After the crypto industry crumbled in 2022, many thought it could never come back — with regulators bearing down on the market after names like Celsius and FTX lost billions of user assets. But after scoring the approval of spot exchange-traded funds (ETFs) early in the year and making big strides in political acceptance during the 2024 election, the crypto arena has won back the legitimacy it lost. The industry now has everything it wants and needs — is that enough?

SEC-cess: The Trump administration promised to help make America the “crypto capital of the world.” That pitch, and Trump’s subsequent victory, sent crypto assets to all-time highs in anticipation. And now that Trump’s crew is in power, it’s making good on some of those commitments, with the Securities and Exchange Commission (SEC) agreeing to drop lawsuits against top exchanges like CoinbaseCOIN

and RobinhoodHOOD

, signaling that the regulator’s years-long battle with the crypto sector is over.

• The companies characterized their legal battles, which alleged the businesses were selling unregistered securities, as an existential threat to their organizations and the crypto industry.
• In recent weeks, the regulator has cut its crypto unit in half, marking an end to the deep regulation of the business — clearing Robinhood and Coinbase to expand businesses that have boomed in recent months.

But Is That Enough?

Those plans for expansion have already included introducing a wider variety of assets and markets. And on the horizon, both firms have teased tokenization — which could clear the way for assets to be listed on the blockchain — and new stablecoin features meant to keep markets moving. But despite the sector’s significant wins, investors have been facing steep losses.

• Crypto exchange Bybit was affected by a record hack, which saw attackers make off with $1.5B in assets, shaking the broader market and prompting a massive sell-off.
• The crypto scene is now approaching technical bear market territory, with the industry’s total market cap now 21% below its December all-time highs.

Ups and downs: Crypto, famous for being volatile, could always bounce back. However, the wide decline in coin and token valuations comes after a banner year for the marketplace — one which will be hard to repeat in 2025. Increasing the pressures, the crypto arena has seen greater correlation with US equities, which have lost the “Trump Euphoria” and are now struggling amid a row of tariff worries and weaker consumer outlooks. This year, the industry might find it vital to execute its new deregulatory promise, pushing new technology to widen its acceptance and adopt its still-nascent technology. Otherwise, tying its fortunes to its still-speculative nature could risk an unraveling of the sector.