We’re now 28 months into the current crypto bull market after bitcoin’s price made a bear market bottom in November 2022. While it may not be a young bull anymore, the rate at which significant new developments are unfolding does not seem to be slowing down. Among them: Government officials pledging to spur crypto innovation in the US.
What else should investors be watching through the first half of 2025? Here’s Fidelity’s take on some of the hottest issues on crypto investors’ minds today.
1. Is it too late to enter the bull market?
Those who have only recently become aware of bitcoin’s skyrocketing year-over-year price may be feeling a bit of FOMO. Despite the drop in late February, its price is still up over 400% from its November 2022 bear market lows.
Would buying now be unwise?
While no one can tell the future, it may be helpful to consider that historically, crypto bull markets tend to run for just under 3 years before entering a new bear market. If the market continues to follow this pattern, we may be in a mature phase of this bull cycle. That said, remember that past performance is no guarantee of future results.
For Chris Kuiper, Research Director, Fidelity Digital Assets®, the answer also depends on the time horizon for your investment goals. “It may be too late for the speculators that want another frenzy for this cycle,” says Kuiper.
But it may be the opposite for investors with long-term time horizons. “Fidelity Digital Assets Research believes we are beginning to see early signs of mass diffusion and adoption,” says Kuiper. “For example, in the past year we have already seen discussions around nation-state adoption and increased corporate balance sheet adoption. I believe we are still incredibly early in terms of this new era of sustainable adoption, diffusion, and integration.”
Ultimately, he concludes that it’s not too late to enter the market for long-term holders. “Fidelity Digital Assets Research believes we may be entering the dawn of a new era for digital assets, one poised to span multiple years—if not decades,” he notes. “This era could see digital assets permeating various sectors—industries, technologies, fields, balance sheets, and even nation-states.”
2. What might be coming down the pipeline for crypto policy?
Thus far, the new presidential administration has pledged to be pro-crypto, igniting hopes in the industry that long-awaited regulatory frameworks are on their way. In the past, the lack of clear regulations has made it difficult for crypto platforms to operate in the US.
Nothing concrete has been approved yet, but below are a few works in progress investors are watching. Keep in mind there is no guarantee any of them will come to fruition.
- Stablecoins: The top priority for the new administration, which has been moving aggressively to establish a regulatory framework. The GENIUS Act (advanced in the Senate) and the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act (advanced in the House) are 2 pieces of legislation currently in progress.
- Comprehensive regulatory guidelines for crypto as a whole: One of the most significant bills in this area is the Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to establish clear operating rules and consumer protections for the crypto industry with respect to the SEC and CFTC. Its current form is expected to undergo heavy edits.
- Strategic crypto reserves: In early March, President Trump announced plans for a government-held crypto reserve that includes bitcoin, ethereum, and several other altcoins. Meanwhile, last year’s BITCOIN Act of 2024, which was introduced in the Senate, awaits review. If passed, it would include a mandate that the government hold 1 million bitcoin. Finally, at least 18 states have also considered creating bitcoin reserves.1
In early February, SEC commissioner Hester Peirce, who also heads the SEC’s newly formed Crypto Task Force (formed to create a comprehensive regulatory framework for crypto), expressed optimism but also acknowledged things may take time.
"Please be patient,” Peirce wrote in early February.2 “The Task Force wants to get to a good place, but we need to do so in an orderly, practical, and legally defensible way.”
3. How might bitcoin’s price be impacted if the economy goes south?
So far in 2025, one theme pervading the financial markets is uncertainty. The new administration is still defining economic policies, and the full impact on the markets remains to be seen. Meanwhile, the Fed has held interest rates steady in January and February, citing persistent inflation.
What might happen to bitcoin’s price if the economy experiences stagflation—when employment and economic growth are poor, yet inflation remains high?
Kuiper believes it would depend on how the Fed and government respond. “If fiscal and monetary institutions chose to fight the “stag” part of the problem through increased spending or monetary tools, bitcoin could potentially perform well, albeit likely with another lag,” says Kuiper.
“However, if controlling the “flation” part becomes the higher priority and is addressed with significant reductions in the money supply, liquidity, and fiscal spending, then bitcoin could potentially face headwinds on a relative basis.”
4. Could the mainstream appeal of digital assets grow?
Fidelity Digital Assets research analyst Matt Hogan believes it could. In addition to the possibility of increased adoption by nation-states and corporations mentioned earlier, Hogan cites 3 other potential catalysts to watch.
New crypto products for traditional investors
The spot bitcoin ETP, which launched in January 2024, has drawn substantial interest from the market, as it makes it easier for investors otherwise hesitant about crypto’s self-custody risks to get crypto exposure.
Its success could lead to the creation of new financial products aimed at making crypto more accessible to the everyday investor. “With the initial success of the ETPs, it would not be unreasonable to expect 2025 to bring more structured passive and actively managed digital asset products to the world of TradFi [traditional finance],” says Hogan. This could help make digital assets more appealing to the general public beyond the existing ETPs.
Increased tokenization
Tokenization involves tracking and managing the ownership of an asset using a blockchain. Recently, the use cases have been growing. There is a long list of assets that are increasingly being tokenized, including Treasurys, money market and institutional funds, global bonds, private credit, commodities, institutional funds, and even car titles.
“As of February 2025, the total nominal amount of tokenized real-world assets sits at $17 billion, up from $8 billion in 2023,” says Hogan.3 “Fidelity Digital Assets believes this number could double from where it currently is one year from now.”
The more traditional assets are tokenized, the more likely everyday investors may be to interact with blockchains and digital assets as a whole.
The potential growth of bitcoin lending
As interest in bitcoin increases, Hogan believes bitcoin lending (which refers to institutions that provide leverage for bitcoin holders, and products that allow bitcoin holders to generate yield) could become more popular.
“Traditional financial institutions with a proven track record and more robust balance sheets may have a strategic competitive advantage to enter the market to meet this demand,” says Hogan. “Bitcoin lenders very well may accelerate the adoption of bitcoin ownership by large companies through addressing an unmet need in the market, as holding spot bitcoin does not generate yield on its own.”
5. Could we see another altseason?
“Altseason” refers to any period of time when the prices of altcoins (non-bitcoin cryptocurrencies) outperform that of bitcoin. In previous bull markets, altseason has been marked by extreme jumps in altcoin prices.
So far during this cycle, however, bitcoin’s dominance (defined as its market cap as a percentage of the entire crypto market’s market cap) has not shown any signs of letting up. As of February, bitcoin’s price has already traded nearly 60% above its 2022 all-time high, while ethereum, the second-largest cryptocurrency by market cap, has yet to make a new all-time high.
No one knows for sure whether this cycle will get another altseason or not. In the meantime, Kuiper sees bitcoin’s increasing popularity as a reason the altcoin market has been sluggish.
“This is the first time we have seen bitcoin's dominance rise along with its price,” says Kuiper. “Personally, I think this may highlight how bitcoin is benefitting from larger institutional interest, as we have seen corporate balance sheet adoption accelerate and now have multiple countries and other institutional investors looking at bitcoin specifically, but have not seen interest in other altcoins to the same extent.”
“It seems this time around there isn’t the same positive sentiment in retail, and in many ways it seems the sentiment around non-bitcoin cryptocurrencies is negative. We recently saw liquidations where bitcoin sold off around 10%, but altcoins sold off anywhere from 20%-40% or more.”
Investors should have a plan for a scenario where altseason doesn’t happen this cycle. The crypto environment could change drastically this year with the new administration, and there’s no guarantee that every cryptocurrency will be positively impacted.