Incumbents, Stablecoins and Prediction Markets Drive 2025 Up

2025 regulatory clarity rewards cautious incumbents as stablecoins (led by Tether) and prediction markets (Polymarket, Kalshi) surge amid the GENIUS Act’s federal stablecoin framework.

  • Incumbent firms that moved cautiously then expanded in 2025 captured value as regulatory clarity improved.
  • Stablecoins showed rapid transaction growth and strong issuer profitability, with Tether singled out for high per-employee profits.
  • Prediction markets such as Kalshi and Polymarket grew quickly, highlighted by a $2 billion investment from the Intercontinental Exchange.
  • High-profile losers included Do Kwon and broader criticism of the U.S. SEC under the previous administration; the GENIUS Act introduced a federal stablecoin framework in July.

First paragraph:
In 2025, investors reassessed where crypto value accrued after regulatory changes and uneven market returns. Venture capital and industry figures named winners and losers during a recent discussion featuring Mason Nystrom (Pantera Capital), Hootie Rashidifard (Hash3 co-founder) and Alana Levin (Variant partner). The conversation traced gains to firms that adapted as policy clarified and to specific product categories that grew this year.

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Incumbents and strategy:
Panelists said established platforms that had taken cautious stances earlier gained ground once rules became clearer. Robinhood was cited as an example of an incumbent that moved more aggressively in 2025. As Mason Nystrom put it, “have done an excellent job getting ahead of where the puck is skating.”

Stablecoins and prediction markets:
Speakers highlighted stablecoins for rapid transaction-volume growth and issuer profitability, noting “Tether is the most profitable company on the planet per employee.” A stablecoin is a digital asset designed to maintain a stable value, typically pegged to fiat currency. Prediction markets, defined as platforms that let users bet on event outcomes, were another fast-growing category. Kalshi and Polymarket moved past earlier doubts about wash trading (the practice of trading with oneself to create misleading volume) and election-only activity, and the Intercontinental Exchange invested about $2 billion in Polymarket this year.

Losers and policy shifts:
Panelists named high-profile losers, including Do Kwon, who received a 15-year prison sentence related to the Terra collapse that wiped about $40 billion from the market. They also criticized the prior U.S. SEC leadership as having a hostile enforcement period, saying it drove founders overseas before policy shifted in 2025 after former Chair Gary Gensler’s departure. The GENIUS Act, passed in July, created a federal framework for stablecoin issuance, reserves and oversight, while a market-structure bill saw its Senate Banking Committee markup delayed until 2026.

For a recording of the discussion, see the video of the discussion: https://www.youtube.com/watch?v=ry9MI57Pbjs

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