Meta Description: Discover market insights for 2024/2025 and a review of the 2023/24 financial year for cryptocurrency in the UK to help investors.
Reports from Finder put the figure for crypto usage/ownership in the UK at 5.6 million and a projected market worth of £2 billion in 2023 and £3.7 billion by 2028 (Statista). The 2023/2024 crypto season had a swinging momentum, pushing new highs, lows, and periods of ranging moves with no defined direction. Read on for helpful insights into the 2024/2025 crypto market.
Crypto Trading in the UK From 2021–2023/24
The UK is one of the leading countries in crypto ownership and usage. The industry is bolstered by modern technologies and platforms, TradingView, and other brokers that offer investors crypto exposure and trading opportunities. Between 2021 and 2023, the popularity of cryptocurrencies increased, as evidenced by the increase in crypto holdings, which rose to over £10,000 held by at least 6.6% of individuals, according to the Financial Conduct Authority (FCA).
The crypto space also enjoys patronage and collaboration with sports clubs in the UK, with several crypto brands sponsoring events and jerseys and having stadium ads. These contribute to increased crypto awareness.
Key Developments 2023–2024
The top events in the UK crypto space include discussions about crypto regulations, the extensive impact of the 2022 bear market, and potential recovery. The financial year also saw a slight increase in decentralised finance (DeFi) adoption in the UK and more interest in Web3.
Discussions also dominated around the potential design and adoption of central bank digital currencies (CBDCs), but the Bank of England (BoE) has not made specific commitments.
Economic pressures also pushed more people to crypto in the UK, given the all-time returns on popular cryptocurrencies like Bitcoin, Ethereum, and Doge. However, the FCA categorised cryptocurrencies as ‘restricted mass market investments’ in October 2023. The NFT market took an unsurprising hit to reach new lows compared to previous years. The focus moved from NFTs to spot trading crypto.
2023 also saw the HM Revenues and Customs add crypto profits declaration to the compulsory lists for tax returns. Crypto traders and investors were directed to declare sales and profits from such activities, but they can claim Capital Gains Tax relief where applicable.
Crypto Market Trends
Although 2023 saw periods of bearish markets, the top coins closed the year in profits. Bitcoin gained nearly 150%, while Ethereum rallied 85% in 2023. Other coins also joined the trend; Dogecoin, Pepe, and others enjoyed massive price increases in the same period. This is likely why 47% and 33% of UK crypto holders bought Bitcoin and Ethereum in 2023.
There was also an increase in the number of firms and projects working on real-life asset tokenisation. Crypto-based services also kicked off in the UK; crypto gateways are gradually being adopted by many companies looking to leverage crypto payments. The Fintech industry benefits from this; there are Fintech solutions that fill the gaps for digital payments using cryptocurrencies.
New Projects and Trading Platforms
Crypto and web3 startups in the UK are popular, especially among the younger generations. SocialFi and gaming platforms are attracting users to earn rewards while playing games, communicating, or interacting with people.
One example is online gaming platforms’ adoption of crypto for deposits and withdrawals. Tether, Shiba Inu, XRP, Binance Coin, and Cardano were among the choices for investments in the UK alongside Bitcoin and Ethereum.
Coinbase remained the leading platform for trading in the UK, staying ahead of companies that provide similar services.
Critical Trends for 2024/2025
Some of the developments and trends expected in the cryptocurrency space over the year include:
Eco-Friendly Crypto Mining
Mining cryptocurrency is permitted in the UK; however, there is a growing push for miners to operate in a manner that aligns with the country’s sustainability objectives. Argo Blockchain is at the forefront of efforts to make crypto mining more sustainable; they have transformed into a carbon company. All scopes recognise them as ‘climate positive’ for their greenhouse gas emissions.
While future regulations may impact mining activities in the UK, Bitcoin remains prominent with its proof of work algorithm. It is expected to continue operating for the foreseeable future.
Bitcoin Halving
This occurs every four years when mining rewards are cut by half, increasing scarcity and value appreciation. Halving events typically impact the market dynamics; this year might be no exception. Monitor factors that could drive investor optimism, such as ETF approvals, regulatory changes and broader adoption.
DeFis popularity is on the rise, with financial services incorporating DeFi applications. This year, more solutions are gaining recognition as governments take steps to protect consumers through regulations.
Digital Entertainment
The introduction of crypto-powered entertainment will massively boost gaming and other entertainment. The success of existing blockchain games may prove attractive for creators and attract fun lovers in the crypto space.
Crypto Regulation
We expect regulatory decisions to be made, especially in the UK, US, and Europe. Current crypto laws help protect traders and investors, but governments want greater control over the crypto industry.
Immersive Projects
Developers are focused on building immersive projects with real-life use cases. This trend will shape much of the crypto space in 2024–2025 as more people get interested in web3.
Trading Crypto in the UK
The global crypto market has endured prolonged bearish periods but has had more returns than traditional stocks over the last decade. The UK crypto landscape is still developing in the context of interest and crypto ownership, but the market size is massive. Bitcoin halving, crypto regulation, and DeFi will shape the UK crypto space in the 2024/2025 financial year.
