• Franklin Templeton predicts more nations will adopt Bitcoin as a reserve asset in 2025, with growing institutional and sovereign support.
• Hong Kong and Germany have expressed interest in Bitcoin reserves, citing financial stability and opportunities to strengthen monetary systems.

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Franklin Templeton, a prominent issuer of spot Bitcoin exchange-traded funds (ETFs), has forecasted a significant shift in Bitcoin adoption for 2025. In its digital assets outlook, the firm suggests that several countries will integrate Bitcoin as a strategic reserve asset. This is likely to put Bitcoin in a better place as a global store of value, especially with institutional and sovereign backing.

The ETF issuer expects the transformation in the application of cryptocurrencies from being a tool for speculation to being utilitarian. Franklin Templeton has predicted that the foundational technologies of cryptocurrency will transform the global financial systems by the end of next year.

Hong Kong and Germany Signal Interest

Hong Kong and Germany have expressed interest in including Bitcoin in their national currencies. Wu Jiexhuang, a functional constituency member in Hong Kong’s legislative council, proposed that Bitcoin be included in the territory’s reserves for better economic balance. He provided instances of smaller countries, El Salvador and Bhutan, which have embraced Bitcoin as a part of their economic policy.

Jiexhuang also pointed out that US regulatory actions such as the approval of spot Bitcoin ETFs has been instrumental in driving institutional onboarding. Also, the speculations regarding U.S. President-elect Donald Trump’s policies to accept Bitcoin as a reserve form of asset have encouraged debates in Hong Kong.

The Free Democratic Party of Germany has endorsed the idea of using Bitcoin in the country’s reserve plan. The party’s agenda for the next election in 2025 includes the adoption of distributed ledger technology to enhance the European financial system. Christian Lindner, the leader of the Free Democratic Party, has accused the German government of missing opportunities in the crypto arena and called on the government to seize the opportunities that come with Bitcoin.

Regulatory Clarity and Market Impact

Franklin Templeton also raised the possibility of the impact of Donald Trump’s re-election on cryptocurrency adoption. His administration has been characterized by the provision of regulatory certainty and Paul Atkins is likely to be appointed as the new SEC chair hence promoting the growth of crypto products such as tokenized securities.

The US approval of spot Bitcoin ETFs earlier this year has already paved the way for this shift in the market. Institutional investors have also piled in and bought more than $106 billion worth of Bitcoin in 2024 alone.

Bitcoin hit an all-time high of $100,000 in the earlier part of the year but was trading at $92,700 at the end of the year. The market’s overall expansion to almost $4 trillion points to further cryptocurrency integration into the financial world.

Another innovative concept in the crypto market is Decentralized Physical Infrastructure Networks (DePIN). Currently valued at $29 billion, DePIN promises that decentralized technologies can even transform industries that rely on physical pathways.