The State of Crypto 2025 Sneak Peek: Nation-States Adopt the Bitcoin Standard

Each year, we publish our State of Crypto: Market Outlook research report, where we share our top predictions for the year ahead. In the upcoming 2025 edition, we’ve highlighted twelve key forecasts, covering everything from innovations on Bitcoin to emerging sectors such as DePin and AI. While this year’s full report will be released in the coming weeks, we wanted to give our audience a sneak peek at what’s in store. This week’s sneak peek will focus on Bitcoin, specifically nation-state adoption and emerging scaling solutions on the Bitcoin network.

In 2024, Bitcoin gained unprecedented political significance and continued its emergence as a store of value that allows institutions and nations globally to participate in its decentralized monetary system, offering a hedge against economic uncertainty, inflation, political turmoil, and local currency debasement. For example, MicroStrategy has continued increasing its holdings, reporting unrealized gains of over $15.5 billion and rising. In 2025, we may see other institutions following MicroStrategy’s lead, as evidenced by Japanese investment firm Metaplanet, which has accumulated 1142 Bitcoin as a hedge against the depreciation of the Japanese yen. Similarly, Marathon Digital recently completed a $1 billion debt offering in order to acquire more Bitcoin. Following El Salvador, Bhutan utilized its hydroelectric power for Bitcoin mining, earning over $1.1 billion, over a third of the country’s total GDP. 

Additionally, Russia⁶ has reversed its stance by legalizing Bitcoin mining and international crypto payments. Following Russia's lead, China has also softened its stance on Bitcoin and cryptocurrencies. A recent ruling by the Shanghai Songjiang People’s Court clarified that owning cryptocurrencies is not illegal under Chinese law. The November 18 judgment recognized digital assets as having 'property attributes,' affirming their legal status for personal ownership and classification as commodities.

We’re witnessing a clear shift as nation-states increasingly embrace the Bitcoin standard. Even in the U.S., the possibility of holding Bitcoin as a strategic reserve asset has gained traction during the presidential race, especially with the Department of Justice already holding 208K confiscated BTC, worth approximately $14 billion. Adding to this momentum, there have been discussions about the incoming Trump administration launching a strategic Bitcoin reserve. Trump is reportedly considering appointing a 'crypto czar' and forming a cryptocurrency council as part of his administration's broader approach to integrating digital assets into national strategy.

That being said, in 2025, we expect to see countries like Argentina adopt Bitcoin as a strategic reserve asset. We've seen inflation in Argentina hit staggering levels, as seen in figure 1, leaving the country in desperate need of innovative solutions to stabilize its economy. Additionally, figure 2 shows that Argentina has one of the highest adoption rates of crypto in the world, driven by its citizens' need to protect their wealth from the country's persistently high inflation and currency devaluation. With a goal of achieving a zero-debt budget by 2025, Argentina’s crypto-forward agenda, coupled with President Milei’s collaboration with El Salvador’s President Nayib Bukele, could signal broader Bitcoin adoption. Milei’s alignment with Bukele’s Bitcoin policies may also inspire a framework for integrating Bitcoin into Argentina’s financial system, positioning it as a hedge against inflation and currency instability. Such a move could pave the way for further adoption across Latin America and the broader global south as more nations look to replicate El Salvador’s success.

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Figure 1: Argentina Inflation Rate 2002-2022

Data Source: 21Shares, Worldbank

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Figure 2: Internet Users Ages 16-64 Who Own Crypto

Data Source: 21Shares, Reuters

The growing momentum around Bitcoin’s adoption by nation-states underscores its evolution from a niche asset to a strategic component of national financial systems. As highlighted in this year’s sneak peek, countries like Argentina exemplify how economic challenges can catalyze innovative policy shifts, driving Bitcoin’s integration into broader monetary strategies. With key players such as the U.S., China, and Russia reassessing their stance on Bitcoin, alongside emerging markets leveraging the asset for economic resilience, 2025 is poised to be a transformative year for the Bitcoin network. The developments we’re witnessing are more than isolated cases—they signal a broader trend toward recognizing Bitcoin as a hedge against macroeconomic volatility and a cornerstone of financial sovereignty. Stay tuned for the full report, where we’ll explore these trends in greater detail and unpack their implications for the global crypto landscape.

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