Pantera: 2025 will be the year of structural progress in the crypto market

Source: Pantera Capital December Blockchain Letter; Compilation: Golden Finance

A Year of Structural Progress

Author: Erik Lowe, Head of Content at Pantera Capital

Considering people’s expectations for 2025—finally a government that supports cryptocurrencies, Gary Gensler’s resignation, potential rate cuts—Bitcoin’s 25% rise since the presidential election might seem disappointing. In mid-July, Kalshi predicted a 53% chance of Bitcoin reaching $150,000 in 2025.

This is reminiscent of Peter Thiel’s famous quote: “They promised us flying cars, and all we got were 140 characters.”

While BTC prices may not meet expectations, 2025 has seen more structural advancements in cryptocurrencies than any previous year.

Setting aside prices, here’s what we’ve actually gained:

• Supportive governments for cryptocurrencies
• White House AI and Cryptocurrency Affairs Lead and a working group focused on digital asset markets
• Gensler’s resignation
• Pro-cryptocurrency US SEC Chairman Paul Atkins
• Repeal of SAB 121 bill—removing barriers for financial institutions offering crypto custody services
• Establishment of a US strategic Bitcoin reserve and digital asset reserve
• US SEC withdrawal of multiple major crypto lawsuits
• Coinbase included in the S&P 500 index—becoming the first crypto-native company to earn this honor
• Robinhood launching tokenized stocks
• Stablecoin legislation signed into law
• Market Structure Act passed in the House
• Solana and XRP ETFs
• Nine blockchain companies listed
• Vanguard canceled its ban on crypto ETFs, opening trading for 50 million clients and $11 trillion in assets
• US SEC Chairman Paul Atkins announced an “Innovation Exemption” plan for crypto products
• On-chain real-world assets (“RWA”) value increased by 235%
• Stablecoin market cap increased by $100 billion

From this perspective, we believe 2025 is the most important year for the entire industry. This year, we began laying a solid foundation to support sustainable long-term growth.

Next, Pantera’s Chief Legal Officer Katrina Paglia will delve deeper into these structural developments, providing a comprehensive update on the latest in crypto regulation and policy.

Crypto Regulation and Policy Updates

Authors: Pantera Chief Legal Officer Katrina Paglia and Platform Manager Andrew Harris

As in previous years, we aim to provide the latest report on key policy and regulatory developments in the crypto asset space, especially as 2025—an year of profound change in US crypto regulation—approaches. Since the Trump administration took office, US crypto policy and regulation have undergone a near-complete transformation. Actions by regulators like the SEC and CFTC, as well as the executive branch, indicate a new, more positive approach toward cryptocurrencies is taking shape. Below, we explore the main administrative, regulatory, and legislative initiatives shaping the policy environment in 2025.

President’s Digital Asset Working Group

Just days after President Trump took office, an executive order was signed to “clarify” regulatory rules for crypto assets. This order established the “Digital Asset Market President’s Working Group,” chaired by AI and crypto czar David Sacks, with members including the Treasury Secretary, SEC Chair, CFTC Chair, and other agency heads.

The task of this working group is to review existing regulations and propose reforms to foster the development of digital assets. In July, the group released a comprehensive report titled “Strengthening America’s Leadership in Digital Financial Technology.” The report offers 100 policy and legislative recommendations on digital asset market structure, banking and digital assets, stablecoins and payments, combating illegal finance, and taxation. Notably, it distinguishes between security-type digital assets (regulated by the SEC (SEC)) and non-security digital assets (regulated by the CFTC). This marks a significant shift from the policies of the Biden era, when the SEC classified most crypto assets as securities.

As we will discuss below, the SEC and CFTC have already begun acting on the recommendations from this report.

SEC, Crypto Working Group, and Crypto Projects

Shortly after President Trump’s inauguration, then-SEC Acting Chair Mark Uyeda established the “Crypto Working Group” within the SEC, aiming to develop a “comprehensive, clear regulatory framework” for crypto assets. Led by Commissioner Hester Peirce, the group seeks to create a “reasonable regulatory pathway,” contrasting sharply with the previous enforcement-led approach of the SEC.

In August, SEC Chair Paul Atkins delivered a milestone speech, declaring that most crypto assets are not securities, and announced a plan called “Project Crypto.” Atkins outlined five key elements for crypto projects:

• Establishing a clear regulatory framework for crypto asset distribution in the US
• Ensuring free choice between crypto trading venues and custody providers
• Embracing market competition and fostering “super apps” that, under a single, efficient licensing structure, can offer a range of crypto services and assets (including securities and non-securities)
• Supporting on-chain innovation and decentralized finance (DeFi)
• Innovation exemptions and commercial viability

ICOs, Securities Status, and Crypto Asset Distribution: Is the Tunnel at Its End?

The biggest regulatory risk for US crypto market participants often revolves around whether a crypto asset qualifies as a security or is offered to US investors via securities offerings. Under the previous administration and Gensler’s leadership, the SEC viewed most crypto assets as securities and adopted what many see as an “enforcement” approach against issuers and market participants. This led many crypto issuers to relocate abroad, issuing assets through foundations established in jurisdictions like the Cayman Islands, Panama, or others. Many exchanges restrict US users, and numerous crypto companies have limited or ceased interactions with US customers.

Under Atkins’ leadership, the SEC has taken a markedly different approach. The current SEC has dismissed multiple cases against crypto platforms and issuers and established a new, less restrictive classification system dividing crypto assets into four categories:

• Digital commodities, whose value and functionality are linked to well-developed decentralized protocols, rather than to management’s promises or ongoing efforts by the issuer
• Digital collectibles or tokens, such as NFTs, intended for collection
• Digital tools with practical use, such as access rights, credentials, or identity features
• Tokenized securities representing traditional securities or financial instruments (e.g., equity or debt), which remain subject to securities laws

Even before the SEC Chair announced this four-tier classification, SEC staff had begun signaling this stance through no-action letters and statements. In 2025, SEC staff issued guidance indicating that US fiat-backed stablecoins and meme coins are not securities, and protocol staking and liquidity staking are also not securities.

There is strong reason to believe that in 2026, the SEC will continue to adopt a relatively lenient stance on crypto regulation and will establish key elements of a regulatory framework for onshore issuance of network tokens and other crypto assets.

Rise of Prediction Markets

In 2025, prediction markets will emerge and gradually gain regulatory acceptance. Prediction market platforms allow users to express views on real-world outcomes through event-based contracts. These contracts pay out in full to winners, while losers receive nothing. A key milestone was when Kalshi, one of the earliest US-based prediction markets, won a legal battle with the CFTC and was authorized to operate as a designated contract market regulated by the CFTC, offering contracts related to elections and other events.

Since Kalshi’s victory, interest in prediction markets has surged, with more platforms gaining federal approval, and traditional financial and consumer platforms entering the space (e.g., Robinhood). Although regulatory treatment remains uneven—especially under certain state gambling laws—prediction markets are increasingly viewed as a legitimate financial infrastructure. Notably, some platforms are exploring tokenization or crypto-based implementations, further integrating prediction markets with digital asset infrastructure. Coinbase’s partnership with Kalshi highlights this trend, which is likely to continue into 2026.

Latest Litigation Developments to Watch

Dismantling Coinbase and other crypto-related lawsuits—In 2023, the SEC filed significant lawsuits against Coinbase in the Southern District of New York and against Binance in the District of Columbia, accusing them of multiple violations, including unregistered broker-dealer, exchange, and clearinghouse activities, as well as unregistered securities offerings through staking services. In Q1 2025, the SEC reached joint agreements with Coinbase and Binance to dismiss all charges against both.

The SEC also dismissed ongoing enforcement actions against other crypto market participants, including Kraken, Consensys, Ripple, and DRW Cumberland. The SEC stated that dismissing these pending enforcement actions is part of its ongoing reform of crypto regulation, not based on substantive assessments of the allegations.

The SEC’s new Office of Crypto and Emerging Technologies reflects this regulatory shift, replacing the previous Office of Digital Assets and Blockchain. The new office will focus on fraud and misconduct, including blockchain-related scams and those involving emerging technologies like AI and machine learning.

( Outlook: New Developments in Crypto Regulation Under the Trump Administration

While the shift in crypto policy environment is real and clear, some regulatory and legislative developments to watch closely as 2026 approaches include:

The GENIUS Act—Any discussion of 2025 must include the “Guidance and Establishment of a US Stablecoin Innovation Act” (GENIUS Act), the first significant federal crypto legislation. It gained bipartisan support and establishes a regulatory framework for “payment stablecoins.”

Under this bill, payment stablecoin issuers are generally limited to: )1### US-licensed or (for certain issuers) state-licensed qualified US entities; or (2) non-US qualified entities registered with the Office of the Comptroller of the Currency (OCC) and subject to similar regulatory regimes (as determined by the Treasury Secretary). The bill imposes licensing requirements on issuers and mandates compliance with prudential and consumer protection standards similar to banks, aiming to increase transparency of reserves and reduce potential risks. Payment stablecoins do not include “algorithmic” stablecoins, and issuers will be prohibited from paying interest to stablecoin holders. The consultation process for this bill has begun, and provisions such as banning interest payments may spark controversy.

Comprehensive Crypto Legislation—Unlike the GENIUS Act, broader crypto market structure legislation remains a work in progress in Congress. The “Digital Asset Market Transparency Act” (referred to as the CLARITY Act) was passed with strong bipartisan support in the House in July 2025 but has yet to advance in the Senate. The CLARITY Act allocates jurisdiction over “digital commodities” to the CFTC, and “restricted digital assets” to the SEC. It also establishes a temporary registration pathway until the SEC and CFTC finalize rules, and stipulates that once a network is decentralized, assets can transition from securities to digital commodities. Despite a slowdown caused by government shutdowns, high hopes remain for comprehensive crypto legislation in 2026.

Real-World Assets, Tokenization, and New Frontiers—In 2025, tokenization of real-world assets continues to develop. Unlike “native crypto” assets, tokenization of real-world assets involves placing existing traditional assets on the blockchain, sometimes with fractionalization. Asset types include precious metals, commodities, government bonds, and private equity interests. Recently, Nasdaq submitted a proposal to the SEC to enable trading of existing stocks via tokens. This proposal has attracted widespread attention, and the SEC has expressed willingness to consider requests for tokenized trading of traditional listed securities.

We will strive to keep our LPs and the broader community informed of these structural changes and emerging initiatives. We look forward to developments in digital asset policy and regulation in 2026.