2025’s Top 5 Crypto and Travel Rule Predictions

The predictions for 2025 can be divided into 2 parts: regulatory and digital asset trends. On the regulatory front, we predict an increase in cybersecurity-focused frameworks and forced Travel Rule implementation in third-country countries due to the TFR. Trend predictions include even more self-hosted wallet adoption, bitcoin’s continued growth and adoption as an investment tool, and USDT’s continued dominance as the leading stablecoin.  

Below, we discuss these predictions in further detail. 

2025’s Regulatory Predictions

Increased Regulatory Overview of Cybersecurity 

To operate in the EU, a CASP must become licensed under MiCA, and therefore, comply with the Digital Operational Resilience Act (DORA). DORA has 2 objectives: to enhance the financial sector's resilience to ICT-related incidents and to harmonise risk management regulations across the EU.

However, DORA is not the only example of a cybersecurity regulation. In the US, the SEC released its own cybersecurity rules, which will take effect at the end of 2024. Like DORA, the SEC Cybersecurity Disclosure Rules mandate a detailed reporting of cyber risks and incidents and promote transparency and risk management. 

We expect cyber attacks to become more sophisticated and frequent, driven by society’s increased use of digital platforms. As a result, more cybersecurity regulations will be drafted in the near future, and existing frameworks will be updated to ensure robust cybersecurity practices.  

Forced Travel Rule Implementation 

With the implementation of the Transfer of Funds Regulation (TFR), many countries wishing to continue transacting with the EEA may be forced to adopt the FATF Travel Rule to continue to do so. Moreover, big financial players like Switzerland, the UK and the USA further push this need with their respective Travel Rule implementations. 

What’s more, many countries will follow the FATF’s guidelines to remain part of the international financial system and not move to the FATF’s Grey List. For example, South Africa, previously marked grey by the FATF, has shown attempts to escape this title with its April 2025 Travel Rule implementation date. 

2025’s Digital Asset Trend Predictions

Increased Self-hosted Wallet Usage Due to the TFR  

There has been a significant shift from holding digital assets on exchanges (CASPs) to using self-hosted wallets. A study done in August 2024 showed that 99,308 BTC had been moved off exchanges, with withdrawal numbers only increasing. This leaves around 2,679,880 BTC held on these platforms—the lowest since November 2018. 

It is anticipated that these withdrawals were related to 

• The increase in hacks and data breaches resulted in a lack of trust in centralised exchanges.  

• The growing implementation of the Travel Rule regulation. With its implementation, many crypto users are moving their assets off exchanges as the regulation limits the ability to transact freely.

With the implementation of the TFR on 30 December, we expect this number to increase even more. Reasons include: 

• The TFR’s data requirements hinder privacy.

• Due to these data requirements, some users can be subject to the freezing of their assets or the return of transactions due to failure to comply, so they may opt for self-hosted wallets to hold their assets. 

• CASPs must report transactions to comply with the TFR. To avoid this transaction scrutiny, some crypto users prefer self-hosted wallets. 

Increased HODLing

Experts suggest that bitcoin will continue to follow its bullish trend and reach a new all-time high of USD 120 000 in the first quarter of 2025, with some enthusiasts suggesting USD 180 000. Therefore, it is no surprise that bitcoin owners will continue to HODL at the current price. With 2024’s bullish trend, what has changed is the increase in bitcoin adoption and its use as an investment tool by newer and less “experienced” holders. 

Over the last 2 years, many exchanges have seen significant withdrawals. In the past, withdrawals like these suggest growing confidence in bitcoin as a hedge against inflation and a secure investment, potentially raising its value. By removing bitcoin from exchanges, there is a decrease in liquidity on exchanges, bolstering bitcoin’s role as a long-term investment tool. 

As more bitcoin is moved off exchanges to self-hosted wallets, it can be speculated that these funds are being stored as long-term investments. This behaviour suggests confidence in the currency as an investment asset rather than a tool for trading, demonstrating bitcoin’s functionality as a hedge against inflation of future value appreciation. Moreover, this movement reduces the risks associated with keeping assets on exchanges (hacks, thefts, etc), successively increasing investor confidence in the asset and, therefore, becoming more inclined to invest. 

Additionally, with the approval of bitcoin ETFs and increased regularity clarity (like the EU’s TFR), many financial institutions are likely to increase their involvement in bitcoin to provide access for traditional investors, again, boosting bitcoin’s reputation as a long-term investment. With the increased support from financial institutions, retail investors are more likely to hold bitcoin than trade it. 

USDT Stablecoin Dominance 

Tether is the top stablecoin because of its long track record and the fact that it is pegged to the USD. With the recent US election, the dollar has strengthened, further strengthening the value and trust in its pegged stablecoins. These increases could push Tether even further as the preferred stablecoin, increasing its use in transaction volume. With this growth, the asset could become essential to global finance. 

Parting Thoughts

2025 predicts an increased adoption of self-hosted wallets, pushed by implementing the TFR. Regulators are tackling growing concerns regarding cyber risks through regulations and heightened frameworks. 

As bitcoin continues to gain traction as a long-term investment and stablecoins like Tether solidify their dominance, 2025 promises to be a transformative year for crypto, with innovation and regulation shaping its future.

Stay up to date with crypto trends and news like this - sign up for our monthly newsletter.