Bitcoin reached its all-time-high of $108,268.45 on December 17, 2024 [File]
| Photo Credit: REUTERS
In the last month of 2024, Bitcoin crossed $100,000 in price.
Crypto price jumps are hard to pin on just one or two factors, but it is safe to say in this case that investors’ excitement played a major role as it became clear that president-elect Donald Trump was returning to the White House in 2025, and that he was taking a less conservative stance with regards to the U.S. crypto economy.
During President Joe Biden’s term, and even during Trump’s first term, activities such as crypto mining and running crypto exchanges/platforms were viewed with suspicion by regulators, Democrats, and Republicans alike. However, in 2024, Trump softened his stance towards crypto. Even conservative political figures have been framing the asset class as a means to help establish U.S. dominance in the fintech sector.
Buoyed by these developments and the promise of change, Bitcoin reached its all-time-high of $108,268.45 on December 17, 2024.
Moving into 2025, let us take a look at several possible developments in crypto that go beyond price jumps and crashes.
WazirX’s legal journey continues
Since the July 18 cyber-attack against the Indian exchange’s multi-signature wallet managed with the company Liminal, WazirX investors have been struggling to get access to their locked up crypto. As they exhaust their own legal options, the exchange is pushing for restructuring in Singapore. Many WazirX investors were forced to miss out on Bitcoin’s price surge in the last two months of the year because of this.
WazirX in December announced that it was working on a restructuring scheme of arrangement in order to help users obtain some recoveries. The exchange urged users to encourage the scheme, or potentially opt for a more uncertain timeline due to the Binance-WazirX legal dispute. It is clear that the restructuring of WazirX will be an emotionally-fraught proceeding for thousands of stranded Indian investors, whose ordeal will continue well into this year.
The complications of the WazirX case will also impact how Indian investors view homegrown crypto businesses. While many Indian crypto exchanges promise world-class trading standards and customer service, the reality is often very different. For example, WazirX rival CoinDCX has restricted one of the most basic functions a user would expect from their exchange: crypto withdrawals. The company cited user safety and legal compliance as the reasons for this policy, and said it was working on a way to enable withdrawals in a phased manner. Another crypto platform, CoinSwitch, also confirmed to The Hindu that it did not allow crypto withdrawals for users.
Once bitten, twice shy, Indian crypto investors in 2025 are more likely to carry out research and assess their options before uncritically trusting an exchange that presents itself as an Indian player.
Trump’s foray into crypto
President-elect Donald Trump is readying to return to the White House, and has appointed several AI and crypto-focused industry leaders and technologists to key posts. Former PayPal executive David Sacks will enter the new administration as the “White House A.I. & Crypto Czar,” while U.S. SEC Chair Gary Gensler, known for taking a hardline stance against crypto entrepreneurs, will step down on January 20.
This has sparked excitement amongst investors, especially those in the U.S. and Asia, leading to huge gains for Bitcoin. Musk’s increasing presence in the new U.S. administration also bodes well for many U.S.-based crypto investors, as he is a supporter of the Dogecoin meme currency
Trump, meanwhile, is affiliated with the cryptocurrency venture World Liberty Financial Inc.
It is unclear how deeply involved the future president will be with the venture once he enters office, and the project itself is still in the starting stages. Even so, this is a sign to many that existing regulations on the asset class could loosen in the future or become more investor and business-friendly.
Crypto regulation on the rise
As crypto investments and businesses become mainstream, it is inevitable that more countries around the world will implement or update their existing laws to regulate the sale of virtual assets and digital currencies.
One major area of concern for Indian investors is the high tax rate on crypto gains, contrasting with little to no support from the government in case of crypto losses due to hacks and scams. 2025 will likely see more discussions about how to treat Indian crypto investors and the ways by which crypto innovation can be used to a country’s advantage.
However, another point that will likely be explored in 2025 is where and how crypto litigation takes place. For example, the Indian exchange WazirX has taken its post-hack restructuring exercise to the Singapore legal system, leaving its Indian customers vexed.
Countries such as the U.S. have a better framework in place to handle crypto-related legal proceedings and extradite those who are key to the trial, but such a system is still lacking in India. Crypto investors are often ruled by the decisions of crypto exchanges, instead of their government and financial regulators.
FTX payment proceedings
The legal proceedings of the collapsed FTX crypto exchange have largely wound to a close, but the question is now how to distribute the recoveries effectively to affected users. There should be more clarity about this in 2025.
The reason this stage of the proceedings is important is because it will lay down a blueprint for the ways in which collapsed crypto businesses can be handled in order to recoup funds and compensate affected investors.
Published – January 08, 2025 02:08 pm IST