The crypto landscape of 2024 brought forth several remarkable developments, with the advent of spot Bitcoin and Ether ETFs taking center stage. As we step into 2025, our eyes are set on the potential emergence of similar US funds embracing other crypto assets like Solana and XRP, although the timeline remains uncertain.
In the existing crypto asset pool, comprising mostly of Bitcoin and Ether, there is anticipation around who will join the bandwagon next. Pension funds, wealth managers, and other institutions have been notably reticent, their apprehensions mirroring the volatile nature of the crypto market.
The investment banking giant, Morgan Stanley, made headlines last year by allowing its advisors to recommend Bitcoin ETFs to certain clients. This precedent-setting move has the industry waiting with bated breath to see if other wirehouses will follow suit.
Meanwhile, the crypto community is curious to see if industry leaders like Vanguard will revise their conservative stance on cryptocurrencies. However, the likelihood of this happening within 2025 seems slim. Another question looming in the air is whether Schwab will venture into launching a spot crypto ETF.
Donald Trump’s promises around cryptocurrencies have been well-documented. However, the implications of his nomination of Paul Atkins as SEC chair and the potential establishment of a US Bitcoin reserve are topics of speculation.
The SEC’s potential rescission of SAB121 is another hot topic. Ava Labs’ deputy general counsel, Wee Ming Choon, regards the elimination of this guidance as a potential quick win for a new agency administration.
Additionally, the progress of FIT21 and US stablecoin legislation are under scrutiny. Choon believes that there’s a broad understanding in Congress about the urgency of these matters, and hopes that the extensive work done over the past 18 months will provide a foundation for action.
While the US initially lagged in implementing robust crypto regulatory frameworks, Choon is optimistic that progress on these fronts could change the game.
Rep. French Hill’s recent appointment of Allison Behuniak, a digital assets expert, as policy director of the House Financial Services Committee, is a promising development for crypto enthusiasts.
The possibility of more crypto firms going public this year also hangs in the balance. Circle, Kraken, and Figure Technologies are among the potential contenders.
Crypto ETFs have been largely dominated by BlackRock, demonstrated by the launch of a tokenized money market fund in March. However, Franklin Templeton’s similar offering launched in 2021, and the combined assets of these funds amount to roughly $1.2 billion.
The RWA tokenization segment is projected to grow tenfold this year, potentially reaching around $50 billion. But this depends on whether institutions perceive sufficient value in the emerging use cases.
Without a doubt, 2025 will be a defining year for the crypto space, shedding light on these topics and more. The trajectory of this dynamic industry is poised to unfurl in exciting ways, keeping us on our toes as we navigate the twists and turns of the crypto world.
