"Innovation Starts Now"... Will the Virtual Asset 'Tailwind' Continue in 2025? [Blockchain Web 3.0 Report]

2025 Virtual Asset Industry and Market Outlook

Competition for Bitcoin Holdings Among Nations Begins

Acceleration of Global Virtual Asset Regulatory Innovation

Focus on 'Stablecoins' and 'Real World Asset Tokenization'

Major Altcoins Expected to Enter the Institutional Framework

Image=Shutterstock

In 2024, the virtual asset (cryptocurrency) market achieved tremendous growth with various issues such as the U.S. Securities and Exchange Commission (SEC) approving a Bitcoin (BTC) spot Exchange-Traded Fund (ETF), the fourth Bitcoin halving, and Donald Trump's election as the 47th President of the United States with pro-virtual asset pledges.

Today, we will take a closer look at the changes the virtual asset industry will face in the upcoming 2025 and the market outlook from experts.

Competition for Bitcoin Holdings Among Nations Begins

With Donald Trump, who emphasized making the U.S. a Bitcoin hub, elected as the 47th U.S. President, the international status of Bitcoin and other virtual assets is expected to rise even further.

The virtual asset industry has suffered under the Biden administration's regulation-centric policies. The U.S. Securities and Exchange Commission filed lawsuits against global exchanges like Coinbase and Binance for supporting the trading of dozens of 'unregistered securities,' and pressured Ethereum (ETH) related projects like Uniswap (UNI) through securities investigations into Ethereum staking.

However, with Trump's victory in the U.S. presidential election, the tide has turned. Trump won the industry's favor by proposing pro-virtual asset pledges, such as planning to stockpile Bitcoin as a national strategic reserve asset.

Trump and the Republican Party's plans are well reflected in the 'Bitcoin Act 2024' proposed by Republican Senator Cynthia Lummis (Wyoming). The bill includes specific plans for strategic Bitcoin reserve accumulation, such as establishing a long-term Bitcoin stockpiling strategy, accumulating 1 million BTC within 5 years, holding for at least 20 years, and introducing a Proof of Reserve system for transparency and fairness. Senator Lummis also expressed her determination on her X (formerly Twitter), stating, "The U.S. must now win the Bitcoin acquisition race."

Korbit Research Center, in its '2025 Virtual Asset Market Outlook' report, predicted that "with Senator Cynthia Lummis's proposal of the Bitcoin strategic reserve asset bill, a Bitcoin holding competition among governments, similar to the Space Race between the U.S. and the Soviet Union during the Cold War, could occur."

Acceleration of Global Virtual Asset Regulatory Innovation

There is an expectation that the global virtual asset regulatory environment will change positively. The clarity of the European Union's comprehensive virtual asset regulation 'MiCA' (Markets in Crypto-Assets Regulation) and the Trump administration's pro-virtual asset regulations could accelerate global virtual asset regulatory innovation, including in Asia.

On June 30, the European Union's MiCA, which was partially implemented for certain items, was fully enacted on December 30. MiCA specifies comprehensive standards for the industry, including virtual asset service provider licensing requirements, stablecoins and collateral, anti-money laundering (AML) and counter-terrorism financing (CTF), consumer protection, and virtual asset supervision and enforcement.

The European Union has been gradually promoting the discussion and implementation of the MiCA bill since 2022. Virtual asset companies can now prepare for national regulatory frameworks and establish clear growth roadmaps based on this regulation.

With the European Union, one of the major global economic zones, proactively introducing clear comprehensive virtual asset regulations, major countries such as the U.S., Asia, and Latin America are responding swiftly to avoid losing industry leadership.

Virtual asset-related bills promoted and adopted in various countries △El Salvador, adoption of Bitcoin as legal tender in 2021 △Central African Republic, Bitcoin legalization bill (repealed in 2023) △Bhutan, hydroelectric Bitcoin mining as part of national wealth strategy △U.S., Bitcoin strategic reserve bill (BITCOIN ACT 2024) △Brazil, strategic sovereign Bitcoin reserve (RESBIT) submitted to the House / Image=Presto Research

The most prominent country is undoubtedly the U.S. As mentioned earlier, discussions on various industry promotion measures, such as the Bitcoin strategic reserve bill, are ongoing, and Gary Gensler, the U.S. Securities and Exchange Commission chairman, who was criticized for excessive regulation, announced his resignation, and Paul Atkins, who emphasized clear regulation, was nominated as his successor.

Additionally, changes in the U.S. Congress should be noted. In the elections held last November, a 'Red Sweep' occurred, with the Republican Party taking control of both the White House and both houses of Congress. This has laid the foundation for the realization of Trump's virtual asset-related pledges.

Coinbase, a global virtual asset exchange, expressed optimism in its '2025 Crypto Market Outlook' report, stating, "The current U.S. Congress is more crypto-friendly than any previous Congress," and "Finally, the opportunity has come for the U.S. to establish regulatory clarity for the virtual asset industry."

Number of crypto-friendly lawmakers in the U.S. Congress / Image=Coinbase Research

Focus on Stablecoins and Real World Asset Tokenization

Many virtual asset industry experts predict that from 2025, the convergence of virtual assets and traditional finance will accelerate based on fiat 'stablecoins' and 'real world asset tokenization' (RWA).

Stablecoins also showed exponential growth in 2024. The market capitalization increased by about 48% over 11 months until November 2024, reaching $193 billion, and the trading volume increased more than threefold year-on-year, reaching $27.1 trillion. Through faster and cheaper blockchain-based transactions and payment services than traditional finance, stablecoins are expanding their adoption range.

There is also a forecast that the real world asset tokenization field will grow based on the payment infrastructure of stablecoins. The market size of tokenized assets was around $8.4 billion at the end of 2023 but grew by over 60% to $14 billion by the end of 2024.

Trend of tokenized asset market size / Image=Coinbase Research

Utilizing tokenized assets can simplify the operational processes of various products such as government bonds, funds, and corporate bonds, and support immediate blockchain-based payments and 24-hour trading, leading traditional financial companies like BlackRock to actively engage in research and development of tokenized assets.

Coinbase stated, "The tokenized asset field is expanding beyond U.S. Treasuries, money market funds (MMFs), and derivatives to private credit products, corporate bonds, real estate, insurance, and more," and "Although it may take time, gradual and continuous development will occur due to clear advantages such as immediate settlement, reduced transaction costs, and simplified operations."

Major Altcoins Expected to Enter the Institutional Framework

Following Bitcoin (BTC) and Ethereum (ETH), which entered the traditional financial market through spot Exchange-Traded Fund (ETF) products, major altcoins like Ripple and Solana (SOL) are also expected to enter the institutional framework.

The Bitcoin and Ethereum spot ETF products approved by the U.S. SEC recorded significant capital inflows, leading the growth of the virtual asset market last year. In 2025, if the pro-virtual asset stance of the Trump 2nd administration proves sustainable, the institutional inclusion of major altcoins could accelerate the expansion of the virtual asset market.

Already, Solana and Ripple's ETF products have completed application submissions, and approvals for virtual asset index ETFs, including major altcoins alongside Bitcoin and Ethereum, could be realized.

Status of altcoin and crypto index ETF applications / Image=Korbit Research Center

Korbit Research Center stated, "During the Biden administration, the possibility of approving spot ETFs for altcoins without CME futures ETFs was low, but if these criteria are relaxed under the Trump administration, we can expect the approval of spot ETFs for assets issued as spot ETFs in other countries or launched as Grayscale products."

In 2025, the virtual asset industry is expected to undergo significant changes like this. Do you think the virtual asset market can continue the wind of innovation and revival in 2025, following 2024?

# The internet has evolved continuously for over 30 years since its popularization in the 1990s. From Web 1.0, where only limited information access was possible, to the platform-centric Web 2.0 era where the public directly creates and shares information, we are now living in the Web 3.0 era, where everyone can become an operational entity using blockchain technology-based decentralized protocols.

The 'Blockchain Web 3.0 Report' aims to deliver accurate and in-depth information about the blockchain market and the transition to Web 3.0 to our readers.

Youngmin Lee, Bloomingbit Reporter 20min@bloomingbit.io