The TRADE predictions series 2025: The future of cryptocurrency

Kate Karimson, chief commercial officer, R3     

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Next year is set to be the year of public and private collaboration for the blockchain industry, with US elections bringing greater confidence in some areas and uncertainty in others. Turning tides means the US crypto landscape is likely to look significantly different by the end of 2025. Republican control of the White House and Congress should enable much anticipated legislation, clarifying the role of regulating agencies and providing confidence, with industry innovation being supported. While DLT is still gaining traction in US financial markets, having been constrained by regulatory uncertainty, an established regulatory framework will drive tailwinds. 

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Outside the US, 2024 has been a landmark year with industry collaborations illustrating the benefits DLT-based infrastructure offers. The UK RLN, led by UK Finance, involved 11 of the country’s largest banking and payments providers to create a regulated platform for public and private digital monies including CBDCs and tokenised deposits. With over 80 countries exploring CBDCs for both domestic and cross-border use cases and several in advanced stages, it’s likely more of these projects evolve into live solutions in 2025. However, uncertainty surrounding US Republican’s attitudes towards CBDCs may cause other G7 countries to put greater focus on domestic projects.

Rob Wing, head of digital assets and FX, 4OTC 

Over the past three years, we have seen more financial institutions move into digital assets trading. We expect this to continue during 2025, as investors continue to diversify their portfolios with a range of crypto assets, including Bitcoin and Ethereum. The recent US election and President Trump coming to power in January is already driving up prices in some of the more established crypto currencies.

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One of the key challenges for trading firms is connecting to all the exchanges. The market remains highly fragmented, with institutional traders typically connecting to between five and 25 exchanges globally to access market data and liquidity. As crypto trading becomes more institutionalised, firms are demanding robust, secure, and low latency infrastructure, supported by failover and full disaster recovery procedures. Like the FX market, the velocity of trading is increasing, as firms analyse increasing amounts of data and quantum computing applications enable algorithmic trading, supporting complex calculations at unprecedented speeds.

Jon Light, head of OTC trading platforms, Devexperts 

We expect to see much more activity from regulators in the crypto space in 2025. With the Markets in Crypto-Assets Regulation’s (MiCA) rules starting to apply in full on 30 December, other jurisdictions will have their eye on the EU, assessing the impact of the regulation on the crypto market and responding with their own versions. The US is expected to move closer to regulating the space, adopting a more friendly stance under the Trump administration. With the SEC chairman, Gary Gensler, preparing to exit in January, pro-crypto regulation is expected. Also, the UK is getting ready to release its regulatory framework for crypto in early 2025.

These moves towards regulating the crypto space will help mitigate risks for the wider financial stability. As cryptocurrencies become more interconnected with the traditional financial sector, the challenge will be to have regulatory, global coordination, which is needed, otherwise weaker jurisdictions can be exploited. This cross-border facilitation of regulation is needed for the cryptocurrency system to continue growing and be widely adopted by institutional investors.