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Corporate treasury and cryptocurrencies: A defining topic for 2025

This is the second of a four-part article series

In this second segment of our four-part article series, we focus on the growing spotlight on cryptocurrencies, which are gaining traction in corporate finance and treasury discussions. With 2025 poised to be a transformative year for their broader institutional acceptance, the data suggests that the trend is only accelerating.

According to The State of Global Cryptocurrency Ownership in 2024 report by the cryptocurrency payments company Triple-A, there are an estimated 560 million crypto holders worldwide as of 2024, representing approximately 6.8% of the global population.

“With a compound annual rate (CAGR) of 99% the growth in ownership of cryptocurrencies far exceeds the growth rate of traditional payment methods, which average at 8% from 2018 to 2023”, Triple-A reported.

The lure of cryptocurrencies

“Digital assets have witnessed rapid growth albeit from a small base. Growth has come both from native crypto coins like Bitcoin and Ethereum, as well as stablecoins,” according to the U.S. Treasury Department’s Fiscal Year 2024 Q4 Report. The document added: “To date, household and industry adoption of cryptocurrency has been limited to holding digital assets for investment purposes.” But that could change this year.

During his keynote address at the Bitcoin 2024 conference in July 2024, US President-elect Donald Trump  promised to make the United States “the crypto capital of the planet” and to create a US bitcoin "strategic reserve.”

Another indication of Trump’s intent to support cryptocurrencies came in the first week of December 2024, when he selected cryptocurrency advocate Paul Atkins to serve as Chairman of the Securities and Exchange Commission (SEC). Additionally, he named David Sacks, a former PayPal executive and venture capitalist, as the “White House AI & Crypto Czar.”

The announcement came a day after the world's largest, oldest, and best-known cryptocurrency, Bitcoin surpassed US$100,000 on growing investor optimism about a more crypto-friendly White House regime under Trumps’ leadership.

On December 10, at the Bitcoin MENA 2024 conference in the United Arab Emirates, Eric Trump stated that his father would be “the most pro-crypto president in the history of America.” A few days later, Donald Trump reaffirmed his support for a Bitcoin strategic reserve, akin to the nation’s strategic oil reserve, further fueling the enthusiasm of crypto proponents. Hopes of a Bitcoin strategic reserve, led to Bitcoin scaling past $107,000 to reach a new all-time high by mid-December.

“Long leading the way in corporate cryptocurrency adoption, MicroStrategy marks territory as an early and active Bitcoin adopter when the corporation moved a significant amount of its treasury assets into Bitcoin, therefore establishing Bitcoin as a main reserve asset, and starting its first adventure with the cryptocurrency in 2020”, Jim Osman, a finance expert, wrote in his Forbes article published on December 24, 2024.

Last week, according to an article published in Yahoo Finance, MicroStrategy made “A significant move to start 2025 by announcing the purchase of 1,070 BTC (Bitcoin) for approximately $101 million. This acquisition, completed Dec. 30-31, 2024, brings the company's total Bitcoin holdings to 447,470 BTC. MicroStrategy’s total investment in Bitcoin now amounts to about $27.97 billion, with an average purchase price of $62,503 per Bitcoin.”

In fact, the number of BTC in corporate treasuries grew by 31% in 2024, reaching 998,374 BTC, according to BitcoinTreasuries. “This surge in corporate adoption was further facilitated by new guidelines from the U.S. Financial Accounting Standards Board, which allowed companies to report crypto holdings at fair market value”, Forbes reported in an article published this week. 

Moreover, the world's largest asset manager, BlackRock, has further bolstered the case for Bitcoin's inclusion in corporate balance sheets. The launch of BlackRock’s iShares Bitcoin Trust (IBIT) in January 2024 marked a pivotal moment for the cryptocurrency. In fact, as Yahoo Finance has recently noted, IBIT “Smashed industry records in its launch year of 2024. In just 11 months, it grew to a behemoth with more than $50 billion in assets. Simply put, no ETF has ever had a better debut.”

The institutional embrace of Bitcoin, reflected in BlackRock’s spot Bitcoin ETF (exchange-traded fund) that invests directly in Bitcoin, “Proved to be a turning point for Bitcoin itself”, as per Yahoo Finance.

This institutional shift is underscored by the fact that “Bitcoin has evolved into a full-fledged financial asset class over the last few years. Its market capitalization of $2.03 trillion places it among the world’s largest assets, and the approval of spot ETFs in the US in January 2024 has bridged the gap between crypto and traditional finance”, as observed by investment research company Morningstar.

The momentum behind Bitcoin adoption is set to drive substantial growth across the cryptocurrency market, potentially reshaping a sector that recently achieved a historic global market capitalization of $3.83 trillion, according to Coingecko.

Although Bitcoin staged an impressive recovery in 2024 and the cryptocurrency narrative continues to gain traction, caution is warranted, as history shows that there has been a high degree of volatility in the prices of cryptocurrencies. Therefore, it may be riskier than traditional asset classes.

Volatility in cryptocurrency markets primarily stems from shifting investor sentiment, lack of regulation, supply and demand dynamics, technological developments, geopolitical risks, and macroeconomic factors.

With major central banks expected to continue easing global monetary policies in 2025, and governments worldwide looking to regulate crypto-assets or strengthen their crypto regulatory frameworks to address significant concerns around cryptocurrencies while fostering their innovative potential, there is optimism that these efforts will drive greater mainstream integration of cryptocurrencies in 2025 and enhance their credibility as a legitimate asset class.

This optimism is further spurred by expectations surrounding the incoming Trump administration, which is anticipated to introduce crypto-friendly legislation. Such regulation is likely to encourage more corporations, financial institutions, retail investors, and sovereign governments to broaden their investment exposure and incorporate cryptocurrencies into their asset portfolios in 2025.

The potential for favourable regulation was echoed by Eswar Prasad, the Tolani Senior Professor of Trade Policy at Cornell University, who told PBS last month, “As the election came closer, it became quite clear that if there was going to be a Trump administration, it would essentially be a much more conducive regulatory environment for crypto.”

Prasad further noted that with the US President-elect appointing crypto-advocates to his administration, “I think it’s clear that this is going to be a period when any regulation related to cryptocurrencies is going to be very favorable to the industry,” adding that these dynamics have “really supercharged cryptocurrencies as financial assets.”

Globally, other regions are also advancing crypto regulatory frameworks to encourage innovation while addressing risks, further boosting the positive outlook for cryptocurrencies in 2025.

The European Union (EU) has taken a significant step by passing the Markets in Crypto-Assets Regulation (MiCA)—the world’s first comprehensive regulatory framework for crypto-assets. MiCA, which came into effect across the EU on December 30, 2024, aims to mitigate systemic risks associated with crypto-assets, ensure transparency, and safeguard investors.

Meanwhile, in Asia, Singapore is emerging as the next crypto hub with its “risk-adjusted” regulatory approach that has helped the country double the number of annual digital asset licenses issued in 2024, as per a recent article in Cointelegraph.

According to Jonathan Levin, CEO at Chainalysis, these global regulatory developments will pave the way for wider crypto adoption among retail and institutional investors alike.

“We can expect to see an increase in adoption from institutional and retail investors over the next year, especially as these regulations bring greater clarity to the industry,” Levin told Cointelegraph.

Levin further predicted that regulatory clarity would lead to an all-time high in daily crypto users and spur growth in institutional offerings such as ETFs.

In conclusion, with BlackRock and Fidelity Investments making a foray into the cryptocurrency space, crypto regulations anticipated to tighten globally, the rapid ascent of Bitcoin's value, the rise of AI-driven cryptocurrencies, more financial institutions projected to play a significant role in legitimizing cryptocurrencies, a pro-crypto U.S. president, the surge in BTC adoption within corporate treasuries, and ongoing technological advancements, these factors collectively indicate that cryptocurrencies will not only emerge as a central topic in business leaders discussions, corporate finance and treasury conversations in 2025, but also that this year could be cryptocurrency’s breakout year for both corporate and retail investors.

While short-term volatility and the risks associated with cryptocurrency investments remain a possibility, the long-term growth opportunities, coupled with accelerated institutional adoption and support, could help stabilize prices and reduce volatility in 2025. These developments could lead to greater integration of crypto into traditional financial systems and encourage more corporate decision-makers to view it as a maturing asset class.

To read the first part of this article series, click here:

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