Where to for crypto in 2025?

Crypto adoption will continue to grow in Australia as accessibility improves
Widespread industry support for clearer regulations will drive industry growth, and create job and education opportunities in blockchain
Crypto price swings to decrease in 2025 as the market matures and institutional demand rises

Special Report: After a long crypto winter, interest in cryptocurrency is at all time highs, driven by the recent market rally. What now concerns traders and industry professionals alike is where we go from here. Will the momentum continue or is there volatility ahead?

Nobody knows for certain. But that doesn’t mean we can’t make some informed guesses. Here are some things we expect to see in the world of Australian crypto during 2025.

Even more Aussies will invest in crypto

Crypto is now for regular Joes, not just ‘crypto bros’. Our research reflects that it is increasingly accessible and continues to fill a need for people that are underserved by the existing financial system.

In 2025, we expect the number of Australian investors to continue growing, as more people begin to understand the value proposition of cryptocurrency and blockchain and the advantages it has over some traditional financial products. People are also attracted by the potential returns and are coming to accept the volatility of cryptocurrency as an investment class (more on that later).

A survey of crypto investors commissioned by Kraken in late 2024 revealed that investors see crypto as a useful financial tool, with ease of use, fully digital payments and lower costs/fees cited as the top benefits.

The research also found that wealth building was the number one reason people buy crypto assets, with portfolio diversification and belief in crypto as the future also polling strongly.

2024 has seen a global resurgence of institutional interest in crypto spurred by the launch of crypto-based ETFs and the launch of more tailored services such as Kraken Institutional.

We expect the level of institutional investment in crypto to continue to grow in 2025, as fund managers come to appreciate the potential of crypto assets for investment returns and as another avenue for portfolio diversification.

Regulation and familiarity will encourage crypto investment

Greater regulatory clarity in 2025 will open the door to more Australians feeling comfortable with investing in cryptocurrency.

Kraken has long advocated for bespoke regulation in Australia, believing strongly that a consistent regulatory framework that brings crypto into line with other financial products will give people more confidence in the asset class.

As noted earlier, we are already seeing increased interest thanks to both the recent market rally, and a suite of new products that make crypto more accessible for both retail and institutional investors, which allow people from all walks of life to dip a toe in the water before making a direct investment.

Additionally, we anticipate there will be demand fuelled by the continuing growth in the number of people who understand the convenience, speed of transaction and lower transaction costs that come with direct payments through cryptocurrency and blockchain, allowing them to cut out financial middle men.

Improved regulation will provide a framework that will allow the industry to grow, leading to local job opportunities and greater economic activity and productivity in the sector.

Growth in the job market will also lead to greater demand for education, so we also anticipate an expansion in the availability of cryptocurrency and blockchain related subjects at Australian universities.

This will help create a positive feedback loop for the industry, making it a more attractive career path for young Australians, further driving the expansion of the industry.

Price volatility of mature cryptoassets should continue to decline, even as prices rise

Crypto has long been perceived as volatile – although many investors will scramble to add that this is a feature, not a bug. However, it’s worth remembering that this volatility isn’t an immutable characteristic, and has actually steadily decreased as the industry has matured with institutional demand.

A Fidelity Investments report explained that Bitcoin’s price has been less volatile during 2024 than many popular S&P 500 stocks, including Tesla, Meta and Nvidia.

In the same way that gold’s high volatility subsided as its market matured, we should expect that blue chip digital assets such as Bitcoin, will become less volatile as time goes on.

This article was developed in collaboration with Kraken, a Stockhead advertiser at the time of publishing, and was written by Kraken managing director for Australia and rest of world Jonathon Miller.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.