Translated by: Plain Language Blockchain

Invesco (Invesco Group) is a world-leading independent investment management company founded in 1935 and headquartered in the United States. Invesco's assets managed by more than US$1.8 trillion (as of 2024), with more than 20 businesses around the world. In recent years, it has actively invested in blockchain and crypto assets, committed to exploring investment opportunities in Bitcoin and other crypto assets.

This article was written by Ashley Oerth, Assistant Global Market Strategist at Invesco, where Oerth discusses the strong performance of crypto assets in 2024 and believes that driven by improved regulatory environment and more maker-friendly, The crypto industry will continue to hit new highs in 2025.

The following is the main text:

We believe that the crypto industry will continue to hit new highs in 2025, mainly benefiting from the gradual clarity of regulation and more friendly makers.

Active development after the U.S. presidential election, shifting investors’ attitudes towards the crypto industry, and the supportive background of the market may drive the performance of crypto assets. President Trump has expressed his desire to build a strategic Bitcoin reserve and has appointed makers supporting the crypto industry.

Crypto assets performed strongly in 2024. With the U.S. Republicans winning the House, Senate and presidential elections, Bitcoin broke the $100,000 mark, and as of January 31, 2025, the total market value of all crypto assets has reached $3.5 trillion. U.S. large-cap stocks have risen 4.8% since the election, Bitcoin has risen 47.6% and Ethereum has risen 37.4%. We expect this momentum to continue in 2025 as a series of positive news and legislative progress looks likely.

In our view, crypto assets are largely affected by the macroeconomic environment and market sentiment, which may lead to large fluctuations in their prices. At present, the market environment and sentiment are shifting towards a more favorable crypto assets, including some active developments after the U.S. election, investors' more friendly attitude towards the crypto industry, and the overall market as central bank interest rate cuts and global economy returns to normal growth environment Support background, etc.

We list the following five prominent factors that show why crypto assets may continue to perform well in 2025.

01 Crypto-friendly U.S. makers take office

President Trump has said he will continue to launch a range of crypto-friendly, including hopes to build strategic Bitcoin reserves, and at the Securities and Exchange Commission (SEC) and commodity futures Critical regulators such as the Transaction Commission (CFTC) have appointed makers supporting the crypto industry. However, support for crypto assets is not just from the President. In the 2024 election, a total of 294 candidates from both parties who support the crypto industry were elected to the House and Senate of the U.S. Congress, according to data from a group that supports the crypto industry.

This could mean Trump's will be very different from Biden, who has always been hostile to crypto assets. For example, the Securities and Exchange Commission, led by SEC Chairman Gary Gensler, has filed lawsuits against crypto companies on several occasions, but has not clearly stated the specific framework to follow, and has been criticized for adopting a "replacement with law enforcement." Biden himself is also opposed to the crypto industry, and he still opposes the bill despite the cross-party support of the 21st Century Financial Innovation and Technology Act (FIT21).

One of the key controversy points is SAB 121 - a notice issued by the SEC in 2022 that requires publicly traded institutions to strictly follow regulations when keeping crypto assets for their customers. SAB 121 requires these institutions to include crypto assets on the balance sheet, which not only triggers capital regulatory requirements, but also prevents most banks from participating in the digital asset ecosystem. Because SAB 121 requires publicly traded institutions to include crypto assets on their balance sheets, and most banks lack sufficient capital or related risk management measures to support this additional burden, they are unable to participate in the crypto assets ecosystem.

As banks lack effective custody solutions, many crypto investors have had to turn to alternatives that are both expensive and often less reliable. Today, SAB 121 has been abolished, opening up a new path for more large institutions to provide crypto asset custody services.

As the U.S. changes in the crypto assets field, we expect more investors to start accepting crypto assets, which may push the crypto market into a bull market. Since the November election, investor interest in the US Bitcoin CEX trading product (ETP: Exchange-Traded Product) has continued to rise.

The growth of total asset scale and capital inflow trends since its listing on January 11, 2024

02 Investing in crypto assets has become easier

In 2024, the United States and Hong Kong launched spot bitcoin products (ETFs). According to Bloomberg data, as of the end of 2024, it has attracted a net inflow of US$34.6 billion. It is expected that by 2025, more investors may be allowed to participate in spot ETF trading, and more crypto assets may also become easier to invest through ETFs. According to the latest regulatory filing from the U.S. Securities and Exchange Commission (SEC) as of the end of January, multiple ETFs have planned to start investing in other crypto assets. As more investment products are introduced and attracting more investors, we expect the prices of crypto assets to rise as a result.

03 The perception of Bitcoin is changing

As the market value of Bitcoin continues to grow, investors' attitudes towards this leading crypto asset are also changing. In January 2024, the United States launched a wide range ofAccessible spot Bitcoin trading products (ETFs) mark an important milestone, and the world's largest capital market provides investors with a convenient way to invest in Bitcoin easily (and possibly Ethereum in the future). For example, as of January 11, 2024, U.S. investors have invested $40.6 billion in spot Bitcoin ETFs, and by the end of 2024, the total assets of this product reached $101.8 billion. By comparison, gold ETF has $124.2 billion in assets under management.

A year after the launch of Bitcoin ETF, its asset size is close to the level of US gold ETF.

04 The market environment looks more favorable

The interest rate cuts in major economies such as the United States, the euro zone, and the United Kingdom suggest that 2025 may become the "risk preference year" for the global market. In fact, we are more optimistic about the more cyclical areas in the market for 2025, such as stocks and trust generations. Crypto assets may be supported when investors are more willing to take risks, as they are often more affected by the macroeconomic environment.

05Tokenization is gradually advancing. Tokenization is to record certain assets or information on the blockchain through token form, which brings many benefits to asset management and exchange. We believe that the current financial system can achieve a variety of potential advantages through tokenization, such as reducing counterparty risks, speeding up payment and settlement speed, and personalized customization to improve customer investment experience.

In the past five years, the central bank's pilot projects for digital currency and asset tokenization have gradually made progress, including tokenized money market funds, tokenized bonds and tokenized private equity market products. The UK plans to issue Tokenized Treasury bonds for the first time in the next two years. In the euro zone, the European Central Bank is preparing to launch a digital euro, which is expected to promote further development of tokenized applications. As this technology becomes more popular, we expect crypto assets to benefit from it as well.

06 Summary: 2025 is a year worth paying attention to.

Crypto assets are a highly volatile investment and may fluctuate significantly due to changes in news events. Overall, the reason we believe that the crypto market will continue to hit new highs in 2025 is mainly due to the increased regulatory transparency and more friendly factors that have brought good news to digital assets (for example, after Trump’s election crypto market price fluctuations, news of Trump’s nomination to the U.S. Securities and Exchange Commission (SEC) chairperson, and the U.S. decision to approve spot bitcoin and Ethereum ETFs). We also expect interest rate cuts in many major economies may stimulate demand for risky assets.

Note: The above views only represent the author’s personal views as of February 14, 2025 and cannot be regarded as investment advice and are for reference only. Forward-looking statements do not guarantee future results, and the risks, uncertainties and assumption factors involved may cause actual results to differ from expectations.