Author: Mark Greenberg, Kraken’s Head of Global Consumer Business
Looking ahead to 2025, cryptocurrencies are playing an increasingly important role in shaping the evolving financial landscape. From their gradual inclusion in diversified investment portfolios to the development of blockchain-driven financial services, cryptocurrencies continue to have profound impacts on traditional finance.
This year, with the continuous growth of trust, accessibility, and innovation, cryptocurrencies will achieve deeper integration into mainstream financial strategies. Here are the six trends I am most focused on for the upcoming year of 2025:
1. Cryptocurrencies becoming essential components of ideal investment portfolios
The historic asymmetric return characteristics of cryptocurrencies make it increasingly difficult for investors to justify not including them in their portfolios. In 2025, strategies like Dollar-Cost Averaging (DCA) will continue to gain favor, allowing investors to start with small investments and steadily increase their holdings. I anticipate that methods promoting gradual familiarity with this asset class will accelerate in the new year.
2. Cryptocurrency platforms focusing on providing customers with medium to long-term wealth accumulation strategies, with trust as the key differentiator
In 2025, trading platforms and cryptocurrency exchanges will shift their product strategies to offer customers solutions for medium to long-term wealth accumulation. The foundation of these services will involve earning yields through stablecoin holdings, with additional layers of more complex products and services built on top. In light of the lessons learned from the collapses of FTX, Celsius, and Voyager in the previous cycle, customers will place greater emphasis on platform trustworthiness, security, and longevity when choosing how to access these opportunities.
3. Stablecoin market to face the first real challenge to existing giants, with users as the primary beneficiaries
The stablecoin market has long been dominated by Tether and USDC, which is no secret. In 2025, these two major players will face genuine competition for the first time as a new generation of stablecoins launches, challenging the existing two leaders with advantages in regulation and region. This competition will benefit users, providing them with more tools to manage digital fiat currencies, and the adoption of alternatives to Tether will also help mitigate counterparty risks for stablecoin issuers.
4. Bitcoin to gain more mainstream attention during inflation rebounds
Some analysts predict that inflation may persist above the Federal Reserve’s 2% target in the long term. Over the past few years, everyone in Western countries has experienced firsthand the continuous depreciation of fiat currency values, a situation not seen since the 1970s. Bitcoin’s fixed supply – a feature even gold cannot provide – may drive more mainstream acceptance of its value proposition against inflation. This will encourage more people to adopt Bitcoin as a store of value asset to protect wealth amidst fiat devaluation.
5. Decreased volatility in the cryptocurrency market
Over the past decade, the overall volatility of cryptocurrencies has been on a downward trend. This is due to increased adoption bringing more liquidity, making the market less susceptible to drastic price fluctuations. With ETFs enabling more investors to access cryptocurrencies, we expect the volatility of the crypto market to continue decreasing. This may make cryptocurrencies more attractive to investors with higher risk tolerance (and support strategies like Dollar-Cost Averaging).
6. Next-generation banking services based on cryptocurrencies moving towards the mainstream
We are already seeing new investment products – such as money market funds – being launched on various blockchains. Traditional financial institutions have recognized and are leveraging the efficiency gains brought about by this technology and its ability to open up new markets for products. In 2025, I expect to see more familiar financial products built on blockchain and introduced to the market – including payments, savings accounts, high-yield savings accounts, credit cards, and lending.
7. Summary: 2025 – Cryptocurrencies stepping onto the main stage
In 2025, the maturity of the cryptocurrency market will bring investors and institutions a new era of opportunities and stability. Whether it’s Bitcoin becoming widely adopted as a store of value, the emergence of competitive stablecoins, or platforms prioritizing the development of long-term wealth accumulation strategies, the influence of cryptocurrencies will further expand into the financial world. With trust and accessibility at its core, this year will mark a turning point for cryptocurrencies to solidify their position as a crucial pillar in the modern financial ecosystem.
