Dear Founders, Investors, and Friends,
The beginning of 2025 has been anything but quiet. Political shifts are already setting the stage for profound changes - both in global affairs and within the digital assets space.
So, without further ado, let’s take a closer look at the key developments shaping our industry.
U.S. Crypto Regulation - A Massive Shift
With Donald Trump returning to the White House, the U.S. is seeing a fundamental change in its approach to crypto regulation.
The new administration wasted no time in setting a more crypto-friendly tone, issuing a series of executive orders aimed at defining a new regulatory framework for digital assets and the crypto industry.
Among them was a firm rejection of a U.S. central bank digital currency, a strong push for stablecoin adoption, and a commitment to ensuring free access to public blockchains.
Beyond these directives, new regulatory bodies dedicated to crypto were introduced.
The U.S. Senate has launched a Digital Assets Subcommittee, led by Senator Cynthia Lummis, the author of the Strategic Bitcoin Reserve Bill, which is set to assist lawmakers in drafting new digital asset legislation.
Meanwhile, the SEC has formed a dedicated Crypto Task Force under the leadership of Commissioner Hester ‘Crypto Mum’ Peirce, tasked with developing a clearer regulatory framework for the industry.
In a notable policy shift, the SEC repealed Staff Accounting Bulletin (SAB) 121, a rule that previously prevented U.S. banks from offering crypto custody services by forcing them to classify held crypto as both a liability and an asset on their balance sheets.
This repeal paves the way for crypto custody by major U.S. banks, enables innovations like Bitcoin-backed loans, and is likely to significantly boost institutional adoption.
The regulatory landscape has also shifted at the leadership level.
Caroline Pham has been appointed as Acting Chair of the CFTC, bringing experience in digital asset initiatives, while Mark Uyeda, a longtime critic of Gary Gensler's enforcement-first approach, has taken over as Acting Chair of the SEC.
Both appointments signal a departure from the regulatory hostility of previous years.
Strategic Bitcoin Reserve—Let the Race Begin
Perhaps the most controversial topic is the discussion around a U.S. Bitcoin reserve.
Via one of his executive orders, President Trump ordered his administration to evaluate the potential for a ‘U.S. strategic digital assets stockpile’.
The idea? Rather than selling seized cryptocurrencies, the U.S. government may hold onto them—while active acquisitions aren’t planned for now.
Interestingly, Trump has even floated the idea of a U.S. crypto reserve composed of tokens from American-founded companies.
In addition to that, several U.S. states, including Arizona and Texas, have announced plans to vote on proposals for establishing their own Bitcoin reserves.
While these initiatives are still in the early stages, the mere fact that such discussions are reaching state legislatures highlights the growing legitimacy of Bitcoin as a strategic asset.
Trump’s Memecoin Launch—Blessing or Curse?
Amid these regulatory advancements, one event captured the crypto industry’s attention for entirely different reasons.
Just days before his inauguration, Trump and his wife Melania both launched their own memecoins on Solana, triggering a wave of speculative trading.
Within days, Trump’s token alone saw over $50 billion in trading volume.
The Good
Despite a few hiccups among infrastructure providers, Solana’s network handled the sudden surge in activity quite well.
The fact that such a high-profile, large-scale launch could run without major disruptions is a testament to how far blockchain infrastructure has come in terms of scalability and reliability.
However, the launch itself wasn’t exactly a win for the industry's reputation.
The Bad
For years, efforts have been made to establish crypto’s legitimacy beyond speculation.
Events like this risk reinforcing the perception that crypto is just a high-stakes casino rather than a transformative financial technology.
If the industry wants to evolve beyond speculation and cement itself as the backbone of global finance, it needs to move past these kinds of episodes.
Sony’s Layer 2 Launch
Beyond that, mainstream corporations are continuing to deepen their engagement with blockchain technology.
This month, Sony made one of the most significant moves in corporate crypto adoption by launching its own Layer-2 network, Soneium.
The launch follows a five-month test phase, during which more than 14 million wallets carried out over 47 million transactions.
The company’s vision for Soneium is to build an ecosystem that enables creators and entertainment companies to distribute and monetize content more efficiently.
With Sony Music and Sony Pictures already owning extensive media catalogs, blockchain-based rights management and digital distribution could become a new revenue stream for the company.
Whether this strategy will work remains to be seen, but the fact that a tech giant like Sony is engaging with the technology at such a deep level—not just through NFTs or some metaverse experiments—is an important signal for the industry.
Circle Acquires Hashnote
Institutional adoption of crypto took a notable leap this month with Circle’s acquisition of Hashnote, the issuer of USYC, the leading tokenized money market fund.
While some might see this as just another M&A deal, it highlights Circle’s strategic vision for the future of onchain finance.
Over the past year, the market for tokenized money market funds has grown from $770 million to over $3.5 billion, making it one of the fastest-growing segments in crypto.
Remarkably, Hashnote’s USYC alone accounted for nearly 40% of this growth, outperforming even traditional giants like BlackRock’s BUIDL and Franklin Templeton’s FOBXX. This surge was primarily fueled by its deep integration with USD0, the stablecoin issued by French startup Usual, which uses USYC as its primary collateral.
Now, with Hashnote under its umbrella, Circle aims to integrate USYC more closely with USDC, enabling seamless, real-time transfers between the two. This approach aims not only to enhance operational efficiency but also to position USDC as more than just a payments-focused stablecoin, serving as a bridge to capital-efficient, yield-bearing financial products.
To amplify this vision, Circle has partnered with Cumberland, one of the leading market makers in the space, to ensure deep liquidity for both USYC and USDC across major trading venues. This combination of liquidity and yield potential could position USYC as a go-to collateral asset for financial institutions—just as USDC has established itself as one of the leading stablecoins for onchain payments.
Zooming out, this acquisition marks Circle’s expansion beyond being just a stablecoin issuer, positioning the company at the intersection of decentralized finance and traditional capital markets.
Blockwall Portfolio Update
This month, one of our earliest portfolio companies reached a significant milestone: Dusk Network has officially launched its mainnet!
Back in 2018, we backed Dusk with a belief in their bold vision: to redefine finance by bringing more institutions and their assets onchain.
How? By building a public blockchain where privacy, compliance, and efficiency coexist.
By leveraging zero-knowledge technology, Dusk opens the door for institutions to embrace DeFi — creating a financial system where innovation aligns with regulation and privacy doesn’t mean compromise.
And the timing couldn’t be better.
As institutions gear up to move onchain, Dusk is uniquely positioned to meet their needs.
We are proud to have been part of this journey from the very beginning and look forward to witnessing the impact the team will have on the financial world.
Key Events of the Last Few Weeks
- Morgan Stanley is considering entering crypto trading. According to a report by The Information, the $1.3 trillion investment bank is exploring the possibility of enabling cryptocurrency trading for customers on its digital platform, E-Trade. (Source: The Information)
- Coinbase Launches Bitcoin-Backed Loans. Starting now, users can take out loans of up to $100,000 secured by Bitcoin on the crypto exchange. The entire process is powered by the lending platform Morpho on the Base Layer-2 network, allowing users to access the service without having to interact directly with DeFi frontends or crypto wallets. (Source: Morpho)
- Wave of Crypto and Memecoin ETF Applications Hits the SEC. Bitwise and Rex Shares have filed for a Dogecoin ETF, with Rex Shares also submitting applications for ETFs based on TRUMP and BONK. Meanwhile, CoinShares has applied for Litecoin and XRP ETFs, and Grayscale is seeking to convert its existing Litecoin and Solana Trusts into spot ETFs. Adding to the momentum, Tuttle Capital has filed for ten double-leveraged crypto ETFs, including products tied to ADA, TRUMP, and MELANIA. (Sources: The Block, X)
- Streaming Platform Rumble Announces Development of Its Own Crypto Wallet. The announcement comes on the heels of a $775 million investment from stablecoin issuer Tether. (Source: X)
What We’ve Been Reading
In this paper, two former CFTC and SEC chief economists provide a comprehensive analysis of the Solana blockchain and its native token, SOL, comparing its technological features and market dynamics to those of Bitcoin and Ethereum. See Dominic’s LinkedIn post for more insights.
In this report, Coinbase argues how tokenization on top of permissionless networks can enhance transaction efficiency, user control, and innovation, emphasizing the benefits of open, interoperable systems over traditional, closed financial infrastructures.
In their latest blog post, Multicoin Capital outlines emerging opportunities in the crypto industry for 2025, focusing on verticals like decentralized physical infrastructure networks (DePIN), AI-driven zero-employee companies, and on-chain securities.
Disclaimer
To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.
This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons