The final two months of 2025 could become a turning point for the digital asset market. Regulators are catching up after an unprecedented U.S. government shutdown, while new exchange-traded funds (ETFs) linked to lesser-known cryptocurrencies are lining up for approval.
Decisions by the U.S. Federal Reserve could sharply change the amount of available liquidity. At the same time, institutional players are moving deeper into tokenization and deposit tokens, while regulators are growing louder in warning about risks at the intersection of traditional finance and blockchain. The overlap of policy, forecasts, and new products is creating both opportunities and threats for investors.
Government reopening restores momentum for crypto regulation
On 12 November 2025, the longest U.S. federal government shutdown in history ended when President Donald Trump signed a funding bill that reopened government agencies. The 43-day standoff had frozen key functions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
With the new law extending government funding through 30 January 2026, staff have returned to work and regulators have regained the ability to work through the backlog of crypto-related filings. The absence of regular macroeconomic data during the shutdown also complicated the Fed’s job: Chair Jerome Powell compared the situation to “driving in the fog.” The restoration of government services should improve the “dashboard data” ahead of the December Federal Open Market Committee (FOMC) meeting and help the SEC return to normal operations.
Crypto-focused agencies such as the SEC and CFTC can now resume reviewing dozens of exchange-traded product applications. Before the shutdown, the SEC adopted “generic listing standards” that cut the review period for new crypto ETFs to 75 days, down from up to 270 previously. More than 130 crypto ETF applications are currently pending at the SEC, and analysts expect a wave of approvals to begin in late 2025.
Altcoin ETFs ready to widen investor access
New standards speed up approvals
The SEC’s new standards allow altcoin ETFs to reach the market more quickly if the underlying token trades on a regulated venue or has a sufficiently liquid futures market. Before these reforms, U.S. ETFs were essentially limited to bitcoin and ether: by September 2025, 21 spot crypto ETFs had launched.
Now analysts expect the first products based on cryptocurrencies such as Solana and XRP to appear as early as November 2025. Since the SEC no longer requires a case-by-case approval for each filing, issuers that meet the generic criteria can expect their ETFs to become effective automatically once the shortened review period expires.
XRP and other altcoins in the queue
Investor attention is focused on several altcoins seen as frontrunners for the next round of ETFs. Among the more than 130 filings, products tied to XRP, Solana, Cardano, Polkadot, and Hedera stand out. Under the generic rules, approval odds for a spot XRP ETF are estimated to be “above 90%,” and decisions on the first altcoin funds are expected toward the end of 2025.
Excitement around XRP intensified in mid-November after Canary Capital filed a Form 8-A registration statement with the SEC — the final step before listing. According to reports, Nasdaq approved the listing of the Canary XRP ETF under the ticker XRPC, opening the door for the first U.S. spot XRP fund. Bloomberg ETF analyst Eric Balchunas suggested that trading could begin as soon as the week after the filing. The launch of XRPC could set the tone for the rest of the altcoin ETFs awaiting SEC decisions.
Bitcoin cycle peak and implications for altcoins
Analysts expect a late-2025 peak and a turn in 2026
Many market participants still see Bitcoin as moving in a four-year cycle tied to its roughly quadrennial halvings. Digital asset analyst Benjamin Cowen notes that historical patterns point to a high probability that the next major cycle peak may fall in the fourth quarter of 2025.
Cowen stresses that in previous cycles — 2013, 2017, and 2021 — Bitcoin set new highs late in the year following U.S. presidential elections. If that pattern holds, 2026 is likely to bring a downward phase, in line with typical mid-cycle corrections in traditional markets. This outlook implies elevated volatility in the coming months and potential opportunities to rotate capital into undervalued tokens as the market approaches its peak.
Another analysis, presented by ARK Invest’s David Puell, further underlines Bitcoin’s cyclicality. After the April 2024 halving, which cut the block reward from 6.25 to 3.125 BTC, ARK noted that by mid-November 2024 Bitcoin’s price had already risen 41% yet still lagged behind the trajectories of prior post-halving rallies. Puell argues that if Bitcoin continues to follow the average of the last two cycles, the price could theoretically reach around $243,000 within roughly 880 days from the November 2021 cycle low. Although this forecast was made before 2025, it supports the thesis that a potential peak may lie ahead toward the end of 2025.
Altcoins in a more mature market
The prospect of a Bitcoin peak has mixed implications for altcoins. Analysts at 21Shares note that even though Bitcoin hit new record highs in early 2025, the long-anticipated “altcoin season” never materialized. In previous cycles, investors often rotated capital from BTC into smaller tokens once the leading cryptocurrency cooled. In 2024–25, however, token oversupply, softer demand, and tougher regulation weighed on alternative coins.
As a result, Bitcoin dominance stayed elevated and altcoins failed to build a sustained uptrend. The report emphasizes that altcoins still have room to succeed, but only when they offer real utility: investors have become much more selective, and projects now need to demonstrate tangible value to attract capital.
Altcoin advocates, meanwhile, stress that a more mature market does not automatically spell doom for alternative tokens. Web3 entrepreneur Kamal Mokeddem argues that altcoins are evolving from pure speculative chips into growth and marketing tools that accelerate the adoption of decentralized applications.
According to him, tokens deeply integrated into popular Web3 services could, over time, accumulate a monetary premium comparable to BTC or ETH. This view remains speculative, but it illustrates a shifting narrative: more and more investors are evaluating tokens through network usage and incentive design rather than simple price speculation.
Fed policy: QT halt, liquidity boost, and uncertainty on rates
Ending QT supports liquidity
Monetary policy remains another key pillar for digital assets. At its 29 October meeting, the Fed cut its policy rate by 0.25 percentage points to a 3.75–4.00% range and announced that it would stop shrinking its balance sheet starting 1 December 2025. Instead of allowing up to $5 billion in Treasuries to roll off each month without replacement, the Fed will reinvest maturities and redirect proceeds from mortgage-backed securities into Treasury bills.
Powell said that reserve levels had reached a point where further reductions could overly tighten conditions in money markets. In practice, this move ends more than three years of quantitative tightening (QT) and marks an important inflection point for financial markets. Analysts expect that holding the balance sheet steady will support liquidity in short-term funding markets and potentially benefit risk assets — including cryptocurrencies.
Some experts believe the Fed may soon have to expand its balance sheet again to keep pace with economic growth. Paul Ashworth of Capital Economics estimates that, to maintain a “neutral” level of reserves in a growing economy, the Fed would theoretically need to buy around $20 billion in Treasuries per month. And although officials present the move as technical, history shows that rising liquidity often coincides with bursts of speculative activity across asset classes. Crypto investors are watching closely to see whether the end of QT sparks a new “risk-on” phase reminiscent of earlier rounds of quantitative easing.
The December FOMC meeting and the rate-cut debate
Despite the October cut, Powell has made it clear that additional easing at the 9–10 December meeting is not guaranteed. He noted that there are “strongly differing views” within the committee over whether further cuts are appropriate. The lack of key economic data during the shutdown forced the Fed to rely on private surveys and fragmentary indicators, and Powell warned that such uncertainty could lead policymakers to “slow down.”
Markets have lowered expectations for a December move: the probability of another cut is now roughly one-third. This caution reflects a divided committee: some officials, including Fed Governor Stephen Miran, pushed for a deeper cut in October, while others, such as Kansas City Fed President Jeffrey Schmid, would have preferred no change. That split suggests the December decision will heavily depend on data released in the weeks after the government’s reopening.
Institutional adoption, tokenization, and deposit tokens
Tokenization gains traction — along with new risks
Beyond ETFs and macro drivers, institutions are exploring ways to blend blockchain with traditional finance. Tokenization means representing conventional assets — bonds, funds, real estate shares, and more — as digital tokens on a blockchain to make trading and settlement faster and more efficient.
In a November report, the International Organization of Securities Commissions (IOSCO) warned that tokenization may introduce new legal and infrastructure risks: investors are not always clearly informed whether they own the underlying asset itself or merely a digital “wrapper.”
IOSCO chair Tuang Lee Lim said that although current adoption remains limited, tokenization has the potential to radically change how financial instruments are issued, traded, and serviced. Regulators are therefore evaluating whether investor protections and disclosure requirements need to be updated.
Nonetheless, interest in tokenization continues to grow. Thomas Cowan, head of tokenization at Galaxy Digital, told a New York conference that major financial institutions now see value in issuing tokenized assets regardless of Bitcoin’s price. Unlike previous cycles, when enthusiasm evaporated along with the bull market, tokenization has emerged as a standalone technology trend.
Deposit tokens and stablecoins go mainstream
One concrete example of tokenization’s advance is JPMorgan’s new deposit token. On 12 November 2025, the bank began rolling out JPM Coin — a digital token representing claims on existing client deposits. It is used to settle transactions on the Base blockchain (part of the Coinbase ecosystem) and enables near-instant payments 24/7.
Unlike stablecoins, deposit tokens are issued by regulated banks and can bear interest. Before launch, JPM Coin was tested with partners including Mastercard, Coinbase, and B2C2, and the bank now plans to introduce a euro-denominated version. Naveen Mallela, co-head of JPMorgan’s blockchain division, emphasized that such products can offer institutions a “yield-bearing” alternative to traditional stablecoins.
The initiative highlights how banks are using blockchain to speed up settlements and manage liquidity more efficiently. Other major players, including Bank of New York Mellon and HSBC, are also exploring deposit tokens. The combination of bank-issued tokens and heightened regulatory focus underscores how traditional finance and the crypto industry are steadily converging.
Regulatory pressure and market dynamics
Authorities consider tighter oversight of “crypto treasuries”
Amid innovations such as tokenization and altcoin ETFs, regulators are also tightening oversight of corporate practices around crypto assets. In Japan, financial authorities are examining whether companies that shift their core business into holding large amounts of cryptocurrencies should face stricter listing requirements.
Tokyo Stock Exchange operator Japan Exchange Group is considering applying backdoor-listing rules and additional audit requirements to firms that effectively become “digital treasuries” after listing, following steep share-price declines at several such companies. This would close a loophole that allows businesses to trade on the exchange as “crypto holding vehicles” without undergoing the full IPO process. While aimed at protecting retail investors, these steps could cool enthusiasm for treasury strategies built around large bitcoin positions.
Regulators outside Japan are likewise sharpening their focus on manipulation and liquidity risks in tokenized stocks and ETFs. IOSCO notes that because tokenized assets may trade on blockchain platforms operating under different legal regimes, investors may have fewer rights and weaker recourse mechanisms. As tokenized products gain popularity, tighter disclosure and custody standards look increasingly likely.
Institutional diversification and steady altcoin exposure
At the same time, institutional investors are gradually broadening their exposure beyond Bitcoin and Ether. Research from 21Shares shows that BTC and ETH ETFs attracted significant institutional capital in 2024–25, but these players typically hold positions for the long term, reducing day-to-day liquidity in spot markets.
As a result, much of the capital that once flowed into altcoins via crypto exchanges is now effectively “parked” in exchange-traded products. This may help explain why large-scale altcoin rallies have been absent despite high retail trading volumes in meme tokens. Analysts believe that altcoins with clearly defined utility — such as DeFi protocol tokens or infrastructure for real-world asset tokenization — could benefit when traditional investors start seeking diversification.
Outlook and conclusions
November and December will put the new structure of the crypto market to the test, as policy, market cycles, and product launches intersect. With the U.S. government back at work, regulators can finally return to long-pending ETF applications, including altcoin funds such as XRP and Solana that could deepen liquidity and broaden institutional access. At the same time, analysts expect Bitcoin to move toward a cycle peak in late 2025, raising the odds of sharp volatility spikes and renewed rotation into selected altcoins.
The Fed’s halt of QT and its December rate decision will shape dollar strength and risk appetite, while banks push forward with tokenization and deposit tokens that plug blockchains into existing payment rails.
For diversified portfolios, this period calls for especially close attention to regulation, macro data, and new product launches — the very factors that may decide whether the crypto market ends the year on a wave of renewed momentum or under a cloud of caution.
