On July 14, 2025, Bitcoin marked a pivotal moment in its financial journey, surpassing the symbolic threshold of $120,000 and briefly peaking at an extraordinary $123,153 before settling near $122,000. 

In doing so, it dethroned Amazon in terms of market capitalisation, becoming not just a token of digital revolution but one of the most valuable assets across global markets. This ascent, driven by a confluence of market momentum and shifting political winds, underscores the growing legitimacy of digital assets in mainstream finance.

Bitcoin’s surge coincides with the start of 'Crypto Week' in the US House of Representatives, where lawmakers began debating key legislation aimed at regulating digital assets. President Donald Trump, whose first term featured vociferous opposition to digital currencies, has transformed into an unlikely champion. Declaring himself the 'crypto president,' Trump launched his second term with a sweeping executive order aimed at establishing American dominance in digital financial technology. The order catalysed a new era that includes a high-profile Digital Assets Summit at the White House and ushered in a wave of legislative proposals, from the Clarity Act and Anti-CBDC Act to the Genius Act, all designed to clarify regulation, restrict government-issued digital currencies, and empower the private issuance of stablecoins.

The Genius Stablecoin Act, passed by the Senate in June 2025, signals progress in granting legitimacy to digital assets pegged to fiat currencies. Meanwhile, the Anti-Surveillance State Act stands as a bulwark against potential overreach by the Federal Reserve, reinforcing concerns about privacy in a digitally evolving economy. The financial establishment, from lawmakers to institutional giants, is taking note. Nigel Green of deVere Group encapsulated the mood, observing that crypto is no longer on the fringes, “This is front and centre of US financial policy. Trump is championing it, lawmakers are acting on it, and Wall Street is all-in.”

This shift isn’t confined to America. Corporate interest in stablecoins is accelerating, with Amazon and Walmart reportedly exploring their own digital currencies to enhance consumer payment systems.

This surge in valuation is mirrored by seismic shifts in policy sentiment worldwide. Governments that once approached cryptocurrencies with skepticism are now reevaluating their stance, particularly as crypto technologies prove critical to cross-border payments and the emergence of stablecoins.

South Asia is echoing the trend. Pakistan claims it's on track to become South Asia’s first nation to legalise cryptocurrency, touting the move as a magnet for foreign investment and a strategic leap over India’s more restrained approach. The IMF has even encouraged Pakistan to tax crypto gains as a revenue-generating measure amidst bailout obligations. But in a country marked by fiscal fragility and political flux, the promise of crypto-fuelled transformation may be more aspirational than imminent.

Bhutan, though yet to legalise cryptocurrencies, has engaged in sovereign Bitcoin mining. Sovereign adoption stretches further, with the US, China, and Bhutan accumulating crypto reserves, and BlackRock injecting over $80 billion via Bitcoin and Ethereum ETFs.

India, meanwhile, reflects a paradox.

Despite stringent taxation and regulatory ambiguity, the country has twice topped global crypto adoption charts in recent years. Reserve Bank of India (RBI) Governor Sanjay Malhotra affirmed that the central bank continues to monitor international developments in the cryptocurrency space with a discerning eye. Historically, the RBI has expressed firm reservations about private cryptocurrencies, citing risks associated with money laundering, terror financing, and potential threats to monetary sovereignty. Addressing the parliamentary standing committee on finance, chaired by BJP MP Bhartruhari Mahtab, Malhotra outlined RBI’s evolving role in a rapidly digitizing economy and confirmed that a formal discussion paper on crypto assets is in the works.

Speaking at a press briefing on June 6 following the Monetary Policy Committee’s review, Malhotra reiterated that crypto assets pose challenges to financial stability and the efficacy of monetary policy, concerns that underpin RBI’s cautious stance. As an alternative, the central bank is actively developing its own Central Bank Digital Currency (CBDC), which it views as a more secure, state-backed solution within India’s payments ecosystem.

Currently, India does not legally recognise private cryptocurrencies as legal tender, yet levies a 30% tax on gains from virtual digital assets.  Exchanges operating domestically are also required to register with the Financial Intelligence Unit, underscoring the government's intent to maintain stringent oversight. Industry leaders argue that reducing the 1% TDS on crypto transactions to 0.01% could catalyse compliance, transparency, and fiscal efficiency.

Despite regulatory hurdles, innovation within India's crypto landscape persists. Local platforms now offer crypto options, appealing to traditional traders with features like perpetual contracts, deep liquidity, and round-the-clock trading. While such products may entice risk-tolerant investors, the complexity and volatility of derivatives demand considerable expertise.

Yet beyond the optimism lies a sobering undercurrent. The explosive growth of the cryptocurrency market has birthed volatility and disillusionment. A study by 1 Finance reveals that more than half of the tokens launched since 2021, amounting to over 3.6 million, are already defunct, with nearly half of these collapses recorded in 2025 alone. Rampant speculation, lack of utility, and fraudulent schemes have led to staggering investor losses exceeding $500 million in 2024.

Still, as governments and institutions integrate digital assets into their frameworks, crypto may be moving past the cacophony of short-term hype and into a phase of sustained normalisation. Whether this evolution represents the maturation of a financial revolution or simply a recalibration of speculative fervour remains a question best answered over time.

Vaishali Basu Sharma is a strategic and economic affairs analyst.

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