Ho, Ho… Hum (but Adoption Anyway!)
Well, Crypto Santa sure didn’t make it this year. Almost all expectations were that 2025 would leave us in record-breaking territory and staggering market highs. We didn’t. I suppose in some ways we did break-records, however instead of highs and ending in “Ho Ho Ho” we actually ended the (cycle) year for the first time negative, so more of a “Ho Ho… Hum.”
Expectations were lofty because in year four of the traditional four year cycle (and 2025 was year four) Bitcoin has always been positive. Not so, 2025. On the bright side, we did hit all-time highs in 2025, with Bitcoin breaking $125K. However, what looked to be a raging bull leaving the pen in October rapidly turned into a bearish pullback ending in a sidewinding channel to finish out the year in the $85K - $90K range.
Rather than go doom and gloom, I want to begin by expanding on what was discussed last blog with regards to our markets and why I just don’t think this bull is done. Not everything (and in fact rarely anything) hits calendar cycles perfectly. What I think is happening is that we’re seeing a cycle shift. Moreover, I see the road to adoption being paved brightly, which is easy to miss when price has the headlines, so we’ll look at that as well.
The Real Drivers
So the calendar didn’t deliver what everyone expected. That’s okay. I don’t suggest anyone read too much into that. The fact is, what really held things back comes down to liquidity and, by extension, the business cycle. One of the cleanest ways to see that cycle in real time is through the ISM, which is simply a monthly read on whether businesses are expanding or pulling back. And in 2025, with all of the tariff-on, tariff-off, WTF-is-happening-next noise, ISM was telling a pretty consistent story. Everyone was a little nervous. Activity was constrained. No one had real confidence. And as such, the cycle was suppressed.
The main driver for this is liquidity, and money just wasn’t flowing the way it needs to for risk assets to really run. Quantitative tightening did exactly what it was supposed to do. It slowed things down, tightened financial conditions, and kept capital on the sidelines. What matters now is that backdrop has changed. QT is over. We also had a rate cut in December, it sure looks like more are coming, and QE in some form or another is clearly back on the horizon. Historically, when that happens business activity improves — liquidity opens up, capital moves back out the risk curve, and crypto markets tend to respond big time. As a case in point, the Fed has already, as of December, started buying up $40B in treasuries. Now, this isn’t “typical” QE, it’s liquidity management, but it accomplishes the same purpose. It’s a drop in the bucket to be sure, but first steps are… first steps. What’s important about this is it looks like liquidity and the ISM has really have been driving Bitcoin’s moves this all along, they just happened to have been on a four year cadence which echoed the Bitcoin four year cycle. Now, that’s shifting.
This is why I simply don’t agree with the four-year-cycle calendar jockeys. The cycle isn’t over — it’s just a little late. And now, though delayed, as liquidity opens up we would expect to see the business cycle start to open up. This then would lead 2026 to be the year that finally delivers what so many expected to see in 2025.
Allocate Anyway
And, we can look forward to the future, but the fact is 2025 was rough for crypto markets. Given that it might surprise you to see crypto adoption being endorsed at a whole new level… and that’s exactly what we are seeing. Rather than use this “cycle shift” as an excuse to pull back, the big boys are actually pressing forward (which is another bullish signal).
Bank of America, for example, has suggested a 1% - 4% allocation to crypto for its wealth management clients. Specifically, it is allowing allocation to four of the Bitcoin ETFs. While I would personally still prefer to see investors hold the asset directly, it signals a major state change and has BofA joining other institutions in considering crypto allocation. Specifically, Morgan Stanley, suggests 2%-4%, BlackRock 1%-2% and Fidelity even stretches to 7.5% for younger investors. 7.5%! Not so fringe anymore, is it?
This is really important because throughout this year I’ve been pointing out that we have been in a unique period which I call “Acceptance without Adoption.” More specifically, this industry has been accepted by government, enterprise and Wall Street, but the reality is that there’s not a lot of actual general adoption (we discussed this last month!). But now it sure looks like the pipes are opening up to facilitate just that… adoption on a larger scale.
Not to be left out, Vanguard, who has typically been 100% anti-crypto of all forms, did a stark U-Turn and will now allow its more than 50 Million clients a path to gain exposure to digital assets. Oh how the mighty pivot, as this firm previously actively blocked Bitcoin ETF allocation. They were the last bastion of the big boys fighting this wave but with this the signal is clear: they didn’t want to get left behind. Importantly, all of this feeds into the next phase of the demand wave that we’ve been expecting. Now that virtually every major player on the block is now endorsing this asset class, it’s time for Main Street to really get on board. This, of course, is just in time for 2026 and as noted above what I expect to be the next big leg.
Strategy’s Strategy
Michael Saylor’s venerable Strategy (formerly MicroStrategy) has been out on a limb singing the adoption hymnbook for a while. Saylor, who jumped into the pool in 2020 with Strategy’s first $250M purchase, has been not-so-quietly accumulating and has built up a staggering treasury of 672,500 BTC as of the end of the year. With Bitcoin closing 2025 at $87,500, that brings the treasury’s value to a modest $54 billion and his average price to roughly $75,000 per coin as of year-end. Now, Saylor has been doing these purchases partially through equity and partially through debt, and Strategy’s haters have been eagerly anticipating a market pullback that would have Strategy’s veritable roof collapse under the weight of its debt service.
However with a mighty, meh Saylor quieted his critics with the launch of a $1.44 Billion dollar USD reserve, designed specifically to address debt service and liquidity management just in case this bull (or any bull) doesn’t run as fast as expected or has the volatility that we all know bulls can have. This is genius in my opinion and creates an actual insurance policy against volatility, protecting his company and his investors. Remember, Saylor has called for $1M Bitcoin in the coming years and while fellow bulls argue whether or not that is going to be 2028 or 2033, I argue, does it matter? He has continued to put his money where his mouth is by purchasing another $1B in Bitcoin in December. He’s bolstered the fortress. He’s all in.
International Angles
Meanwhile, overseas it appears that Japan could spark a crypto boom. Japan has traditionally had a 55% taxation on crypto assets but in 2026 is moving to a flat 20%. This I believe will also drive retail adoption as it makes it much more palatable from a taxation perspective. Importatnly, it could send signals to other governments as well.
And Japan isn’t the only country adjusting policy to embrace crypto. In December, Singapore was ranked the #1 nation globally for crypto adoption based on usage and regulatory clarity, signaling that policy frameworks and markets are maturing beyond early adopter economies. Countries around the world have forwarded stablecoin and digital-asset regulatory regimes, with over 70% of the top jurisdictions progressing stablecoin regulation in 2025. In addition, even traditionally closed economies like Turkmenistan moved to legalize mining and crypto exchange operations. Meanwhile, the UK came out and passed a law formally noting that digital assets are actually personal property, joining Dubai and India in this designation. Just one more example how this is getting more and more real throughout the world.
The point of all of this, dear reader, should be obvious. While 2025 has been the year of acceptance, the floodgates are opening up to 2026, which could well be the first year of real widespread adoption.
blockchAIn
One of the things that I think is important is to keep an eye on how blockchain, (with or without AI) is being implemented in business. This blockchain and AI connection is something we’ll explore in great detail over 2026, but to close out 2025 I wanted to note another recent blockchain implementation that will transform the TradFi markets.
It’s well known that Jamie Dimon has been anti-bitcoin and a naysayer of the space until recently. Well, right on cue, in December Dimon’s own JPMorgan Chase rolled out its first tokenized money market fund, built on the Ethereum blockchain. This is a real-world use case of blockchain technology and just one more data point showing us that blockchain adoption is happening (even by those who have been naysayers!) By the way, in rolling this product out they beat BlackRock to market. I noted in the October Crypto: Decrypted that Larry Fink of BlackRock wants to tokenize everything. It seems, however, JPMorgan has now thrown the first punch as they are now running with a real-live product. Sure looks like BlackRock is in for some “friendly” competition, and it will be interesting to see how this unfolds in 2026.
Back to JPMorgan, it also shows their ongoing commitment to this space. Earlier in Q4 the TradFi giant announced that they would allow Bitcoin and Ether to be used as collateral for lending. This was targeted for launch in December and, while it doesn’t seem to be live quite yet, the fact that it is coming is huge.
One of the stumps that I constantly pound on, and strongly believe, is the value of holding the actual commodity vs. the ETF. This is one of the reasons. If the value of a Bitcoin (or other crypto asset) continues to grow based on the demand wave (as noted by the pundits above) then holding the commodity over time makes sense. But, what if one needs (or wants) to access some liquidity around the asset? Selling the asset to realize liquidity has two downsides. You no longer hold the asset, and you have a taxable event. If one holds the actual commodity however, as opposed to a synthetic like the ETF, you now have more options. In this case, collateralized lending by a major player allows access to this liquidity without a taxable event while it allows the underlying asset to grow. It’s the best of both worlds.
This is a classic technique used by the wealthy and it translates here very well. Certainly, there have been smaller niche players that allow this, but a global juggernaut like JPMorgan allowing this? It’s groundbreaking, forward-thinking, and a sign of what’s to come in 2026 and beyond, and just one more element that will drive adoption of the asset.
In Closing
Good riddance 2025. You weren’t the year we expected from a price action standpoint, though certainly blockchain and crypto gained ground in government, industry and Wall Street. Now, it looks like Main Street is coming. Old guard institutions are changing their tune. Banks and wealth managers are giving the green light. And governments worldwide are clearing the way for the coming Demand Wave. Because of this I’m bullish for 2026 and beyond. From my vantage, the next phase of adoption is upon us.
With that, we’ll close out here for now. Until next time be well, stay safe, and I’ll keep Decrypting Crypto for you!