January 2025: Remake of U.S. Crypto Policy Underway
Research Team
Last Updated: 2/3/2025 | 15 min. read
Crypto markets continued to climb in January, although valuations pulled back over the weekend on tariff news. January also featured a whirlwind of activity that will likely have implications for the digital assets industry for the rest of 2025 and beyond.
The Trump administration issued a comprehensive executive order on crypto which committed to protecting key principles of the marketplace, including the right to self-custody digital assets. The order also said the administration would “promote the development and growth” of stablecoins. On the same day, the Securities and Exchange Commission (SEC) issued updated policy guidance which should allow traditional financial institutions to custody crypto assets.
Aside from the policy news, technological breakthroughs from Chinese AI lab DeepSeek brought to focus the need for decentralized AI models and related infrastructure.
Exhibit 2: Most asset classes appreciated last month
Exhibit 3: Stablecoin market cap greater than $200bn
In addition to his executive order on crypto policy, President Trump and his family launched the memecoins $TRUMP and $MELANIA on the Solana blockchain. As of January 31, the fully diluted valuation of the toke.[7] Memecoins are a type of digital asset that do not claim to offer real-world utility, but which nonetheless can have economic value to the members of a certain community as a form of entertainment — like physical collectibles. Exhibit 4 shows the currently most popular memecoins by “mindshare” (social media attention). Dogecoin is the dominant memecoin by mindshare and the largest by market capitalization.
Exhibit 4: Trump coin the fifth most prominent memecoin by mindshare
Exhibit 5: Solana platform pump.fun launching ~60k memecoins on average every day
Exhibit 6: Currencies Crypto Sector outperformed in January
Just like in traditional markets, developments in AI technology were a dominant theme in the crypto asset class in January. Most importantly, on January 20, China-based startup DeepSeek launched its new open-source AI model, called R1, which
The digital assets industry is rapidly evolving — as demonstrated by the flurry of news in January 2025. While there have been many distinct developments, collectively they point to improved regulatory clarity, growing institutional adoption, and ongoing technological advancements. New tariffs announced by the Trump administration at the end of January could weigh on all markets over the short-term, and crypto investors will need to monitor these developments closely. Beyond tariffs, Grayscale Research expects crypto markets to focus on continued changes to U.S. federal government regulatory guidance on stablecoins and other topics, as well as other macro issues, including the outlook for US tax policy and the prospect for Fed rate cuts.
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Index Definitions: The FTSE Grayscale Consumer and Culture Crypto Sector Index includes digital asset networks, protocols, and applications that seek to deliver and support consumption-centric activities across a variety of goods and services. The FTSE Grayscale Smart Contract Platform Crypto Sector Index includes digital assets that are general purpose networks that provide programmable functionalities. The FTSE Grayscale Financials Crypto Sector Index includes digital asset networks, protocols, and applications that seek to deliver financial transactions and services. The FTSE Grayscale Currencies Crypto Sector Index includes digital assets that serve three fundamental roles – medium of exchange, store of value, and unit of account. FTSE Grayscale Utilities and Services Crypto Sector Index includes digital asset networks, protocols, and applications that seek to deliver practical and enterprise-level applications and functionalities. The FTSE/Grayscale Crypto Sectors family of indexes measure the price return of digital assets listed on major global exchanges. The Bloomberg Magnificent 7 Total Return Index (BM7T) is an equal-dollar weighted index that tracks seven of the most widely-traded companies in the United States. The S&P 500 Industrials comprises those companies included in the S&P 500 that are classified as members of the GICS industrials sector. The Bloomberg-Barclays 25y+ Treasury index measures the total return of nominal US Treasury bonds with a remaining maturity greater than 25 years. The U.S. Dollar Index (DXY) tracks the strength of the dollar against a basket of major currencies. The Russell 2000 Index is composed of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the Russell 3000 total market capitalization. The S&P Goldman Sachs Commodity Index (S&P/GSCI) is a composite index of commodity sector returns representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities. The Nasdaq 100 Index is a stock index of the 100 largest companies by modified market capitalization trading on Nasdaq exchanges. The MSCI ACWI ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets countries (excluding the US) and 24 Emerging Markets countries.
[1] Source: Artemis. Data as of January 31, 2025.
[3] Source: Bloomberg. Data as of January 31, 2025.
[6] Source: Transcript vs Roll Call.
[7] Source: Artemis. Data as of January 25, 2024.
[8] Source: Dune Analytics. Data as of January 25, 2024.
[9] Source: Token Terminal. Data as of January 31, 2025.
[10] Source: Artemis. Data as of January 31, 2025.
[11] Source: Artemis. Data as of January 25, 2025.
