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As we approach the end of Q1 2025
This year hasn’t exactly panned out as many thought it would in the digital assets space. However, if crypto is consistently one thing, it’s unpredictable.
While the market is down, largely due to global economics outside its control, industry optimism remains high, and there are plenty of reasons to support this sentiment. From the high possibility of a pro-crypto regulatory framework in the United States and the continued expansion of DeFi to strategic cryptocurrency reserves and more AI, the industry is maturing and evolving constantly.
While the industry’s natural volatility will remain for the foreseeable future, its maturation is driven by innovation and a stronger, more stable infrastructure. This foundation will allow the industry to focus on addressing challenges and increasing adoption.
Despite the industry’s notorious unpredictability, several possible overlooked trends could have a huge impact on the broader ecosystem.
Emergence of DeFi regulatory frameworks
Regulators have a hard time applying clear rules to DeFi because if a network or protocol isn’t controlled by a single entity, who can the government contact in case of a violation or concern? While DeFi is currently exempt from direct oversight, the US, EU, and UK are exploring ways to legislate this rapidly evolving sector effectively.
In the US, the House of Representatives just last week voted to repeal an IRS rule that required DeFi protocols to report their earnings from crypto sales. This step likely indicates that the Trump administration will lean toward a regulatory outline that will attempt to protect investors without disrupting the decentralized and innovative nature of DeFi.
It’s unlikely that any comprehensive DeFi regulation will be enacted by the end of the year, but a better understanding of what policies and approaches policymakers may take can be expected. DeFi will likely continue to adopt know-your-customer and anti-money laundering processes, as well as a greater emphasis on solutions like zero-knowledge proofs, which could serve as an effective way to enhance DeFi compliance. This is the ideal type of approach as it balances privacy with the need to maintain KYC and AML compliance.
A different kind of TradFi influence
Traditional finance and crypto have been increasingly crossing paths as the former now recognizes the latter as a legitimate asset class. TradFi’s steadily increasing interest in digital assets has partially contributed to a growing awareness of the need for better risk mitigation.
Portfolio diversification is a central pillar of mitigating financial risk and indexes have historically proven to be a more effective investing tool than actively managed funds. As more retail investors enter the space, crypto indexes like J’JO35, which offers exposure to the top 35 tokens by market capitalization, could become a popular choice due to its track record of steady, long-term growth with minimal effort.
While last year saw the introduction of spot ETFs to crypto, 2025 may very well be the year that index investing finally plays a more prominent role in the digital asset ecosystem.
AI and crypto wallets
AI’s expanding role within crypto has been well documented, from AI trading algorithms and compliance to smart contract optimization and beyond. While the crypto industry has been one of the most aggressive industries in its approach to implementing agentic AI, the next big AI use case in crypto may be the use of voice assistants in crypto wallets.
Tether made a splash in February when it announced that it would soon launch a series of AI apps that include an “AI Bitcoin wallet assistant.” This wallet assistant will help users manage transactions, track price changes, and keep funds secure—all via spoken commands. Tether has also introduced an SDK for developers to build customized AI agents for voice-controlled payment solutions.
TOMI, a web3 infrastructure project building a privacy-oriented decentralized internet, just recently launched the first AI-powered voice assistant for a web3 wallet. This addition to the TOMI Wallet offers hands-free engagement with digital assets, enabling an intuitive and smoother user experience. With more AI voice command capabilities coming to other crypto wallets, such as GlobalEth’s SimplifAI demo, this development is part of the broader trend to integrate AI to improve the user experience.