2024 began with the launch of bitcoin ETFs, and just months later came the unexpected approval of Ethereum ETFs. Bitcoin hit an all-time high, shattering the long-awaited $100,000 threshold. Institutional interest in digital assets technologies like blockchain, tokenization, and stablecoins soared higher than ever before. However, despite the year’s positive development for crypto, it may well be just the beginning.
The potential developments in the industry were examined in the 2025 Digital Asset and Cryptocurrency Trends report, co-authored by Javelin Strategy & Research’s James Wester, Co-Head of Payments, and Joel Hugentobler, Cryptocurrency Analyst. The most significant trends in 2025 will include the decentralization of AI, the growing 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 into their operations. The crypto industry is no exception. Decentralized, open-source AI can offer benefits that differ from the centralized options that have gained precedence so far.
“Open-source AI is what we’re watching out for as an alternative or a hedge to traditional AI,” Hugentobler said. “With the centralized players, things like censorship or false information or bias can come into the picture, whereas open-source AI should provide a more objective look at the data. For example, the traditional polls for this recent U.S. election were skewed, where with open source blockchain options like Polymarket, the polls were more accurate.”
Blockchain can provide a better repository for AI to obtain its knowledge because on-chain records are immutable and decentralized. These records can be easily verified and visible to all users. Every action on the blockchain can be traced, increasing reliability, and this transparency is especially critical when dealing with financial data.
Installing AI on the blockchain puts the community in control of future developments, allowing users to decide how AI leverages the data. This increased accountability helps mitigate the risk of misuse.
Decentralized Energy
One of the challenges with artificial intelligence is it requires vast amounts of energy. The technology relies primarily on centralized data centers powered by supercharged chips. An emerging solution is decentralized physical infrastructure—a network of blockchain nodes that replaces the need for a single massive data center.
“There is a lot of geopolitical risk out there right now, including natural disasters and war,” Hugentobler said. “A distributed network of computing power is much more resilient to things like that. If a node in Africa goes out, the overall network will continue to work. Whereas you look at companies like PayPal or Mastercard that have centralized servers, if an earthquake or tornado hit that centralized location, the network is out until they get it resolved.”
The DePIN approach also makes it possible for smaller businesses to access AI and leverage its benefits. A decentralized model allows these companies to adopt technology suited to their specific needs, and easily scale up as they grow.
While this model offers clear benefits, challenges remain. Latency and regulatory issues need to be addressed, but these concerns are unlikely to keep the sector from continuing to gain traction next year.
On-Chain Assets
The tokenization of real-world assets has been central to many institutional initiatives in 2024, and that is likely to continue. Use cases so far have included creating digital representations of everything from stocks and property deeds to art and collectibles.
One of the most impactful 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 usually issued by non-bank companies, and are backed by a reserve of fiat currency held by those firms. Stablecoins can be transferred between users like cash, with ownership determined by whoever holds it.
Stablecoins have been viewed as a powerful alternative for unbanked or underbanked individuals, as well as for citizens of countries with volatile currencies. They offer instant payment settlement and minimal fees, making them more attractive than card- or ACH-based payments.
Tokenized deposits can deliver the same speedy settlement and low fees as stablecoins, but in a regulated banking environment.
“I think tokenized deposits will be a big focus for financial institutions because private lending has grown immensely, just in the last year,” Hugentobler said. “More banks are putting assets like HELOCs and personal loans on chain, and it is much faster and more transparent for banks and consumers. It’s a trend that’s going to continue—companies are going to continue to put funds and assets on-chain.”
Where Things Are Headed
There has already been an increased emphasis on tokenization and digital assets in regions like Europe, where the Markets in Crypto-Assets (MiCA) regulatory framework is going into effect. The MiCA regulations should make it easier for crypto companies in the region to navigate the rules of the road.
In contrast, the lack of tangible crypto regulation in the U.S. has been a source of much criticism and controversy over the past year. While there is speculation that a more favorable environment is on the way, it will take time for any significant digital assets framework to be approved and implemented.
“At the same time, this is a very fast-moving and evolving industry,” Hugentobler said. “I like that saying, ‘Gradually, then suddenly.’ It’s all unfolding right before our eyes, and individuals and companies need to pay attention and prepare their portfolios. They should look 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 headed.”
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