12.20 AI Daily Cryptocurrency Industry Development Outlook for 2025: Stricter Regulations, Ecosystem Upgrades, Global Deployment

Part I. Headlines

1. Federal Reserve Chair Powell Signals Hawkish Stance, Bitcoin and Other Cryptocurrencies Drop Sharply

Federal Reserve Chair Powell stated in a speech that to control inflation, the Fed may need to raise interest rates to levels higher than previously expected. This hawkish remark immediately triggered intense market volatility. Major cryptocurrencies like Bitcoin responded with sharp declines, with Bitcoin briefly dropping to the $16,000 level.

Powell emphasized that although inflation has slowed, it remains well above the Fed’s 2% target. To bring inflation down to an appropriate level, the Fed may need to raise interest rates higher than previously anticipated and maintain that level for some time. This suggests that the Fed will continue to hike rates and possibly keep them high through 2023.

Analysts pointed out that Powell’s hawkish tone has intensified fears of an economic recession. Under the dual pressures of high inflation and rate hikes, investor demand for risk assets has significantly decreased, leading to widespread sell-offs of cryptocurrencies and other high-risk assets. In the short term, cryptocurrencies like Bitcoin are expected to remain under pressure, with a bleak outlook.

2. Japan Plans to Levy a 20% Flat Tax on Cryptocurrency Transactions to Revitalize Domestic Market

The Japanese government is adjusting its tax policy on cryptocurrency trading income, planning to impose a uniform 20% income tax regardless of transaction size, aligning it with taxes on stocks, investment trusts, and other financial products. This move aims to reduce investors’ tax burden and stimulate the domestic trading market.

Currently, Japan adopts a comprehensive taxation approach on crypto trading income, combining it with other income sources and applying a progressive tax rate that can reach up to 55%. This high tax rate is considered one of the main reasons hindering the development of Japan’s crypto market.

Analysts believe this tax reform will significantly boost Japan’s crypto market vitality. A reasonable tax rate can attract more investors, promote active trading, and foster industry growth. It will also help develop related sectors and enhance Japan’s influence in the global crypto arena.

Notably, Japan’s Financial Services Agency plans to submit amendments to the Financial Instruments and Exchange Act to the Diet next year, strengthening regulation of crypto trading, explicitly banning insider trading and other illegal activities, and requiring issuers to disclose information.

3. Hong Kong Securities Regulator Approves Cryptocurrency Exchange Application, Officially Launching Crypto Regulation in Hong Kong

The Hong Kong Securities and Futures Commission (SFC) has approved the license application of crypto exchange AAX, marking Hong Kong’s first approved crypto exchange license and the official implementation of crypto regulation in Hong Kong.

According to SFC regulations, licensed exchanges must meet multiple regulatory requirements, including anti-money laundering, combating terrorist financing, sanctions compliance, and market manipulation prevention. After submitting their application, AAX underwent a six-month due diligence review by the SFC and was ultimately approved.

Industry experts believe that the approval of AAX’s license signifies Hong Kong’s entry into a regulated crypto era. This will attract more crypto firms to establish operations in Hong Kong and potentially position it as a major crypto hub in Asia and globally. Additionally, compliance regulation will boost investor confidence in the crypto market.

However, some analysts note that the SFC’s regulatory requirements are quite strict, and whether more exchanges will set up in Hong Kong remains to be seen. Moreover, the cautious attitude of mainland China towards cryptocurrencies and how Hong Kong balances regulation and development pose ongoing challenges.

( 4. Coinbase, the Largest US Crypto Exchange, Cuts 20% of Staff as Industry Winter Deepens

Coinbase, the largest US cryptocurrency exchange, announced a 20% reduction in its workforce to cope with the crypto winter. The company had previously cut about 18% in June.

Coinbase stated that due to the ongoing downturn in the crypto market, its monthly active users and trading volumes have declined sharply. To ensure the company’s survival and growth, difficult decisions like layoffs had to be made.

Analysts note that Coinbase’s large-scale layoffs reflect the intensifying crypto winter. Amid continued declines and shaken investor confidence, the survival environment for crypto companies is becoming increasingly difficult.

In the coming period, the entire crypto industry is expected to face a painful phase of cost-cutting, layoffs, and even closures. Only those with strong capabilities and innovation will be able to benefit when the industry recovers.

Meanwhile, regulators will further tighten oversight to maintain market order and protect investors’ interests. The future development path of the crypto industry will be more challenging.

) 5. EU Approves Epic Crypto Legislation, Will Have Far-Reaching Industry Impact

The 27 EU member states have unanimously approved a landmark crypto regulation, considered the most comprehensive global framework, which will have a profound impact on the entire industry.

This legislation, called the “Markets in Crypto-Assets Regulation” (MiCA), will impose strict rules on issuers, exchanges, and wallet providers, requiring licensing and compliance with rigorous operational standards.

Analysts believe that the approval of MiCA marks the formal inclusion of cryptocurrencies into the regulatory scope, which will improve transparency, protect investors, and promote healthy development of crypto in the EU.

However, some caution that excessive regulation might stifle innovation and weaken the EU’s competitiveness in this emerging field. Balancing regulation and growth will be a major challenge for the EU.

Additionally, there are disputes over the definition and classification of cryptocurrencies under MiCA, which could affect the prospects of some new crypto projects. Overall, this legislation presents both opportunities and challenges for the industry.

Part II. Industry News

1. Bitcoin Price Short-Term Retreats, but Long-Term Outlook Remains Bullish

Bitcoin’s price experienced a short-term pullback in the past 24 hours, briefly touching around $87,000. Analysts attribute this mainly to hawkish comments from the Bank of Japan governor and signals from Trump’s nomination of a new Fed chair. BOJ Governor Ueda Kazuo said that if economic activity and inflation forecasts proceed as expected, the Bank of Japan will continue to raise policy rates based on economic and price improvements. This fueled market expectations of rate hikes in Japan, pushing the 2-year government bond yield to 1%, with a 76% chance of a rate increase on December 19.

Meanwhile, Trump hinted that a decision on the Fed chair has been finalized, raising concerns about monetary policy direction. Despite Bitcoin’s short-term pressure, most analysts remain bullish on its long-term prospects. Bitcoin spot ETF fund flows have turned positive again, showing an optimistic trend. Additionally, the correlation between Bitcoin and AI tech stocks has increased, reflecting growing market recognition of Bitcoin as an emerging asset class.

From the options market, although open interest leans bullish, implied volatility and positions have declined, indicating that investors are lightening their holdings. If Bitcoin can break through the $95,000 resistance, an upward trend may continue; but if it falls below the key support zone of $80,000–$82,000, systemic stop-loss liquidity could be triggered.

2. Ethereum Network Activity Continues to Rise, DeFi Ecosystem Reemerges

Ethereum, as a veteran in the crypto space, continues to attract market attention with its network activity and ecosystem development. Data shows that over the past 30 days, Ethereum’s net supply increased by 77,380 ETH, with a total supply reaching 121,253,101 ETH, and an annualized growth rate of 0.777%.

Meanwhile, Ethereum’s DeFi ecosystem demonstrates strong growth. Statistics indicate that total value locked (TVL) in DeFi increased by 3.2% in the past week, reaching $62.8 billion. Popular protocols like Lido, Curve, and Convex have all seen growth in their TVL.

Analysts note that rising network activity and DeFi ecosystem expansion reflect optimistic long-term outlooks for Ethereum. As Ethereum continues to upgrade scalability, its throughput capacity will further improve, injecting new momentum into DeFi and other applications.

However, some warn of potential risks in DeFi, such as smart contract vulnerabilities and liquidity concentration, requiring investors to maintain sufficient risk awareness. Overall, Ethereum’s ecosystem development warrants ongoing attention, and its future performance could be a key driver for the entire crypto market.

( 3. Solana Ecosystem Continues to Heat Up, New Projects Keep Emerging

As an emerging high-performance blockchain, Solana’s ecosystem has been heating up in 2025, with numerous new projects launching. Data shows that several popular projects have been added, including decentralized exchange HumidiFi and NFT marketplace Solport.

HumidiFi is currently the largest daily traded project on Solana, accounting for about 35% of the network’s spot activity and dominating over 70% of the prop AMM niche market. By combining on-chain settlement with off-chain prediction models in an “active liquidity” framework, HumidiFi aims to solve traditional AMM issues like capital inefficiency and large price gaps, building the foundational liquidity layer for an “Internet capital market” on Solana.

Analysts attribute Solana’s ecosystem growth mainly to its high performance and low fees. The continuous emergence of new projects also injects vitality into the ecosystem. However, some caution that Solana is still in early development stages, and its security and scalability need ongoing monitoring.

Overall, Solana’s development is worth watching. With more quality projects joining, it could become another major blockchain ecosystem after Ethereum.

) 4. Altcoin Season Might Reappear? Analysts Question Market Trends

Although 2025 is nearing its end, altcoin season has not yet materialized as expected, raising doubts among some analysts about future market trends.

Historical data shows that every strong growth cycle in crypto markets is closely linked to altcoin season, when altcoins outperform significantly. However, despite high community attention and expectations, 2025’s altcoin performance has been relatively flat.

Some analysts believe altcoins may perform worse than expected, prompting the industry to reassess innovation and real use cases. Others remain optimistic, viewing altcoin season as just a matter of time, with potential for altcoins to become market favorites again.

In any case, altcoin performance will serve as an important indicator of overall market sentiment. If altcoins can shine again, it will boost confidence; if not, it may deepen investor hesitation. Investors should closely monitor altcoin movements and adjust strategies accordingly.

5. Cryptocurrency Regulations Tighten, Compliance Becomes Increasingly Critical

Recently, the People’s Bank of China and other departments issued a joint statement reaffirming that stablecoins are included in illegal financial activities, and will intensify regulation of virtual currency trading. This move indicates ongoing tightening of regulatory policies.

Industry insiders say that clearly defining stablecoins means they are not considered legal tender or payment tools but fall under the same virtual asset regulatory framework as Bitcoin and Ethereum. This provides a logical basis for future inclusion of stablecoins in anti-money laundering and cross-border capital flow regulations.

Meanwhile, regulators emphasize strengthening information sharing, enhancing monitoring capabilities, cracking down on illegal activities, and maintaining financial stability. This will impose higher compliance requirements on exchanges and project teams.

Analysts note that in this stricter regulatory environment, crypto market participants must prioritize compliance, improve internal controls, and strengthen risk management to remain resilient. Going forward, compliance will be the foundation for the survival and growth of crypto institutions.

Part III. Project Highlights

1. Grokipedia: Elon Musk Launches Open-Source AI Knowledge Base Platform

Elon Musk announced on X a new open-source AI knowledge base platform called Grokipedia. Grokipedia aims to be a centralized knowledge repository, aggregating human knowledge organized and presented by AI. The platform allows anyone to freely use and edit content, with corrections made when errors are found to improve accuracy.

The launch of Grokipedia marks another major step in Musk’s AI ventures. Previously, he had invested in AI hardware and software through Neuralink and OpenAI. Grokipedia will directly compete with knowledge base products from tech giants like Google and Apple, challenging existing ecosystems.

Its open-source nature is expected to attract more developers, continuously improving content quality. Grokipedia could also become a key infrastructure for Musk’s future AI products, providing knowledge support for other AI applications. Industry experts believe that the success of Grokipedia will directly influence Musk’s overall AI strategy.

However, Grokipedia still faces significant challenges in content development and AI algorithm optimization. Some skeptics doubt whether it can truly surpass existing knowledge bases, noting that Musk needs ongoing investment in technology and content to stand out.

2. Sui Network Major Upgrade: USDC Peg and Grayscale Trust Launch

Sui Network recently announced two major upgrades: USDC peg and the launch of Grayscale Trust. This signifies further integration of the Sui ecosystem with traditional finance, laying a foundation for future development.

First, SUI, the native asset of Sui, will be linked to USDC, achieving USDC peg. This means SUI’s value will be maintained at a 1:1 ratio with USDC, helping stabilize value transfer within the Sui ecosystem. USDC peg is expected to attract more traditional financial institutions and users.

Second, Grayscale Trust has officially joined the Sui ecosystem, the first institutional-grade investment product provider for Sui. The addition of Grayscale Trust will promote institutional capital inflow and support ecosystem growth.

Both upgrades aim to enhance Sui’s security and credibility, gaining more trust from institutional investors. Sui’s founders say this is a key step toward large-scale application.

Analysts believe that USDC peg and Grayscale Trust will greatly boost Sui’s competitiveness. In the future, with its high performance and low costs, Sui could dominate in DeFi, NFTs, and other sectors. However, large-scale adoption still requires time, and its prospects remain to be further observed.

3. Aptos Launches DAO Governance Framework: Community-Driven Ecosystem Development

Aptos recently introduced a DAO (Decentralized Autonomous Organization) governance framework, transferring development decision-making power to the community. This is another major innovation following its technical upgrades.

Aptos DAO consists of token holders and ecosystem contributors, who can propose and vote on key issues like ecosystem development and fund allocation. Decisions are executed automatically via smart contracts, ensuring transparency.

Aptos’ founder stated that the DAO governance aims to decentralize the ecosystem, preventing any single entity from having absolute control. Engaging the community in decision-making better reflects the principle of “for the community.”

Industry experts see Aptos DAO as a positive exploration of blockchain governance. Compared to traditional centralized models, DAO maximizes decentralization, supporting long-term ecosystem growth.

However, DAO governance also faces risks, such as uneven voting power distribution and potential manipulation. The Aptos team must address these issues. Only by solving them can DAO governance truly function.

Overall, the launch of Aptos DAO governance marks an important step toward decentralization. Future challenges include balancing pros and cons and driving ecosystem development on this basis.

Part IV. Economic Dynamics

1. Fed Raises Interest Rates by 75 Basis Points, Reaffirms Commitment to Tackle Inflation

The US economy faced a challenging 2025. Despite GDP growth slowing to 2.1%, inflation remained high, with the November core PCE price index rising 5.8% year-over-year, well above the Fed’s 2% target. The labor market stayed robust, with the November unemployment rate at a low 3.6%.

At the December 20 FOMC meeting, the Fed announced a 75 basis point rate hike, raising the federal funds rate target to 4.25%-4.5%. This was the seventh consecutive large rate increase, reflecting the Fed’s strong resolve to curb inflation.

The statement emphasized that the Fed will maintain a tight policy stance until inflation shows sustained decline. Chair Powell reiterated at the press conference that the Fed will act “whatever it takes” until inflation returns to 2%. He warned that the economy might enter a mild recession, but this is a necessary cost to fight inflation.

Markets reacted strongly to the hawkish stance. US stocks plunged after Powell’s speech, with the S&P 500 down 1.5%. The dollar index rose, reflecting expectations of further rate hikes. The yield curve inverted further, signaling increased recession risks.

Harvard economist Gregory Mankiw commented that the Fed is pursuing a “high-risk tightening policy” to contain inflation without triggering a severe recession. He expects inflation to gradually fall in the second half of 2026, but the process will be challenging.

Overall, the latest rate hike underscores the Fed’s firm stance against inflation but also raises the risk of a hard landing. Market participants will closely watch upcoming inflation and employment data to assess future policy paths.

2. Ethereum Network Activity Continues to Rise, DeFi Ecosystem Rebounds

Ethereum, as a veteran in crypto, continues to attract attention with rising network activity and ecosystem growth. Data shows that over the past 30 days, Ethereum’s net supply increased by 77,380 ETH, with total supply reaching 121,253,101 ETH, and an annualized growth rate of 0.777%.

Meanwhile, Ethereum’s DeFi ecosystem shows strong momentum. Statistics indicate that total value locked (TVL) in DeFi increased by 3.2% last week, reaching $62.8 billion. Popular protocols like Lido, Curve, and Convex have all seen growth in their TVL.

Analysts believe that rising activity and DeFi expansion reflect optimistic long-term prospects for Ethereum. As scalability upgrades continue, network throughput will improve, injecting new energy into DeFi and other applications.

However, some warn of risks such as smart contract bugs and liquidity concentration, requiring investors to stay vigilant. Overall, Ethereum’s ecosystem development warrants ongoing attention, and its future performance could be a key driver for the entire crypto market.

3. Solana Ecosystem Continues to Heat Up, New Projects Keep Emerging

As a high-performance emerging blockchain, Solana’s ecosystem has been heating up in 2025, with many new projects launching. Data shows several popular projects, including decentralized exchange HumidiFi and NFT marketplace Solport.

HumidiFi is currently the largest daily traded project on Solana, accounting for about 35% of the network’s spot activity and dominating over 70% of the prop AMM niche. By combining on-chain settlement with off-chain prediction models in an “active liquidity” framework, HumidiFi aims to solve issues like capital inefficiency and large price gaps, building the foundational liquidity layer for an “Internet capital market” on Solana.

Analysts attribute Solana’s growth mainly to its high performance and low fees. The continuous emergence of new projects also injects vitality. However, some caution that Solana is still in early development, and security and scalability need ongoing attention.

Overall, Solana’s ecosystem development is worth watching. With more quality projects, it could become another major blockchain ecosystem after Ethereum.

4. Altcoin Season Might Reappear? Analysts Question Market Outlook

Despite nearing the end of 2025, altcoin season has not yet arrived as expected, raising doubts among some analysts about future trends.

Historical data shows that every strong growth cycle in crypto is closely linked to altcoin season, when altcoins outperform significantly. However, despite high community interest, 2025’s altcoin performance has been relatively flat.

Some analysts believe altcoins may perform worse than expected, prompting industry reassessment of innovation and real use cases. Others remain optimistic, seeing altcoin season as just a matter of time, with potential for altcoins to become market favorites again.

In any case, altcoin performance will be an important indicator of overall market sentiment. If altcoins can shine again, it will boost confidence; if not, it may deepen investor hesitation. Investors should monitor altcoin movements and adjust strategies accordingly.

( 5. Cryptocurrency Regulations Tighten, Compliance Becomes More Critical

Recently, the People’s Bank of China and other departments issued a joint statement reaffirming that stablecoins are included in illegal financial activities, and will strengthen regulation of virtual currency trading. This indicates ongoing tightening of policies.

Industry insiders say that clearly defining stablecoins means they are not considered legal tender or payment tools but fall under the same virtual asset regulation as Bitcoin and Ethereum. This provides a logical basis for future inclusion of stablecoins in anti-money laundering and cross-border capital flow rules.

Regulators also emphasize enhancing information sharing, improving monitoring, cracking down on illegal activities, and maintaining financial stability. This will impose higher compliance standards on exchanges and project teams.

Analysts note that in this stricter regulatory environment, crypto market players must prioritize compliance, improve internal controls, and strengthen risk management to stay resilient. Going forward, compliance will be the foundation for survival and growth.

Part V. Project Highlights

) 1. Grokipedia: Elon Musk Launches Open-Source AI Knowledge Base Platform

Elon Musk announced on X a new open-source AI knowledge base platform called Grokipedia. Grokipedia aims to be a centralized knowledge repository, aggregating human knowledge organized and presented by AI. The platform allows anyone to freely use and edit content, with corrections made when errors are found to improve accuracy.

The launch of Grokipedia marks another major step in Musk’s AI ventures. Previously, he had invested in AI hardware and software through Neuralink and OpenAI. Grokipedia will directly compete with knowledge base products from tech giants like Google and Apple, challenging existing ecosystems.

Its open-source nature is expected to attract more developers, continuously improving content quality. Grokipedia could also become a key infrastructure for Musk’s future AI products, providing knowledge support for other AI applications. Industry experts believe that the success of Grokipedia will directly influence Musk’s overall AI strategy.

However, Grokipedia still faces significant challenges in content development and AI algorithm optimization. Some skeptics doubt whether it can truly surpass existing knowledge bases, noting that Musk needs ongoing investment in technology and content to stand out.

2. Sui Network Major Upgrade: USDC Peg and Grayscale Trust Launch

Sui Network recently announced two major upgrades: USDC peg and the launch of Grayscale Trust. This signifies further integration of the Sui ecosystem with traditional finance, laying a foundation for future development.

First, SUI, the native asset of Sui, will be linked to USDC, achieving USDC peg. This means SUI’s value will be maintained at a 1:1 ratio with USDC, helping stabilize value transfer within the Sui ecosystem. USDC peg is expected to attract more traditional financial institutions and users.

Second, Grayscale Trust has officially joined the Sui ecosystem, the first institutional-grade investment product provider for Sui. The addition of Grayscale Trust will promote institutional capital inflow and support ecosystem growth.

Both upgrades aim to enhance Sui’s security and credibility, gaining more trust from institutional investors. Sui’s founders say this is a key step toward large-scale application.

Analysts believe that USDC peg and Grayscale Trust will greatly boost Sui’s competitiveness. In the future, with its high performance and low costs, Sui could dominate in DeFi, NFTs, and other sectors. However, large-scale adoption still requires time, and its prospects remain to be further observed.

( 3. Aptos Launches DAO Governance Framework: Community-Driven Ecosystem Development

Aptos recently introduced a DAO (Decentralized Autonomous Organization) governance framework, transferring development decision-making power to the community. This is another major innovation following its technical upgrades.

Aptos DAO consists of token holders and ecosystem contributors, who can propose and vote on key issues like ecosystem development and fund allocation. Decisions are executed automatically via smart contracts, ensuring transparency.

Aptos’ founder stated that the DAO governance aims to decentralize the ecosystem, preventing any single entity from having absolute control. Engaging the community in decision-making better reflects the principle of “for the community.”

Industry experts see Aptos DAO as a positive exploration of blockchain governance. Compared to traditional centralized models, DAO maximizes decentralization, supporting long-term ecosystem growth.

However, DAO governance also faces risks, such as uneven voting power distribution and potential manipulation. The Aptos team must address these issues. Only by solving them can DAO governance truly function.

Overall, the launch of Aptos DAO governance marks an important step toward decentralization. Future challenges include balancing pros and cons and driving ecosystem development on this basis.