Blockchain & Digital Assets: Clarity, capital, catalysts

Hot topics

Here is an update of the hot topics presented in our 2025 outlook.

Regulatory developments

The year's first half marked a historic shift in U.S. crypto regulation. The Trump administration issued a suite of executive orders signaling a pivot from enforcement to integration. The establishment of U.S. crypto strategic reserves captures the positive momentum. While some may argue that the reserves do not directly intervene in markets, few would have predicted such rapid developments just 12–18 months ago.

The SEC dropped all legal actions primarily targeting exchanges over the sale of unregistered securities. In parallel, Congress has made real progress on legislation. A bipartisan bill providing clarity on digital asset oversight, delineating responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC), is expected to pass soon. This will ultimately increase investor confidence and enhance market stability.

Clear rules for stablecoin issuance are also expected shortly. We cannot emphasize enough how critical this is: stablecoins could unlock mass adoption of tokenized cash. The U.S. is on the verge of establishing a legal framework for what could become crypto’s first trillion-dollar use case. Payments will increasingly rely on blockchain rails, disrupting the entire payments industry, which has multiplied its initiatives in this space. The success of the IPO of Circle Internet Group is not a surprise in this context.

Together, these shifts signal a coordinated move toward institutionalization of the asset class and mainstream adoption of the technology. Regulation is no longer seen as an obstacle, but as a launchpad for crypto's next growth phase. 

Ethereum developments

Ethereum continues to demonstrate why it is the foundation of the digital infrastructure of the future. The Pectra upgrade went live in May, improving user experience, scalability, and staking on the protocol.

Looking ahead, the next upgrade, Osaka, is set for late 2025 or early 2026. It is expected to introduce partial statelessness (reducing storage requirements), proposer-builder separation (enhancing competition in block construction), and single-slot finality experiments (accelerating block finalization). Beyond the technical aspects, these concepts will improve the protocol’s efficiency, security, and scalability.

These improvements are critical to support upcoming applications. For instance, the tokenization of real-world assets (RWAs) is gaining significant traction. BlackRock Inc’s BUIDL, Franklin Resources Inc’s BENJI, and Société Generale's tokenized T-bills are just the beginning.

New use cases are also emerging. Gensyn, an "AI x crypto" project (i.e., combining both crypto and AI technologies), chose to build on Ethereum to benefit from its security model while customizing compute logic off-chain. This underscores Ethereum’s role not just as a blockchain, but as a trust anchor for the next wave of decentralized infrastructure.

What about Bitcoin’s 4-year cycle?

We're more optimistic now than we were at the end of 2024. Fundamentals remain strong, and this cycle is less likely to end soon.

First, the bond market is showing signs of stress. Higher liquidity injections are inevitable. That will support cryptocurrencies and blockchain-related equities. With its predictable monetary policy and growing institutional adoption, Bitcoin stands to benefit the most.

Second, institutionalization of the asset class continues. U.S. Bitcoin ETFs have attracted approximately $10bn in net inflows during the first five months of the year—around $2bn per month. While slightly below 2024’s monthly average (~$3bn), these are still robust figures.

In parallel, Bitcoin’s role as a treasury asset is gaining momentum. New corporate initiatives like MICROSTRATEGY INCO. are being launched, promising additional flows into the ecosystem. In this context, we favor companies backed by reliable investors and with clearly achievable business plans.

Catalysts

• U.S. regulations. Clarity about the oversight of digital assets and the issuance of stablecoins is just the beginning. Additional bills are in the pipeline that could support DeFi, define what qualifies as a security, and introduce federal-level rules for miners. Stay tuned.

• Liquidity tailwind. Bitcoin has demonstrated resilience in this volatile market and acted as a safe haven when the Fed's independence was pressured. If fiat confidence erodes, Bitcoin is positioned to shine.

• Upcoming U.S. ETFs. Solana futures have just been approved, and spot Solana (SOL) ETFs could be next. We also expect staking-enabled Ethereum (ETH) ETFs to follow, alongside possible launches of Ripple (XRP) investment products as its legal saga nears resolution. While none of these launches guarantee success, they expand institutional access to digital assets.

Risks

• Trump’s crypto entanglements. How far can the Trump family go into crypto ventures? So long as activity stays in the memecoin or NFT space and foreign capital remains at a distance, regulators may turn a blind eye. But if public funds or retail losses enter the picture, the bipartisan goodwill could evaporate, potentially triggering a renewed crackdown.

• Miners stress. Miners are navigating troubled water. The search for computing efficiency is straining margins, while many are redirecting cheap electricity to AI infrastructure projects. That pivot isn’t without risk: from execution failures to an oversupply of compute power, the path forward is uncertain, especially for the smaller players. We favor larger miners, who seem relatively cheap, factoring in the Bitcoin some of them have accumulated on their balance sheet.

• Loss of trust in Bitcoin treasury companies. The success of the (Micro)strategy has been largely driven by strong leadership and access to institutional capital. But several recent imitators lack transparency and credibility. If they fail to meet market expectations, they could face forced liquidations, creating instability in both Bitcoin prices and sentiment.