6 crypto developments in 2025 that will keep fuelling bitcoin’s rally
Bitcoin’s (BTC-USD) surge to a new all-time high of over $109,000 (£88,500) on 20 January, coinciding with the inauguration of US president Donald Trump, and its 162% price increase over the past year, signals growing mainstream interest in cryptocurrencies.
A recent Deutsche Bank report suggests this momentum is set to continue into 2025, driven by a confluence of factors — a potentially more favourable regulatory landscape, growing institutional investment, and continued technological innovation.
Within this growing adoption and evolving regulatory context, several key developments are poised to drive innovation and growth in the crypto space.
The report highlighted Lightchain AI, a project slated for a February 2025 launch that aims to revolutionise decentralised computing by integrating artificial intelligence with blockchain technology.
This innovative approach promises to unlock new possibilities within the cryptocurrency market by leveraging AI for enhanced decision-making, automation, and predictive analysis within a secure blockchain environment.
This could improve efficiency, security, and scalability across various applications, including AI-powered risk assessment and automated trading in DeFi, AI-driven optimisation in supply chain management, and the development of entirely new AI-powered decentralised applications (dApps). If successful, Lightchain AI could become a cornerstone of next-generation blockchain technology.
The Ethereum ETH-USD) Pectra upgrade, expected in March 2025, is designed to enhance user experience through account abstraction, simplifying user interaction by allowing for more user-friendly interfaces. It could also potentially enable transaction fee payments with various tokens other than ether, such as stablecoins.
This increased flexibility could lower the barrier to entry for new users.
Additionally, Pectra will increase the maximum staking amount for validators, encouraging greater participation in Ethereum’s proof-of-stake (PoS) consensus mechanism and enhancing network security and decentralisation.
The early weeks of 2025 will provide greater clarity on the likelihood of a US Strategic Bitcoin Reserve (SBR), a concept championed by Trump during his presidential campaign.
Investors are focused on whether an executive order by the Trump administration will establish the SBR, involving the US government acquiring and holding bitcoin as a strategic asset, similar to gold. While campaign rhetoric was favorable, actual implementation remains to be seen.
The UK Crypto Roadmap, unfolding throughout 2025, was cited as an important development in the Deutsche Bank report. The initiative marks a crucial step toward a more regulated cryptocurrency market in the UK.
The Financial Conduct Authority (FCA) is set to unveil its comprehensive plan for crypto-asset regulation, covering areas like stablecoins, custody, governance, and market abuse.
This phased approach, culminating in a new regulatory regime in 2026, aims to establish a robust framework for crypto businesses, enhancing consumer protection, mitigating risks, and fostering a more stable crypto ecosystem.
With a Republican majority in both the White House and Congress, the report said that the US could be poised to make significant strides in stablecoin legislation in mid-to-late 2025.
This regulatory framework is expected to bring clarity and oversight to the stablecoin market, establishing clear rules for issuers, reserves, and consumer protections. This could enhance market confidence, mitigate systemic risks, and encourage responsible growth within the stablecoin sector.
The report noted that the UK is expected to launch a pilot program for its digital pound (CBDC) in late 2025.
Following the establishment of a “dedicated digital pound lab,” the government is actively exploring the feasibility and potential benefits of a CBDC. This pilot will test various aspects of a digital pound, including its technical infrastructure, user experience, and potential impact on the financial system, potentially paving the way for wider adoption.
A key driver of this anticipated growth is the evolving regulatory environment. In the United States, the Trump administration’s appointment of deregulation advocate Paul Atkins as Securities and Exchange Commission (SEC) chair signals a potential shift toward a more innovation-friendly approach.
This follows the passage of the Financial Innovation and Technology Act (FIT21) in May 2024, which provided more clarity on cryptocurrency classifications, tax exemptions for small transactions, and a framework for tokenised assets.
Analyst Marion Laboure said in the Deutsche Bank report: “Trump’s support for crypto means the market’s current bull run should continue, and ongoing presidential backing is key for the ‘continuation of crypto’s golden era.'”
Elsewhere, the EU’s Markets in Crypto-Assets (MiCA) regulation, implemented in 2024, has enhanced legitimacy and security within the European crypto market, covering a wide range of crypto activities.
