The cryptocurrency market is experiencing renewed momentum as institutional adoption accelerates and global regulatory landscapes shift. Bitcoin has rebounded to near $95,000 amid growing speculation that major U.S. financial institutions will soon offer digital asset custody services. Simultaneously, Kenya is preparing to legalize crypto assets, signaling a broader trend of national-level acceptance. With macroeconomic shifts, political developments, and evolving investor sentiment converging, the stage is set for a transformative year in digital finance.
Major U.S. Banks Poised to Enter Crypto Custody Market
According to Galaxy Research, four of America’s largest financial institutions—BNY Mellon, State Street, JPMorgan Chase, and Citibank—are expected to launch digital asset custody services in 2025. These banks collectively manage over $12 trillion in assets, and even minimal exposure to cryptocurrencies could significantly impact market valuation.
This development marks a pivotal shift toward mainstream financial integration. For years, traditional finance (TradFi) remained skeptical of crypto’s legitimacy. Now, with regulatory pathways being cleared by bodies like the Office of the Comptroller of the Currency (OCC), institutional participation is transitioning from possibility to reality.
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If just 1% of these banks’ managed assets were allocated to Bitcoin, the resulting demand could elevate its market cap by several multiples. Galaxy Research suggests this institutional wave will catalyze further adoption across wealth management platforms. Analysts predict that at least one top-tier firm will recommend a 2% or higher allocation to Bitcoin this year—mirroring BlackRock’s earlier stance that crypto should be treated like any other strategic asset class.
Beyond custody, the report highlights an emerging geopolitical race among nations to adopt Bitcoin as part of national reserves. While much of the discourse centers on the United States, Galaxy analysts believe Washington may lag behind non-aligned countries and those with substantial sovereign wealth funds. Nations seeking financial sovereignty or diversification away from the U.S. dollar could increasingly explore Bitcoin accumulation strategies.
Ethereum Poised for a Comeback in 2025
While Bitcoin dominates headlines, Galaxy Research forecasts a strong resurgence for Ethereum in the coming year. After years of underperformance relative to BTC, ETH is expected to regain momentum, particularly in decentralized finance (DeFi) applications.
The ETH/BTC ratio—which measures Ethereum’s value against Bitcoin—has been on a steady decline since Ethereum’s transition to proof-of-stake in 2022. It hasn't reached 0.06 since mid-2023 but is projected to surpass that level by year-end after dipping below 0.03 earlier in 2025.
Regulatory clarity could be a key driver. Upcoming policy changes are anticipated to favor Ethereum’s ecosystem, especially its role as the foundational layer for DeFi protocols. Clearer rules around staking, smart contracts, and token classification may reignite investor confidence and capital inflows.
As institutional infrastructure expands, Ethereum’s utility in tokenized assets, programmable finance, and enterprise solutions positions it for long-term growth—even amidst short-term market fluctuations.
Kenya Advances Toward Crypto Legalization
In a significant policy shift, Kenya is moving toward legalizing cryptocurrencies through new legislative frameworks. Finance Minister John Mbadi announced plans to formalize regulations for virtual assets (VAs) and virtual asset service providers (VASPs), marking a departure from the country’s historically cautious stance.
Back in 2015, Kenya’s central bank issued warnings against crypto use, emphasizing that digital currencies were not legal tender and no entity was authorized to facilitate crypto-based remittances. However, grassroots adoption continued to grow—fueled by mobile money penetration and financial inclusion needs.
A December 2024 policy draft outlines a comprehensive regulatory approach aimed at fostering innovation while mitigating risks such as money laundering, fraud, and terrorism financing. The framework seeks to create a fair, competitive, and stable environment for crypto businesses operating in the country.
This shift reflects broader regional trends in Africa, where nations like Nigeria and South Africa have also begun exploring regulatory models. With an estimated 8.5% of Kenyans already owning crypto—among the highest adoption rates globally—the government recognizes the need to balance innovation with oversight.
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Trump Trade Revival Boosts Bitcoin Sentiment
Market dynamics were further influenced by renewed "Trump trade" speculation ahead of his January 20 inauguration. Analysts point to potential executive actions on day one that could reshape U.S. crypto policy.
One key target: reversing President Biden’s veto of bipartisan legislation opposing SEC Staff Accounting Bulletin 121 (SAB 121). This rule requires banks holding crypto on behalf of clients to record those assets on their balance sheets—a major deterrent for institutional participation due to capital reserve implications.
Repealing SAB 121 would lower barriers for banks and custodians entering the space, unlocking vast pools of capital currently sidelined. As FXEmpire analyst Bob Mason notes, such policy shifts could dramatically expand retail and institutional access to digital assets.
Bitwise’s recent survey of over 400 U.S. financial advisors underscores latent demand: only 35% can currently offer crypto investments to clients, despite managing nearly half of American wealth. Yet among those who do offer crypto exposure, 99% plan to maintain or increase allocations in 2025.
Bitcoin Technical Outlook: Stability Amid Volatility
From a technical perspective, Bitcoin shows signs of stabilizing after recent volatility. According to FXLeaders analyst Arslan Butt, derivatives markets reflect cautious optimism:
- Annualized futures premium stands at 11%, slightly above the neutral 5–10% range.
- Perpetual swap funding rates have settled around 0.5% monthly after brief dips into negative territory.
- A critical support zone has formed between $90,000 and $92,000—a level that has held during recent sell-offs.
However, leverage remains a concern. Over $107 million in long positions were liquidated recently, indicating pockets of over-leveraged trading that may need correction before sustained upward movement resumes.
Frequently Asked Questions
Q: What does crypto custody mean for average investors?
A: Institutional custody increases security and trust in digital assets. It enables financial advisors and retirement accounts to include crypto in portfolios, expanding access beyond retail traders.
Q: Why is Kenya legalizing crypto now?
A: Rising grassroots adoption and economic potential have pushed policymakers to establish clear rules. Legalization aims to protect users while capturing innovation benefits and tax revenue.
Q: Could SAB 121 repeal boost Bitcoin prices?
A: Yes. Removing this regulatory hurdle would encourage more banks to offer crypto services, increasing liquidity and investor confidence.
Q: Is Ethereum still relevant amid Bitcoin dominance?
A: Absolutely. Ethereum powers most DeFi, NFTs, and Web3 applications. Regulatory clarity and scaling upgrades keep it central to the ecosystem.
Q: How might national Bitcoin reserves affect supply?
A: If multiple countries begin accumulating BTC strategically, reduced circulating supply could drive prices higher due to scarcity dynamics.
Q: Are we in a bull market?
A: Indicators suggest early-stage bull momentum—increasing institutional involvement, improving sentiment, and strong technical support point to sustained upward pressure.
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Final Thoughts
The convergence of banking adoption, national regulation, and macro-political shifts underscores a maturing crypto ecosystem. As traditional finance integrates digital assets and governments establish clear frameworks, Bitcoin and Ethereum are poised for broader acceptance—not just as speculative instruments, but as foundational components of modern portfolios.
With increased infrastructure, clearer regulations, and growing global participation, 2025 may mark the year when crypto transitions from frontier asset to financial mainstream.
Keywords: Bitcoin, Ethereum, crypto custody, institutional adoption, cryptocurrency legalization, DeFi, SAB 121, Kenya crypto policy