2025 is the year of crypto. When Donald Trump takes control of the White House later this month, he’s bringing a host of Silicon Valley heavy hitters to Washington with him. For better or worse, we can expect a push towards deregulation and crypto-friendly policies.
Beyond policy and politics, what will the effect be on cryptocurrency markets in 2025?
What is crypto for?
Sometimes it feels useless to even try predicting crypto rallies. As one biting post on the platform-formerly-known-as-Twitter puts it: “It must really suck to be too smart to make money in crypto but too dumb to make money in AI”.
It’s a throwaway joke with an edge: there have been plenty of sophisticated criticisms of crypto’s apparent lack of fundamentals, and expert analyses demonstrating why bitcoin’s rally is nothing but an unusually massive bubble (an assessment that seemed borne out by the ‘crypto winter’ of 2022), but if you’ve been to smart to put your money in a speculative experimental assets like Bitcoin over the last couple of years, you’ve missed out on record gains.
Were the sceptics wrong? Does it even matter? Writing in Bloomberg, crypto investor Aaron Brown offers an interesting synthesis. In 2025, we could see more investment in crypto projects, bringing these into the mainstream. Accelerated funding for cutting edge crypto projects, Brown suggests, we could see the industry mature and finally realise its potential. However, Brown cautions, “if they fail, the historical pattern will probably repeat, and we can expect another crypto winter.”
The position is radical in that it takes crypto seriously. That is, as a technology with great promise but one that needs to deliver to sustain its investment case.
Systemic risk
Crypto’s move into the mainstream could mean big returns for investors. It could also bring significant risk to the broader economy.
As one researcher told the Financial Times, “the broader adoption of crypto at both the retail and institutional level certainly could pose some risks”.
As the FT points out, as crypto assets become “increasingly entwined with the traditional financial system”, a crypto downturn could have more wide-ranging consequences that before.
There’s an important lesson for investors. If 2025 really does turn out to be the year crypto, everyone needs to pay attention to crypto markets, even if they have no intention of investing in crypto assets directly.
Beyond Bitcoin
Bitcoin dominates the headlines, but there’s more to crypto investing than BTC. Commentators have noted that Ethereum hasn’t kept pace with Bitcoin’s meteoric ascent. Now that ETH is easier to invest in, will 2025 see Ethereum outperform Bitcoin?
Managing volatility
At Finalto, we’re preparing for 2025 by ensuring our ‘business as usual’ strategy is more robust than ever. Our priority, as always, is to ensure that our clients have the support they need to navigate volatility and ensure there is always sufficient liquidity to service client needs.
To learn more about our proactive risk strategy and award-winning liquidity solutions, get in touch with Finalto. We give you access to the world’s markets, including simple access to the most popular cryptocurrencies.
All opinions, news, research, analysis, prices or other information is provided as general market commentary and not as investment advice and all potential results discussed are not guaranteed to be achieved. The information may have been derived from publicly available sources, company reports, personal research, or surveys. Past performance is not indicative of future performance. Trading carries risk of capital loss. Service available to professional clients only.
