Ten events that transformed digital finance in 2025 – the year cryptocurrency became foundational.

This year commenced with Bitcoin (BTC) supporters anticipating a straightforward rally, fueled by halving narratives, spot ETF momentum, and a Fed pivot all aligning in their favor.

However, the year concluded with BTC remaining 30% below its October high, North Korean hackers absconding with $2 billion, and the US government discreetly constructing a digital Fort Knox from confiscated coins.

In the interim, crypto transitioned from a speculative sideshow to functioning as contested infrastructure: banks established stablecoin subsidiaries, Ethereum implemented two hard forks that halved rollup fees, and Congress enacted the first federal stablecoin legislation.

Moreover, regulators in Brussels, Hong Kong, and Canberra finalized frameworks that shifted the question from “is this legal?” to “here’s your license application.”

What distinguished 2025 was not the pace of adoption or price fluctuations, but rather the solidification of the category itself.

States recognized Bitcoin as a reserve asset, institutions integrated it into retirement portfolios via standardized ETFs, and stablecoins along with tokenized Treasuries emerged as settlement mechanisms, handling volumes comparable to those of card networks.

The discourse evolved from whether crypto would endure to who governs its chokepoints, who oversees its liquidity, and whether the infrastructure layer can expand more rapidly than the industrial-scale crime and casino mechanics draining capital and credibility at the periphery.

Reserve assets and federal charters

On March 6, President Donald Trump enacted an executive order to create a US Strategic Bitcoin Reserve.

This reserve comprised seized Bitcoin, including approximately 200,000 BTC taken from Silk Road, along with proceeds from other enforcement actions. The order also directed agencies to retain Bitcoin instead of auctioning it.

The order positioned Bitcoin as a strategic asset and authorized the exploration of budget-neutral accumulation methods. For the first time, a significant government committed to maintaining a substantial Bitcoin stockpile as a clear policy rather than through bureaucratic inertia.

The reserve was significant not because it altered the supply-demand dynamic, as 200,000 BTC accounts for nearly 1% of total supply, but because it redefined Bitcoin’s connection to state authority.

Prior government sales had reinforced the notion that seized crypto is contraband to be liquidated. Classifying it as a reserve asset provided political cover for other governments to follow suit and eliminated a persistent source of selling pressure from the market calendar.

More fundamentally, it transformed Bitcoin from “something we tolerate” into “something we accumulate,” which alters the nature of every subsequent regulatory discussion.

A few months later, Congress passed the Guiding and Establishing National Innovation for US Stablecoins Act, creating the nation’s first comprehensive federal framework for dollar-backed stablecoins.

The GENIUS Act, signed into law in July by Trump, permits insured banks to issue “payment stablecoins” through subsidiaries and establishes a parallel licensing pathway for certain nonbanks, with the FDIC proposing a rule in December detailing the application process.

This legislation transitioned stablecoins from an enforcement-driven gray area, where issuers faced sporadic state money-transmitter actions and ambiguous SEC guidance, into a chartered product category with implications for deposit insurance, capital requirements, and federal oversight.

GENIUS redefined the stablecoin market’s center of gravity. Banks that previously shunned the sector could now introduce products under familiar prudential regulations.

Nonbank issuers that had become dominant without federal charters, such as Circle and Tether, faced a new dilemma: pursue a license and accept stricter disclosure and reserve audits, or remain unchartered and risk losing banking partners as depositary institutions favor federally compliant counterparts.

The law also established a framework that foreign regulators and competing US agencies will either adopt or resist, making it a reference point for future stablecoin discussions.

MiCA, Hong Kong, and the compliance wave

Europe’s Markets in Crypto-Assets (MiCA) regulation will be fully implemented in 2025, introducing EU-wide licensing, capital, and conduct rules for crypto-asset service providers and “significant” stablecoins.

MiCA compelled issuers to reevaluate euro-stablecoin models, with several withdrawing products rather than adhering to reserve and redemption requirements, and pushed exchanges to choose between full licensing or exiting the bloc.

Hong Kong progressed its own virtual-asset and stablecoin frameworks, including a licensing ordinance and an expanding spot crypto ETF market aimed at Asia-Pacific capital.

Australia, the UK, and other jurisdictions advanced exchange and product regulations, transforming 2025 into a year where comprehensive national and regional frameworks supplanted fragmented guidance.

These regimes were significant as they concluded the “is this legal at all?” phase. Once licensing, capital, and disclosure rules are established, large institutions can launch products, smaller players are compelled to comply or exit, and regulatory arbitrage becomes a deliberate business strategy rather than a byproduct of jurisdictional maneuvering.

The shift also concentrated market structure: exchanges and custodians capable of affording multi-jurisdiction licensing developed defensible advantages, while smaller platforms either sold themselves or retreated to more permissive environments.

By the end of the year, the competitive landscape of the industry resembled less of a free-for-all and more of a tiered banking system, with chartered entities, licensed near-banks, and an offshore fringe.

ETF plumbing and the mainstreaming of exposure

The SEC dedicated 2025 to transforming one-off crypto ETF approvals into a systematic process.
It permitted in-kind creations and redemptions for spot Bitcoin and Ethereum ETFs, eliminating the tax burden and tracking error that plagued earlier cash-create structures.

More importantly, the agency adopted generic listing standards, allowing exchanges to list certain crypto ETFs without bespoke no-action letters or exemptive orders for each product.

Analysts anticipate over 100 new crypto-linked ETFs and ETNs in 2026, encompassing altcoins, basket strategies, covered-call income products, and leveraged exposures.

BlackRock’s IBIT quickly became one of the world’s largest ETFs by assets under management shortly after its launch, attracting tens of billions from wealth managers, registered investment advisors, and target-date funds.

Furthermore, IBIT ranks as the sixth-largest ETF by year-to-date net inflows as of Dec. 19, according to Bloomberg senior ETF analyst Eric Balchunas.

The ETF surge was significant not merely for adding marginal demand, although it did, but because it standardized how crypto exposures integrate into the mutual fund distribution framework.

In-kind creations, fee compression, and generic listing rules transformed Bitcoin and Ethereum into foundational elements for model portfolios and structured products, which is how trillions of retirement and institutional capital are effectively deployed.

Once an asset class can be segmented, packaged, and embedded in multi-asset strategies without regulatory friction, it ceases to be exotic and evolves into infrastructure.

And 2025 is already yielding results, as Bitcoin ETFs recorded $22 billion in net inflows, and Ethereum ETFs noted $6.2 billion as of Dec. 23, according to Farside Investors data.

Stablecoins and tokenized bills become settlement rails

Stablecoin supply exceeded $309 billion in 2025, prompting warnings from the Bank for International Settlements regarding its increasing role in dollar funding and payments.

Simultaneously, tokenized US Treasuries and money market funds, represented by products like BlackRock’s BUIDL and various on-chain T-bill tokens, increased their combined on-chain value to approximately $9 billion, establishing “tokenized cash and bills” as one of DeFi‘s fastest-growing segments.

Research from a16z indicated that stablecoin and real-world asset transfer volumes rival or exceed those of some card networks, solidifying these instruments as genuine settlement rails rather than mere DeFi curiosities.

This transition was significant as it connected crypto directly to dollar funding markets and Treasury yields.
Stablecoins became the “cash” component of on-chain finance, while tokenized bills emerged as yield-bearing base collateral, providing DeFi with a foundation beyond volatile native tokens.

It also raised systemic questions that regulators are just beginning to address: if stablecoins are dollar-funding instruments facilitating hundreds of billions of dollars daily, who oversees those transactions when they circumvent traditional payment networks?

How concentrated is the risk among a few issuers, and what occurs if one loses its banking relationships or experiences a run?

The success of these instruments rendered them too significant to overlook and too large to remain unsupervised, which is why GENIUS and similar frameworks were introduced at this time.

Circle’s IPO and the return of public crypto equity

Circle’s significant debut on the New York Stock Exchange, raising approximately $1 billion, highlighted 2025’s crypto IPO wave.

Hong Kong’s HashKey listing and a pipeline of exchanges, miners, and infrastructure firms filing or indicating intent contributed to the year’s atmosphere of a “second wave” of public crypto companies following the post-2021 drought.

These offerings served as a gauge of public-market interest in the sector after the scandals of the FTX era and ongoing concerns regarding the sustainability of its business model.

The IPOs were important as they reopened the public equity market for crypto firms and established valuation benchmarks that reverberate through private funding rounds.

They also necessitated detailed financial disclosures regarding revenue sources, customer concentration, regulatory exposure, and cash burn, a level of transparency that private firms could evade.

This disclosure influences future mergers and acquisitions, competitive positioning, and regulatory rulemaking: once Circle’s financials are public, regulators and competitors gain insight into the profitability of stablecoin issuance, which informs discussions about capital requirements, reserve yields, and whether the business model warrants banking-style oversight.

Bitcoin stalls out

Bitcoin surged to a new all-time high just above $126,000 in early October, propelled by a Fed pivot toward rate reductions and the onset of a US government shutdown.

What seemed like the start of a rally supported by the debasement trade narrative, BTC stalled and spent the final quarter hovering approximately 25% to 35% below that peak, consolidating within a narrow range around $90,000.

The stall was significant as it demonstrated that narrative, flows, and dovish monetary policy are insufficient when liquidity is sparse, positioning is congested, and the medium-term macro environment is uncertain.

Derivatives markets, basis trades, and institutional risk limits now dictate much of Bitcoin’s price movements, rather than solely retail “number go up” momentum.

The year underscored that structural demand, whether from ETFs, corporate treasuries, or state reserves, does not guarantee linear appreciation. It lowered expectations for easy post-halving rallies and highlighted how much of the market has become professionalized into hedged, leveraged, and arbitrage-driven positioning rather than pure directional bets.

Ethereum’s double upgrade

On May 7, Ethereum executed the Pectra hard fork, merging the Prague execution-layer and Electra consensus-layer upgrades, to introduce account abstraction enhancements, staking modifications, and increased data throughput for rollups.

In December, the Fusaka upgrade elevated the effective gas limit, incorporated PeerDAS data-sampling, and further expanded blob capacity, with analysts forecasting up to 60% fee reductions for major layer-2.

Together, the two forks represented a tangible advancement toward Ethereum’s rollup-centric roadmap, with direct implications for DeFi user experience, staking structure, and layer-2 economics.

The upgrades were significant as they transformed Ethereum’s long-discussed scaling strategies into measurable enhancements in fees and throughput.

More affordable, higher-capacity rollups make it feasible to conduct payments, trading, and gaming applications within Ethereum’s ecosystem rather than on alternative layer-1 blockchains.

They also begin to redefine how value accrues: if most activity shifts to rollups, does ETH capture that value through base-layer fees, or do layer-2 tokens and sequencers claim the majority?

The forks did not resolve that debate, but they transitioned it from theory to practical economics, which is why layer-2 tokens experienced rallies, and base-layer MEV dynamics evolved throughout the year.

Memecoin industrial complex and its backlash

Memecoins evolved from a sideshow to an industrialized phenomenon in 2025. A Blockwords dashboard indicates that users minted nearly 9.4 million memecoins on Pump.fun alone in 2025, bringing the total to over 14.7 million tokens launched since January 2024.

Celebrity and political tokens surged, and a class-action lawsuit accused Pump.fun of facilitating an “evolution of Ponzi and pump-and-dump schemes.”

Sentiment in certain parts of the industry turned overtly antagonistic toward the memecoin trade, viewing it as both a reputational risk and a significant capital drain.

The boom was significant as it illustrated crypto’s ability to generate casino-like markets at an industrial scale, siphoning billions of dollars and developer focus from more “productive” applications.

The backlash, lawsuits, and policy discussions it incited will influence how regulators approach launch platforms, user protection, and “fair launches,” and how serious projects distance themselves from pure extraction.

It also revealed a structural tension: permissionless platforms cannot easily regulate what is built on them without compromising their core value proposition, yet allowing anything to launch exposes them to legal liability and regulatory crackdowns that threaten the entire ecosystem.

Record hacks and the industrialization of crypto crime

Chainalysis data revealed that North Korean-linked groups stole a record $2 billion in crypto in 2025, including a single heist valued at approximately $1.5 billion, accounting for roughly 60% of all reported crypto thefts for the year.

Additionally, these North Korean groups have stolen a cumulative total of $6.75 billion since tracking began.

Simultaneously, Elliptic’s research highlighted how Chinese-language scam ecosystems on Telegram, primarily fueled by Tether, have evolved into the largest illicit online marketplaces ever, facilitating tens of billions of dollars associated with pig-butchering scams and other fraud.

The crime wave was significant as it reframed crypto theft and fraud as structurally embedded, industrial-scale issues rather than isolated exchange hacks.

North Korean operations are identified as a persistent national security threat, financing weapons programs through sophisticated social engineering and protocol exploits.

Stablecoin-based scam networks operate akin to Fortune 500 companies, complete with call centers, training manuals, and technology stacks optimized for financial extraction.

This scale is already prompting stricter know-your-customer regulations, chain surveillance, wallet blocklists, and bank de-risking.

It also provides regulators with leverage to demand stricter controls on stablecoin issuers, mixers, and permissionless protocols, which will shape the next generation of compliance infrastructure and the definitions of what constitutes “sufficiently decentralized.”

What 2025 settled and what it left open

Collectively, these ten narratives transitioned crypto from a retail-driven, loosely regulated trade into something resembling contested financial infrastructure.

States and banks are asserting control over key layers, such as reserve policy, stablecoin issuance, custody, and exchange licensing. Regulations are solidifying across major jurisdictions, concentrating market structure and increasing entry costs.

Simultaneously, both crime and casino dynamics are scaling alongside the “serious” use cases, creating a reputational and regulatory burden that will take years to address.

The year definitively settled a few matters. Bitcoin is now recognized as a reserve asset, not contraband. Stablecoins are classified as chartered products, not regulatory orphans. Ethereum’s scaling roadmap is now live code, not vaporware. ETFs serve as the distribution mechanism for institutional exposure, not a regulatory edge case.

What 2025 left unresolved is more complex and consequential: who oversees stablecoin liquidity when it rivals card networks? How much of crypto’s value accrues to base layers versus rollups, custodians, and service providers?

Can permissionless platforms endure if they cannot regulate industrial-scale fraud without compromising their foundational principles? And can the infrastructure layer expand more rapidly than the crime and extraction undermining its legitimacy?

The answers will determine whether crypto in 2030 resembles the early internet, with open rails that gravitate toward centralized platforms, or something more unusual: a stack where states, banks, and protocols vie for control of the same liquidity, with users and capital gravitating toward whoever offers the least friction and the most legal certainty.

What is certain is that 2025 dispelled the illusion that crypto could remain permissionless, unregulated, and systemically significant simultaneously. The only question now is which of those three will yield first.

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