Three big changes that could happen to cryptocurrencies in 2025

Thanks to the launch of new spots, 2024 is already a turning point year for the crypto industry Bitcoin (BTC 0.39%) January ETFs. For the first time in history, both retail and institutional investors can access Bitcoin directly in a quick, easy and regulatory-approved manner without having to enter the crypto market through a crypto trading intermediary. I did.

But 2025 could bring even bigger changes. Of course, much of that is due to the outcome of the 2024 presidential election, which introduced cryptocurrencies as an issue in a political election for the first time in history. Here, we rank the three major changes coming in order from most likely to least likely to occur.

More Crypto ETFs

New Spot Bitcoin ETF has exceeded all expectations, bringing in over $30 billion in investor capital. Yes, there was a brief tough phase in August when investor inflows seemed to dry up. But inflows are now back at a bullish pace, and these ETFs are being embraced by everyone from the smallest individual investors to the biggest billionaire hedge fund managers.

So it's almost a given that more crypto ETFs will be introduced in 2025. New spots coming in July Ethereum (Ethereum 0.70%) ETFs, and current expectations suggest that several other cryptocurrencies with large market caps could be next. The most likely prospect is Solana and XRPboth ranked in the top 10 largest cryptocurrencies.

Changes in how cryptocurrencies are regulated

Currently, the United States lacks a comprehensive regulatory framework for cryptocurrencies, but that could change by 2025. Both Republicans and Democrats agree that such a framework is needed, and political momentum appears to be building for an overhaul next year.

Currently, the system regulating cryptocurrencies is unclear and sometimes unfair. This is the point of virtual currency exchanges coinbase global (coin 7.84%) He has made this point many times while embroiled in a regulatory battle with the SEC. Remember: The current system for regulating cryptocurrencies is based on a 1946 Supreme Court case originally designed to resolve a dispute over Florida citrus groves. It's becoming increasingly difficult to understand how these ancient rules apply to modern business problems.

Therefore, in 2025, new laws could be introduced that clearly define not only who should regulate cryptocurrencies, but also how cryptocurrencies should be regulated. While the SEC is currently the primary regulator, the current thinking among crypto advocates is that the Commodity Futures Trading Commission (CFTC) should oversee it. At the very least, we would like to see someone with a more crypto-friendly stance replace SEC Commissioner Gary Gensler in 2025.

Bitcoin as a national strategic necessity

Bitcoin could become a new strategic necessity for the US government in 2025. There are already calls for greater government support for the Bitcoin mining industry, and some point out that the United States could be drawn into a Bitcoin “arms race.” China and Russia.

Image source: Getty Images.

Some politicians have even suggested that Bitcoin could be part of the solution to the $35 trillion national debt problem. The logic here is very simple. If the price of Bitcoin can rise faster than the national debt is growing, we may one day have a chance to pay off all of this debt. Admittedly, it's going to be a tough sledding game considering the U.S. debt is increasing by $1 trillion every 100 days. By the way, this is equivalent to the current market capitalization of Bitcoin.

As part of a potential solution, U.S. Sen. Cynthia Lummis (R-Wyo.) has already introduced legislation for a Strategic Bitcoin Reserve Fund, with the idea of ​​buying 1 million BTC over several years. are. Over time, some of that reserve could theoretically be used to pay off debt.

Indeed, the likelihood of these things happening is directly related to the electoral success of Donald Trump, who claims to be the first pro-Bitcoin president in history. He has already said he wants to make America the “crypto capital of the planet.” This may sound scary to some people. But for crypto investors, it could be a dream come true.

How to profit from changing cryptocurrencies

The big question facing investors in 2025 is how to position their portfolios to take advantage of these potential changes. Of course, the easiest solution is to load up on Bitcoin. Although much of the political and regulatory focus seems to be on Bitcoin, it still accounts for more than half of the total cryptocurrency market capitalization. Therefore, any changes to cryptocurrencies will affect Bitcoin first and foremost.

It is even more difficult to predict the real-world impact of new crypto legislation. Hints here may come from other countries that are enacting new crypto laws. For example, the European Union's Market in Cryptoassets (MiCA) regulation will be fully implemented in December. This will establish a comprehensive legal framework for the issuance, investment and trading of crypto assets across the EU.

For now, please focus on the 2024 presidential election. The results there could have a major impact on the cryptocurrency market for years to come. If there are large rallies after the election, we can be confident that big changes will occur in cryptocurrencies in 2025.