketplaces built on the blockchain. Powell told Kitco News that he believes we’re still in the early innings of the Bitcoin cycle.
“BTC could do another 100% over the course of this year based on increasing institutional adoption and expected ETF inflows,” he said. “Every BTC cycle is different as the asset class gets larger. This one will probably see less upside volatility given the market cap of BTC is now much larger, so it takes more to move the needle. The flip side of this is that it may be longer and more sustained off the back of ETF inflows and more products being built around BTC, which institutions can access more easily.”
Jagdeep Sidhu, Core Developer at Syscoin and President of the Syscoin Foundation, told Kitco News that when evaluating Bitcoin, it’s important to focus first on the long-term dynamics.
“In this case, we are still very early to the BTC-adoption trend, meaning that the upside is still profound, especially when considering that governments, sovereign-wealth funds and corporations are only now acquiring Bitcoin in meaningful size,” he said. “I don’t give price predictions, but Bitcoin rivaling or even surpassing gold’s market capitalization is very much possible in the coming decade.”
Sidhu thinks we’re further along in this cycle than many of his contemporaries believe. “I suspect we are in the fourth year of what typically are four-year cycles, meaning that we could experience significant upwards momentum until something of a cooling off happens by year end,” he said. “That said, I’m not convinced that Bitcoin will again enter a deep bear market involving something like a 70 percent pullback. Bitcoin adoption is now so deep and widespread, especially at the institutional level, that pullbacks will become shallower and shallower.”
AI, DeFi, BTC scaling projects will dominate altcoins in 2025
In the altcoin market, 2024 was the year of memecoins and artificial intelligence, and while most industry insiders expect AI to maintain its momentum this year, many are calling for DeFi projects and stablecoin to displace DOGE and the other meme leaders in 2025.
Orwick believes that AI and stablecoins are the sectors to watch this year. “In 2025, I expect all things AI and stablecoin to outperform,” he said. “Stablecoins facilitated over 1.1 billion transactions by Q2 2024, amounting to $8.5 trillion in transaction volume, which surpasses Visa's volume. Stablecoins are an emerging trillion-dollar industry that challenges the dominance of traditional payment systems like Visa and Mastercard.”
“If stablecoins become the de facto payment method in emerging markets, as SpaceX has shown with Starlink, this could unexpectedly boost the adoption of certain stablecoins like $USDC or Tether, leading to significant market share shifts,” he added.
Orwick also expects to see AI tokens and projects building on their strong performance from last year in 2025. “New sectors like DeAI, DeFAI, and decentralized compute will enable more use cases for AI in the crypto ecosystem. DeAI will facilitate decentralized AI development and data sharing, ensuring transparency and removing single points of failure. DeFAI will integrate AI with DeFi to automate financial processes, enhance decision-making, and potentially introduce new financial products. Meanwhile, decentralized compute will provide scalable, secure computing resources for AI operations on blockchain, promoting innovation in areas like autonomous agents and machine learning models, thus driving further adoption and investment in AI-focused cryptocurrencies.
Rene Reinsberg is co-founder of Celo and president of the Celo Foundation. He told Kitco News that he’s expecting to see more stablecoins for long tail currencies in 2025.
“A wide array of stablecoins tracking local currencies, including the Kenyan Shilling, Colombian Peso, and Philippine Peso launched in 2024 - and this is just the beginning,” he said. “The expansion of onchain FX markets and efforts led by projects lending in local digital currencies will accelerate the adoption of this already growing sector.”
“Decentralized AI and AI Agents are the hottest sector of Crypto, bar none right now,” Johnson said. “The merger of programmable money with programmable intelligence is also accelerating rapidly, providing fertile ground for innovation. Projects that stand out in this space include Morpheus, Akash, Bittensor, Virtuals, and AI16Z.”
Shoemaker also predicts outperformance from AI projects, at least for H1 2025. “This is the big trend at the moment, and we will see more and more uses for these AI-based coins and related platforms,” he said. “This isn’t the ICO boom – these AI coins are likely to show a lot of utility for users. In terms of surprises, I think a Solana ETF will get approved and this will be further validation of this promising network.”
“We see DeFi tokens outperforming in 2025, driven by the benefits of a more favorable regulatory posture under new SEC leadership,” Powell said. “Real World Assets continue to be an interesting subsector for institutional and retail investors. We’re quite excited about the tokenization of private credit, which has been the fastest-growing sector in traditional finance.”
He is more skeptical than others about the growth potential for AI tokens this year. “Agent coins have also received considerable interest, though this is admittedly still largely fueled by hype, and we’re yet to see the first breakthrough application to feature AI on-chain,” he said.
Powell also sees meme tokens petering out this year. “In many ways, they were a counterreaction to regulatory attacks on the space, which made it riskier to have any kind of utility around tokens.”
Sidhu noted that many industry and market experts expect AI and memecoins to do well. “That certainly could be the case,” he said. “I think that projects that are working to scale Bitcoin will outperform given that it’s the anchor asset of our industry with the deepest liquidity and most durable security.”
“The two major drivers of 2025 will be Bitcoin and product-market fit,” Rines said. “Bitcoin is the sun around which this entire ecosystem revolves. Building on Bitcoin will continue to be a huge theme of 2025. On top of that, the Bitcoin and broader crypto ecosystem are now in product-market fit mode. Success will be judged by real users having real use-cases. Elsewhere, surprises could come from Bitcoin-backed stablecoins gaining traction as a medium of exchange and the rapid expansion of liquid staking protocols like LstBTC on Core.”
“AI agents empowered with crypto wallets are starting out of the gate as the most interesting and influential trend in 2025,” said Bratcher. “Key features of AI agents using crypto to demonstrate agency include autonomy/agency, the use of smart contracts, and decentralization. The tokens associated with these AI agents are driven by meme coin-esque attention dynamics.”
Adoption, investment and startups will drive the industry forward in 2025
As for the digital assets industry itself, insiders see AI and DeFi impacting how companies big and small operate and collaborate, even if these are not where the core value of their projects are found, and the ongoing adoption trend in the mainstream financial industry and beyond is also expected to raise all boats this year.
“The megatrend is AI, and AI in crypto is manifesting in multiple ways,” said Sidhu. “There’s, of course the agentic platforms like ai16z, but I think AI tech will increasingly be used in the core infrastructure of various protocols, including serving as validators of sorts in trying to reach consensus. AI, after all, can be tooled to be more efficient and potentially far less biased than human-run systems, all of which makes this technology a very useful tool for the broader crypto ecosystem.”
“In terms of surprises, I do think we could see more governments not only putting Bitcoin in their treasuries but also utilizing zero-knowledge technology for protecting the privacy of their citizens when it comes to a number of online transactions,” he added.
“The key trend to watch at the moment is institutional adoption,” said Powell. “This was kicked off with the ETF approval and continued to gain steam with the market perceiving that the new US administration will take a more favorable stance to institutions participating in on chain financial products.”
“We think most of the innovation will come in DeFi this year, with a resurgence in interest in the sector. Keep an eye on the integration of AI into some of these products, we at Maple are very excited by the idea of using AI for the management of our on chain lending pools. The first AI-originated DeFi loan may happen before the end of 2025.”
“Institutional adoption of Bitcoin yield products and BTCfi will lead the way,” said Rines. “Consolidation within the industry is inevitable, with leaders in staking and infrastructure driving outsized value capture. In terms of regions, it appears the US will finally be a leader in terms of crypto adoption. Bitcoin’s integration into traditional finance through large-scale corporate treasury strategies is finally possible.”
Orwick said the introduction and growth of Bitcoin ETFs is just the beginning. “We can expect more complex financial instruments like crypto-index funds, options, and futures for a broader range of cryptocurrencies,” he said. “Institutional investors might start to explore staking, yield farming, and lending in DeFi, bringing more stability and liquidity to these platforms. More corporations might consider holding cryptocurrencies as part of their treasury reserves, especially if Bitcoin is seen as a hedge against inflation or currency devaluation.”
“Innovation is happening in a decentralized way, so there are pockets of adoption and innovation around the globe,” said Bratcher. “Naturally there are some jurisdictions that are over-represented on the adoption and innovation front as a result of favorable regulatory environments. The winners are locations like Switzerland, Hong Kong, Dubai, Japan, and the U.S. states of Texas, Wyoming and Florida. As a result of MiCA, the EU may also become a hotspot, but that remains to be seen.”
Reinsberg predicts AI will continue to streamline enterprise operations and capture the interest of everyday users this year.
“With Deloitte anticipating AI agent adoption by 25% of enterprises this year, we're in the early days of AI's remarkable growth, which will continue throughout 2025,” Reinsberg said. “As the technology becomes more accessible and user-friendly, novel use cases will emerge that meld the sector with crypto, like onchain FX trading powered by decentralized autonomous agents.”
“As a16z crypto’s Chief Technology Officer Eddy Lazzarin predicted, this rise in AI agents will lead to the growth of another sector: decentralized identification,” he added. “DiD protocols that protect users’ private information will help confirm that users are, in fact, real people in a landscape with increased AI agent participation while maintaining the privacy and security necessary for a productive onchain economy.”
“Institutional interest is going to climb and climb,” said Shoemaker. “So many of these investors, such as hedge funds, asset managers and publicly traded companies, are getting interested. We also will see more payment integrations, meaning that big payment platforms will accept crypto for payments.”
“I’m also excited to see network optimization for Bitcoin, such as the Lightning Network and various scaling solutions,” he added. “As more and more people and companies integrate crypto, the crypto tech itself needs to get better. Most of these networks are not optimized for daily, sustained use. So making these networks more usable will be a key thing to watch out for.”
More favorable regulation in 2025, but still an uneven playing field
Turning to the regulatory environment, experts are predicting a much more positive approach to digital assets in the United States and around the world, but the road will remain bumpy and the landscape uneven.
In the U.S., Sidhu said it’s clear that the SEC’s “unfair approach” to the broader crypto industry is coming to an end. “The Trump Administration is going to push for regulations that help foster healthy growth in crypto so that more and more people can benefit from this technology,” he said. “With this in mind, I think the CFTC will likely play a greater role in crypto regulation. Moreover, because the United States is poised to be so pro-crypto under Trump, we could see a proverbial arms race happen where other governments work to adopt Bitcoin and crypto at scale. This industry is becoming competitive at a global scale, meaning that governments will compete with each other to become hubs of crypto innovation.”
“Stablecoin legislation will pass in the U.S. in 2025, and it will become apparent to everyone that stablecoins, as forced buyers of U.S. Treasuries, will be an instrument for increasing the longevity of the dollar as the world reserve currency,” Bratcher said.
Johnston: “With the US shifting to a more friendly stance toward Crypto, this has the potential to pressure Canada, Europe, UK, and others in the Western sphere to adopt more favourable regulatory frameworks that don’t unnecessarily stifle innovation,” said Johnson.
“With the US under a Trump administration shifting towards a more crypto-friendly tone, US leadership is being reignited in the space, reversing the talent and capital flight,” Rines said. “Watch for more US builders entering the crypto space, igniting future applications.”
Jog believes 2025 could be a watershed year for regulation. “The crypto industry at large is excited about more clearly defined regulations, as opposed to the regulation-by-enforcement approach taken by current regulators,” he said. “Once there is greater regulatory clarity, it becomes easier for startup founders and investors to spend more time and money in the space, which will help accelerate the industry's growth and adoption as well.”
“The SEC vs. CFTC battle over jurisdiction will play a critical role in defining crypto’s future in the U.S.,” Owen said. “Globally, Europe’s MiCA framework and China’s evolving blockchain policies will shape markets. A pro-crypto U.S. administration could foster innovation while demanding greater transparency, especially in crypto lending. All eyes on the White House in 2025.”
“In 2025, key regulatory developments to watch include the ongoing SEC vs. CFTC jurisdictional tug-of-war, potential new licenses for crypto products, and the regulation of stablecoins,” Orwick said. “The repeal of SAB 121 and the passage of FIT21 through the Senate would be significant game-changers.”
Repealing SAB 121 would alleviate the burden on banks to record digital assets as liabilities, potentially fostering more direct involvement in crypto custody and services by traditional financial institutions. FIT21 passing would clarify the regulatory framework by giving the CFTC oversight over digital commodities, providing much-needed clarity and potentially spurring innovation by reducing the regulatory ambiguity that has stymied some crypto businesses.
If Trump 2.0 leads to these changes, it could significantly boost the U.S. crypto market, influencing global standards by setting a precedent for crypto-friendly policies.
“Keep an eye on stablecoin regulations,” said Powell. “We’ve seen a lot of interest in this area from neobanks and traditional finance institutions. Last year saw a flurry of launches, with PayPal and Ripple both entering the stablecoin space and Stripe making a strategic acquisition of Bridge.”
Powell said the market will be closely following the first guidance put out by Atkins, the new Chair of the SEC. “This will signal whether the more collaborative approach expected by the industry is to materialize,” he said.
He is more pessimistic about regulatory prospects across the pond, however. “Europe will be in its first year of MICA; this was touted as regulatory clarity that would help European startups,” Powell said, “but the concern is that, unfortunately, as with most European regulation, it will actually have the effect of killing startups and driving talent away into the arms of the US.”
Bratcher also believes that the United States is poised to take the reins of the cryptosphere under the new administration. “Trump has surrounded himself with excellent crypto policy advisors, including David Sacks, who is a crypto and AI czar; Paul Atkins at the SEC; Bo Hines; Vivek Ramaswamy; and Elon Musk,” he said. “The potential for the next digital economic revolution in the U.S. is very real and fast approaching. Prior to November 5th, 2024, it was anyone’s guess who would dominate and reap the benefits of hosting the digital asset revolution.”
“Trump is going to make regulation of crypto simpler, and we will get good frameworks in particular from the SEC,” Shoemaker said. “But all across the board, including the Department of Governmental Efficiency, the Trump team will push more broadly for simpler regulation. We see this trend in general with Trump wanting to reduce regulation.”
“As for China, there’s been some crackdowns on Bitcoin and they might ultimately become less strict towards digital assets because of the Trump effect,” he added. “Even countries like Iran are starting to implement better regulations regarding crypto. For Europe, I’m not so convinced about crypto support, even as they have sought to create fairer and clearer guidelines. But, again, Washington becoming more favorable to crypto will likely have similar implications for Europe.”
“So, in short, across the board we will see more leniency in terms of crypto regulations, primarily because the U.S. leads the way with these broader technology and financial trends.”
Milestones, wildcards and black swans on crypto’s bright horizon
Of course, even among all the positivity and optimism, crypto would be crypto without massive, unpredictable, and destabilizing events – both good and bad – and 2025 promises a few of its own, along with some significant but more predictable milestones.
“One pivotal milestone to keep an eye on is the global crypto user base surpassing 1 billion people, which will mark an inflection point for the industry,” Johnson said. “Adoption is accelerating rapidly, moving beyond early adopters and reaching the critical mass of the early majority phase. This tectonic shift will take the industry to new heights, and will have a significant trickle-down effect in terms of enticing new entrants into the Web3 workforce.”
“The common narrative for a prolonged cycle is the infamous ‘supercycle’ where traditional deep corrections are less severe,” said Orwick. “In my opinion, crossing $100,000 is a significant mental barrier that enables Bitcoin to be viewed as a global commodity similar to gold. I could see that thesis playing out over the next decade, with a price of $900,000 per Bitcoin by 2035.”
And while NFTs and memecoins have captured attention with their short-lived hype cycles, Phillips said DeFi will provide the tangible value needed to drive mainstream adoption. “The true power of crypto lies in DeFi’s ability to provide open, permissionless financial infrastructure rather than viral tokens, signaling a shift in the maturing landscape.”
Jog said that the potential for a strategic reserve and changes to capital gains taxes are two major wild cards to watch going forward.
“Several politicians have started discussing creating a strategic reserve of BTC that the US government would maintain,” he said. “This would be a huge show of support for the crypto industry and help cement cryptocurrencies as a more established asset class.
“There have been mentions of creating a zero percent tax rate on certain types of cryptocurrencies,” Jog added. “This would have large ramifications for the space, as it would lead to greater investor and startup founder interest, helping accelerate growth.”
“A Bitcoin strategic reserve in a state like Texas or Florida will have a material impact on the game theory behind Bitcoin’s global adoption,” Bratcher said. “The Texas economy is the 8th largest in the world, larger than Brazil or Canada and approaching the size of France and Great Britain. That is much more significant than a country like El Salvador creating a Bitcoin strategic reserve.”
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