2025 Cryptocurrency Positive Factors Overview

Written by: Ashley Oerth, Invesco

Translated by: Blockchain in Plain Language

Invesco is a leading global independent investment management company, founded in 1935 and headquartered in the United States. As of 2024, Invesco manages assets exceeding $1.8 trillion, operates in over 20 countries worldwide, and has actively engaged in blockchain and cryptocurrency asset investments in recent years, focusing on exploring investment opportunities in Bitcoin and other cryptocurrencies.

This article is written by Ashley Oerth, Assistant Global Market Strategist at Invesco. In this article, Oerth discusses the strong performance of cryptocurrency assets in 2024 and believes that with an improved regulatory environment and more favorable policymakers, the cryptocurrency industry will continue to reach new heights in 2025.

The following is the main text:

We believe that the cryptocurrency industry will continue to reach new heights in 2025, primarily benefiting from the gradual clarification of regulatory policies and more favorable policymakers.

Positive developments following the U.S. presidential election, a shift in investor attitudes towards the cryptocurrency industry, and a supportive market backdrop may drive the performance of cryptocurrency assets. President Trump has expressed a desire to establish a strategic Bitcoin reserve and has appointed policymakers who support the cryptocurrency industry.

Cryptocurrency assets performed strongly in 2024. With the Republican Party winning in the House, Senate, and presidential elections, Bitcoin broke through the $100,000 mark, and as of January 31, 2025, the total market value of all cryptocurrency assets reached $3.5 trillion. U.S. large-cap stocks have risen 4.8% since the election, with Bitcoin up 47.6% and Ethereum up 37.4%. We expect this momentum to continue into 2025, as a series of positive news and legislative progress appear likely.

In our view, cryptocurrency assets are largely influenced by the macroeconomic environment and market sentiment, which can lead to significant price volatility. Currently, the market environment and sentiment are shifting towards a more favorable stance for cryptocurrency assets, including some positive developments following the U.S. elections, a more friendly attitude from investors towards the cryptocurrency industry, and an overall supportive backdrop due to central bank interest rate cuts and a return to normal growth in the global economy.

We have outlined the following five prominent factors indicating why cryptocurrency assets may continue to perform well in 2025.

Cryptocurrency-Friendly U.S. Policymakers Take Office

President Trump has indicated that he will continue to roll out a series of cryptocurrency-friendly policies, including a desire to establish a strategic Bitcoin reserve and appointing policymakers who support the cryptocurrency industry in key regulatory agencies such as the SEC and CFTC. However, support for cryptocurrency assets does not solely come from the President. According to a group supporting the cryptocurrency industry, a total of 294 bipartisan candidates supporting the cryptocurrency industry were elected to the U.S. Congress in the 2024 elections.

This may mean that Trump's policies will be vastly different from those of the Biden administration, which has traditionally held a hostile stance towards cryptocurrency assets. For example, the SEC, under Chairman Gary Gensler, has repeatedly sued cryptocurrency companies without clearly specifying the framework to follow, leading to criticism for adopting a "law enforcement over policy" approach. Biden himself has also opposed the cryptocurrency industry, despite bipartisan support for the Financial Innovation and Technology Act (FIT21), which he still opposes.

One key point of contention is SAB 121—an announcement issued by the SEC in 2022 requiring publicly traded institutions to strictly adhere to regulations when holding cryptocurrency assets for clients. SAB 121 requires these institutions to list cryptocurrency assets on their balance sheets, which not only triggers capital regulatory requirements but also prevents most banks from participating in the digital asset ecosystem. Because SAB 121 requires publicly traded institutions to include cryptocurrency 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 cryptocurrency asset ecosystem.

Due to the lack of effective custody solutions from banks, many cryptocurrency investors have had to turn to expensive and often unreliable alternatives. Now that SAB 121 has been repealed, it opens new avenues for more large institutions to provide custody services for cryptocurrency assets.

With the changing policies in the U.S. regarding cryptocurrency assets, we expect more investors to begin accepting cryptocurrency assets, which could drive the cryptocurrency market into a bull market. Since the November elections, interest from investors in U.S. Bitcoin CEX trading products (ETP: Exchange-Traded Product) has continued to rise.

Growth of total assets and fund inflow trends for U.S. Bitcoin ETP since its launch on January 11, 2024

Investing in Cryptocurrency Assets Becomes Easier

In 2024, the U.S. and Hong Kong launched spot Bitcoin products (ETFs), which, according to Bloomberg data, attracted a net inflow of $34.6 billion by the end of 2024. It is expected that by 2025, more countries may allow a broader range of investors to participate in spot ETF trading, and more cryptocurrency assets may also become easier to invest in through ETFs. According to the latest regulatory filings from the U.S. Securities and Exchange Commission (SEC) as of the end of January, several ETF plans have begun to invest in other cryptocurrency assets. With the launch of more investment products attracting more investors, we expect the prices of cryptocurrency assets to rise as a result.

Perception of Bitcoin is Changing

As Bitcoin's market capitalization continues to grow, investor attitudes towards this leading cryptocurrency are also changing. In January 2024, the U.S. launched widely accessible spot Bitcoin trading products (ETFs), marking an important milestone that provides investors in the world's largest capital market with a convenient way to easily invest in Bitcoin (and potentially Ethereum in the future). For example, as of January 11, 2024, U.S. investors had invested $40.6 billion in spot Bitcoin ETFs, and by the end of 2024, the total assets of this product reached $101.8 billion. In comparison, the managed assets of gold ETFs stood at $124.2 billion.

One year after the launch of Bitcoin ETFs, their asset scale is approaching that of U.S. gold ETFs.

Market Environment Appears More Favorable

Interest rate cuts in major economies such as the U.S., Eurozone, and the UK suggest that 2025 may become a "risk appetite year" for global markets. In fact, we are more optimistic about sectors with stronger cyclicality in the market for 2025, such as stocks and credit. As investors become more willing to take risks, cryptocurrency assets may receive support, as they are typically more influenced by the macroeconomic environment.

Tokenization is Gradually Advancing

Tokenization is the process of recording an asset or information in the form of tokens on a blockchain, bringing numerous benefits to asset management and exchange. We believe that the current financial system can achieve various potential advantages through tokenization, such as reducing counterparty risk, accelerating payment and settlement speeds, and enhancing the personalization of customer investment experiences.

In the past five years, pilot projects for central bank digital currencies and asset tokenization have gradually made progress, including tokenized money market funds, tokenized bonds, and tokenized private market products. The UK government plans to issue tokenized government bonds for the first time within the next two years. Meanwhile, in the Eurozone, the European Central Bank is preparing to launch a digital euro, which is expected to further promote the development of tokenization applications. As this technology becomes more widespread, we expect cryptocurrency assets to benefit from it as well.

Conclusion: 2025 is a Year to Watch

Cryptocurrency assets are a highly volatile investment that can fluctuate significantly due to news events. Overall, we believe that the cryptocurrency market will continue to reach new heights in 2025, primarily due to increased regulatory transparency and more favorable policies, which bring positive news for digital assets (e.g., price fluctuations in the cryptocurrency market following Trump's election, news of Trump's nomination of the SEC chairman, and the U.S. approval of spot Bitcoin and Ethereum ETFs). We also expect that interest rate cuts in many major economies may stimulate demand for risk assets.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。