Crypto Loses the Hype but Wins the Banks

For cryptocurrency markets, 2025 was a year that went full circle.

Digital assets are ending the year with nearly all of their gains over the past 12 months having been erased by market volatility.

However, focusing on crypto’s cyclical booms and busts misses the broader picture of the past year. The narrative of 2025 wasn’t one of out-and-out bullish price action or retail mania, or even the wintry chill cast over markets Tuesday (Dec. 23).

Instead, it was a story of structural adoption, regulatory articulation and financial integration. These trends signal crypto’s steady migration from fringe innovation toward the core of financial architecture.

Softening policy in the United States played a principal role in this evolution. The GENIUS Act, signed into law mid-year, established the first comprehensive federal framework for regulating stablecoins by mandating full backing with high-quality liquid assets (typically U.S. dollars or Treasuries) and rigorous transparency standards, reducing ambiguity.

The digital asset industry evolution was also partly structural. Institutional capital, now embedded in crypto markets, brought expectations shaped by decades of experience in traditional finance, including predictable cash flows, regulatory clarity and risk controls. Retail investors, burned by past collapses, were more selective. Speculation didn’t disappear, but it lost its cultural centrality.

While digital asset markets whipsawed and crypto treasury companies proliferated, the most striking development of 2025 was the normalization, regulation and embrace of stablecoins across traditional finance, FinTech and crypto-native ecosystems.

Read also: This Week in Stablecoins: Winning the Back Office, Not the App Store

Not Mainstream Yet, but Growing Closer Than Ever

This year marked crypto’s transition from a volatile asset class into a set of increasingly embedded financial and technological systems. The transformation was uneven, often unglamorous, and far from complete. But it was real. Crypto in 2025 became less about ideology and more about execution.

The U.S. Office of the Comptroller of the Currency this month conditionally approved applications for new national bank trust charters to five applicants from the digital asset and blockchain finance space.

On the institutional front, regulatory certainty translated into real capital flows and product launches. Traditional institutions like Citigroup, Fidelity, JPMorgan Chase, Mastercard and Visa, as well as many others, announced or expanded crypto offerings, from custody to direct retail trading, staking and on-chain settlement services.

What differentiated this wave from earlier attempts was restraint. Companies stopped trying to rebuild everything on blockchain and focused instead on narrow, high-friction processes across payments and transaction settlements. The ideological debates that once dominated crypto philosophies gave way to operational questions about uptime, integration and data privacy.

The approach of traditional financial institutions also reflects a growing consensus among large banks that the future of tokenization is likely to be permissioned, not permissionless, and integrated, not parallel, to existing systems. JPMorgan Chase, for example, is reportedly deepening its blockchain efforts with its first tokenized money market fund, the private My OnChain Net Yield Fund.

JPMorgan Chase is also reportedly weighing crypto trading for its institutional clients.

The Federal Deposit Insurance Corp. also undertook new rulemaking, an indication of a new era of regulatory clarity. PayPal introduced stablecoin financial tooling designed for artificial intelligence-native businesses, while Visa expanded its U.S. stablecoin settlement capabilities.

The emerging reality of stablecoins as a new payment rail was illustrated by a series of year-end developments from the sector, such as SoFi’s unveiling of an enterprise stablecoin and Coinbase’s rollout of a white-label stablecoin issuance product designed for corporations and banks.

See also: Building the Blockchain Blueprint: How Leading FIs Are Modernizing Money, Markets and Trust

A New Cycle Emerges Across Venture Capital and Market Dynamics

Crypto venture capital enjoyed a renaissance in 2025, with over $16 billion in capital raised across the sector, surpassing 2024 totals even before year-end. The initial public offering market also reopened with examples like Circle’s New York Stock Exchange listing, reflecting a recalibration of investor appetite toward regulated, revenue-generating crypto enterprises.

Perhaps the most significant cultural shift of the year was internal. Crypto maximalism, the belief that blockchain would replace most existing institutions, lost influence. In its place emerged the more measured view of crypto as a complementary system, not a totalizing one.

This change was driven less by ideology than by experience. Users gravitated toward digital asset products that solved real problems, regardless of whether they were fully decentralized.

Equally important are the things that didn’t materialize in 2025.

Crypto did not decouple from macroeconomic conditions. It did not eliminate intermediaries at scale. Web3 did not replace the internet as we know it. Mass consumer adoption remained elusive.

Instead, the crypto industry aimed to upgrade parts of the existing financial system with faster settlement, programmable assets and global digital dollars.

No annual roundup would be complete without noting that the crypto space is still being dogged by many ghosts of its Wild West days, an era that may not be entirely over despite its facelift in the U.S. and European Union.

The crypto industry saw more than $3.4 billion in theft from January through the early part of September. Nearly half of that total, or $1.5 billion, came from a single incident, the historic February compromise of the Bybit crypto exchange.

Coinbase was also hit with a potential $400 million cybersecurity incident.