Cryptocurrencies are ending the year 2024 on a high note. Below I’m sharing my top predictions for 2025 – focusing on crypto products, institutional adoption and technology.

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Increasing Institutional Adoption

Banks offering physical crypto assets to their clients will become the norm. 63% of Swiss banks are planning to offer crypto services, and more and more this number will increase in other countries as well. This is based on the Blockchain Pulse Survey 2024, which I co-authored with University of St. Gallen, Centre for Financial Services Innovation, mintminds and vision&. Initially this is happening in MENA and APAC, but the expected regulatory changes under the Trump administration should also lead to more and larger banks adopting crypto products in the US.

Asset managers globally will do more with crypto assets, driven by Blackrock’s success with IBIT. Their roughly $40bn in AuM will generate $100mn in annual fees (with BTC at $100k)! Many also took note of Blackrock’s BUIDL token, which is essentially a tokenized real-world asset (RWA). RWA tokenization will also be a growth area to watch.

Stablecoins Made It

Stablecoins have made it, they are the first real product market fit for crypto. There’s only one way to go: bigger, better, faster. A few points:

• The biggest use case for stablecoins today is not traditional (international) payments, but moving assets quickly between exchanges (or liquidity venues and yield protocols, more generally)
• Europe’s stablecoin regulation will both slow down stablecoin adoption in the EU and also favor those players, like Circle, that play a fully regulated game
• USD stables currently have a 99% share. This will change as crypto adoption grows in other regions, but it may not happen immediately in 2025

Many smart folks are building new banks entirely on stablecoin rails. Some of them could become quite large in 2025. Some existing crypto-forward banks are putting more emphasis on stablecoins as well. It’s going to be interesting to watch!

Crosschain will become easier

Crosschain liquidity is a critical challenge in the evolving crypto ecosystem, especially with the rise of layer-2 networks and alternative layer-1 blockchains. Moving large amounts of assets between blockchains is almost worse than moving fiat in the international banking system, and could easily be more risky. This is because most crosschain swaps are done through bridges, and bridges tend to get hacked for (hundreds of) millions of dollars.

Crosschain intents are about to change that. With crosschain intents, user Alice in Ethereum can signal her intent to send wBTC to user Bob on Solana, and “the system” will take care of it in a trustless way. The system in this context is a combination of a messaging protocol (e.g. ERC 7683) implemented in smart contracts, and liquidity providers holding enough inventory to (in our example) pay Bob his USDC on Solana at the same time that Alice’s USDC transaction is only just being confirmed on Ethereum.

Crosschain intents will enable a great user experience in DeFi wallets that will look as magical as when people were finally able to send electronic mail from one university’s system to another, back when the Internet was still young.

The Black Swan will (hopefully) have to wait

The amount of fraud, stupidity and speculation in crypto is at least as great as in financial services in general. I can’t not mention that sooner or later, things are going to blow up. However, the nature of the black swan is such that it’s difficult to predict the next one, so it might just as well be another collapsing Ponzi scheme that starts the next bear cycle.

Clearly, with today’s knowledge, the hope that people have in Microstrategy’s (MSTR) bitcoin treasury is not sustainable. Something that’s called “Infinite Money Glitch” cannot, in fact, be infinite. To be clear: I do think it makes perfect rational sense to include bitcoin in a company’s treasury strategy! Just make sure you buy physical bitcoin, or solid bitcoin ETFs if you have to, instead of highly leveraged and speculative stocks.

Runner-Ups: AI x Crypto, Appchains and Bitcoin Yield

AI x Crypto will be the next big unlock after Cloud and Mobile, I’m sure we can all agree on that. What I’m less sure about is the timing. 2025 will probably see a local bubble among crypto natives who enjoy dabbling with AI agents, exploring new business models, and playing in the AI x Crypto meme token casino. As usual in these situations I focus on the technology, and the AI x Crypto technology is not yet ready for primetime.

Appchains such as base, Unichain or Soneium allow companies to better tailor the infrastructure (blockchain) to their application needs, while still connecting to the public blockchain ecosystems. Just as public and private clouds converged into hybrid clouds 10+ years ago, public and private blockchains are now converging into appchains. This cannot be successful without crosschain liquidity protocols, as discussed above. Crypto-forward companies will clarify their approach and start executing in 2025.

The Bitcoin community is torn between scalability and ossification. How do you make bitcoin usable and accessible to billions of people without compromising on security and the ideal of self-custody for all? Ossifying (slowing down) the development of the bitcoin protocol reduces the likelihood of unforeseen changes and security issues. But changes like OP_CAT or Drivechain are needed to make bitcoin more universally usable. 2025 is unlikely to see a resolution of this strategic conflict. In the meantime, builders like Babylon Labs and Core DAO are working around these issues and have attracted billions of dollars of TVL to their protocols, clearly demonstrating the market need for BTC-denominated yield. Despite this influx, bitcoin yield protocols are still very young and not as proven as they need to be to be entrusted with very large amounts of value. Be careful out there – the safest way to increase your wealth with bitcoin is still by keeping it in cold storage custody: HODL.

Make 2025 Great Again

I look forward to reconnecting with my friends, partners and clients in 2025. Let’s make 2025 great again!