The year 2024 began with the launch of Bitcoin ETFs, and a few months later came the unexpected approval of Ethereum ETFs. Bitcoin has reached an all-time high, breaking the long-awaited $100,000 threshold. Institutional interest in digital asset technologies such as blockchain, tokenization, and stablecoins has soared higher than ever. However, despite the positive developments of the year for crypto, this may only be the beginning.
Potential industry developments were examined in the 2025 Digital Asset and Cryptocurrency Trends Report, co-authored by Javelin Strategy & Research co-head of payments James Wester and crypto analyst Joel Hugentobler. cash. The most significant trends in 2025 will include the decentralization of AI, the increasing tokenization of deposits, and the increased use of decentralized physical infrastructure (DePIN).
The year of AI
Artificial intelligence has taken center stage, with businesses of all shapes and sizes exploring ways to leverage the technology in their operations. The crypto industry is no exception. Decentralized and open source AI can offer different benefits than the centralized options that have taken over so far.
“Open source AI is what we are looking for as an alternative or a safeguard to traditional AI,” Hugentobler said. “With centralized actors, things like censorship, fake news or bias can come into play, whereas open source AI should provide a more objective overview of the data. For example, traditional polls for this recent US election were biased, whereas with open source blockchain options like Polymarket, the polls were more accurate.
Blockchain can provide a better repository for AI to gain its knowledge because on-chain records are immutable and decentralized. These records can be easily checked and visible to all users. Every action on the blockchain can be traced, which increases reliability, and this transparency is especially critical when dealing with financial data.
Installing AI on the blockchain gives the community control over future developments, allowing users to decide how the AI leverages data. This increased accountability helps mitigate the risk of misuse.
Decentralized energy
One of the challenges of artificial intelligence is that it requires large amounts of energy. The technology relies primarily on centralized data centers powered by supercharged chips. One emerging solution is decentralized physical infrastructure: a network of blockchain nodes that replaces the need for a single massive data center.
“There are many geopolitical risks currently, including natural disasters and wars,” Hugentobler said. “A distributed network of computing power is much more resilient to this sort of thing. If a node in Africa goes down, the global network will continue to operate. As you look at companies like PayPal or Mastercard that have centralized servers, if an earthquake or tornado hits that centralized location, the network is down until they fix the problem.
The DePIN approach also allows small businesses to access and benefit from AI. A decentralized model allows these businesses to adopt technology tailored to their specific needs and easily scale as they grow.
Although this model offers clear advantages, challenges remain. Latency and regulatory issues need to be addressed, but these concerns are unlikely to prevent the sector from continuing to gain traction next year.
On-chain assets
Tokenization of real-world assets has been at the heart of many institutional initiatives in 2024, and this is expected to continue. Use cases so far have included creating digital representations of everything from stocks and deeds to artwork and collectibles.
One of the most significant trends in 2025 will be the tokenization of deposits. Tokenized deposits are digital versions of bank deposits, issued by a bank and tracked like funds in bank accounts.
Because they are both representations of fiat currency on blockchains, tokenized deposits are often confused with stablecoins. However, stablecoins are typically issued by non-bank companies and are backed by a reserve of fiat currency held by those companies. Stablecoins can be transferred between users like cash, with ownership determined by whoever holds them.
Stablecoins have been seen as a powerful alternative for the unbanked or underbanked, as well as citizens of countries with volatile currencies. They offer instant payment settlement and low fees, making them more attractive than card or ACH payments.
Tokenized deposits can offer the same fast settlement and low fees as stablecoins, but in a regulated banking environment.
“I think token deposits will be a priority for financial institutions because private lending has grown tremendously over the past year,” Hugentobler said. “More and more banks are putting assets like HELOCs and personal loans on chain, and doing so is much faster and more transparent for banks and consumers. This is a trend that will continue: companies will continue to put funds and assets on-chain.
Where are things going?
There has already been a greater focus on tokenization and digital assets in regions like Europe, where the Regulatory Framework for Markets in Crypto Assets (MiCA) is coming into force. The MiCA regulations are expected to make it easier for crypto companies in the region to comply with the rules of the road.
In contrast, the lack of tangible crypto regulation in the United States has been a source of much criticism and controversy over the past year. Although some speculate that a more favorable environment is coming, it will take time for a meaningful digital asset framework to be approved and implemented.
“At the same time, this is a very rapidly evolving industry,” Hugentobler said. “I like this saying: ‘Little by little, then all at once’. Everything is happening before our eyes, and individuals and businesses need to pay attention and prepare their wallets. They should be looking for opportunities to gain market share and integrate this technology into their existing systems and businesses because, to me, it’s very clear that this is where things are going.
