The cryptocurrency sector experienced a year of contrasts in 2025, balancing tangible technological progress with significant market volatility. According to Nischal Shetty, Founder of Indian exchange WazirX, the industry presented a cautiously optimistic yet balanced outlook, marked by both foundational advancements and sobering corrections.
Progress and Pitfalls: The Dual Narrative of 2025
On the positive front, the ecosystem saw substantial development. Decentralized Finance (DeFi) projects continued their expansion, while stablecoins achieved broader acceptance and use. Central Bank Digital Currency (CBDC) infrastructure pilots moved forward globally, and developer activity surged, particularly in the APAC region, with millions engaging in on-chain building.
However, this progress was tempered by market realities. Initial retail investor optimism at the year's start was disrupted by a sharp October correction. Shetty noted this event served as a stark reminder that market sentiment remains fragile and that hype disconnected from real utility can damage the industry.
Bitcoin, the market bellwether, felt this correction acutely. The premier cryptocurrency fell roughly 30% from its record highs and was down more than 6% year-to-date as of the report. Trading activity remained subdued, with retail speculation losing significant momentum. Technically, prices broke below the critical 365-day moving average, and persistent selling by long-term holders further pressured the market.
Key Regulatory and Institutional Drivers in 2025
Several major developments shaped the crypto landscape through the year:
The establishment of a US Strategic Bitcoin Reserve early in 2025 underscored Bitcoin's growing strategic importance on a national level.
By mid-year, the enactment of the GENIUS Act provided a clear regulatory framework for USD-backed stablecoins, boosting confidence and paving the way for wider adoption.
In a landmark move on December 4, the US Commodity Futures Trading Commission (CFTC) decided to permit listed spot crypto products on registered futures exchanges. This decision marked a key step in evolving the market from regulated ETFs toward more transparent, cross-border compliance structures, encouraging greater institutional participation.
Outlook for 2026 and the Indian Context
Looking ahead, Nischal Shetty anticipates that global institutional appetite for regulated digital-asset products will continue to grow. This influx of institutional capital is expected to drive further inflows and contribute to overall market stability.
He emphasized that domestic policies will be crucial in shaping local investor sentiment. For India, Shetty highlighted several potential catalysts. The foundation stone for India's CBDC project could be laid soon, marking a significant step forward. Furthermore, the Reserve Bank of India's announcement of an October hackathon aims to nurture tech talent in the emerging technology space, potentially encouraging more Indians to pursue careers in this sector.
Shetty pointed to the need for a clearer regulatory framework for Virtual Digital Assets (VDAs) in India, potentially paired with supportive tax measures. Combining support for stablecoin initiatives with CBDC development, he argued, could unlock real-world blockchain use cases from Indian builders and kickstart significant on-chain growth for the nation.
The year 2025 ultimately served as a period of maturation for the crypto industry, where regulatory milestones and ecosystem development walked hand-in-hand with market corrections, setting a complex stage for the year ahead.
