After a whirlwind year in 2024, crypto market participants are setting their sights on 2025, wondering what the new year may hold for the asset class.
Amid the questions and the speculation, leading asset manager Franklin Templeton has offered three themes for investors to watch in the new year.
Franklin Templeton’s 2025 Crypto Outlook
$1.68 trillion asset manager Franklin Templeton has offered its crypto outlook for 2025. In the outlook shared on Monday, December 30, the firm identified three themes for investors to watch. These themes include regulations, institutional adoption, and AI-crypto convergence.
Regulatory Clarity Coming
Franklin Templeton tipped 2025 to usher in regulatory clarity for crypto, with U.S. regulators like the SEC leading the way. These sentiments come in light of the incoming Donald Trump administration’s anticipated pro-crypto policy leanings and the imminent change of the SEC guard.
Trump has nominated Paul Atkins, who is widely known as a crypto advocate, for the SEC’s chairman.
Under clearer regulatory skies, Franklin Templeton expects to see the approval of more diversified crypto-focused funds. Other asset managers already appear to be banking on this trend. Strive has recently submitted an application to launch a Bitcoin Bond ETF. On the other hand, Bitwise has filed to launch a Bitcoin Standard Corporations ETF.
Franklin Templeton expects this regulatory climate to unlock new levels of institutional integration with crypto.
Tokenization and Stablecoins
With more explicit guidance from the SEC, Franklin Templeton expects to see more tokenized security products from traditional finance institutions.
The asset manager also expects these institutions to take a stab at the stablecoin market as market participants anticipate a stablecoin regulatory framework from lawmakers.
Notably, this trend is already observable in the European Union. Following the passing of MiCA, ventures tied to banking giants like Societe Generale, Deutsche Bank, and BBVA are already throwing their hats in the ring to launch Euro-backed stablecoins.
Franklin Templeton contends that this greater institutional adoption in the form of tokenization and stablecoin development will be major drivers for DeFi in 2025.
AI and Crypto
Beyond regulatory clarity ushering greater institutional adoption, Franklin Templeton tips 2025 to be a year of accelerated AI and crypto convergence.
The asset manager argues that blockchain technology will be key in expanding the “AI-driven economy” by offering transparency and verifiability.
Moreover, the firm expects the adoption of AI agents to grow in the automation of on-chain transactions and portfolio management.
Amid all these, Franklin Templeton predicts that Bitcoin will cement its place as a global store of value, with several countries and companies establishing strategic reserves.
The firm also expects heightened demand for decentralized physical infrastructure networks (DePINs) as logistics and Internet of Things (IoT) industries seek greater efficiency.