The 3 Platform Crypto Assets to Outperform in 2025
In this article, we outline the 3 Platform L1 crypto assets we believe will outperform in 2025.
Opening Statement & Table Setting
The beginning of 2025 can be summarized by two opposing trends. One is that for the first time in history, the US has an administration that is pro-crypto. Several pieces of legislation are being worked on as well as a change in how the execution of government entities like the SEC. The second trend is what the crypto market has been experiencing, which is downward pressure primarily due to the threat of tariffs and knock-on effects creating a strong US Dollar.
Here’s a summary of current action by the new administration:
Executive Order on Digital Assets: On January 23, 2025, President Trump signed Executive Order 14178, titled "Strengthening American Leadership in Digital Financial Technology." This order rescinds previous directives, prohibits the establishment of a central bank digital currency (CBDC), and establishes a group tasked with proposing a federal regulatory framework for digital assets within 180 days.
Nomination of Paul Atkins as SEC Chair: The administration has nominated Paul Atkins, known for his pro-crypto stance, to lead the Securities and Exchange Commission (SEC). This move is anticipated to provide clearer regulatory guidelines and foster innovation within the crypto sector.
Proposal of a U.S. Crypto Strategic Reserve: On March 2, 2025, President Trump announced plans to create a U.S. Crypto Strategic Reserve. This reserve aims to include major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), positioning the U.S. as the "Crypto Capital of the World."
Legislative Efforts for Stablecoin Regulation: Senator Bill Hagerty has introduced legislation to bring stablecoins like Tether (USDT) and USD Coin (USDC) under Federal Reserve oversight. This bill seeks to establish a "safe and pro-growth regulatory framework" to enhance the U.S.'s leadership in the crypto industry.
These initiatives reflect the administration's commitment to fostering a favorable environment for cryptocurrency innovation and adoption.
Strong US Dollar
The USD, as measured by the DXY Index, is too strong. That is creating deflationary effects on the global economy. It’s not just the US dollar is too strong, it’s how fast it changed from late last year to late February. Think about the global economic impact when developing nations need to convert their local money into USDs to buy commodities like oil. They buy fewer when the US Dollar is strong, and in turn grow less. Typically, when the DXY is over 106, that has negative effects on risk assets like crypto. And, the crypto market has certainly been under pressure to start the new year. But it appears we’re following a trend we set in 2016 and following it closely, If we copy the whole year, we will have the US Dollar weaken throughout the year in 2025 and that’s good for growth and crypto.
However, in January/February, we started to see a trend reversal where the USD is starting to weaken (see above). It’s still above 106, but retreating from a high of 109.5. And, we expect that to continue. If we can continue the trend change and get a weaker dollar and handle the outstanding tariff issues, that’s when I expect the crypto market to rip higher. We saw it briefly on March 2nd, when altcoins really started to rip higher. But then new tariff threats and implementation killed the brief rally on Monday, March 3rd, and the USD started to strengthen again.
Of the two opposing trends, I believe the strong US Dollar will be short-lived and I think the new administration is going to start delivering news that’s truly going to change the game for crypto assets. We’ve got something with stablecoins that will make using them much easier. We’ve got some policy shift opportunities with how we design our crypto tokenomic ecosystems and several other direct improvements. All with the background of crypto supportive administration and Congress. We’re going to be able to do some amazing things with crypto assets once we can get their structures approved by the administration and Congress alike.