What 2025 has in store for global markets

Advancements in technology, especially in artificial intelligence and digital assets, are poised to drive growth

AI advances will remain the key growth engine for markets, with companies investing heavily in infrastructure and integration. Reuters

In 2025, the global financial landscape seems to stand at the crossroads of volatility, opportunity and transformation. Amid policy uncertainty, geopolitical tensions and macroeconomic fluctuations, the year is set to challenge investors and traders, demanding sharper strategies and a keen eye for emerging trends.

The world is experiencing major shifts in governance, economics and culture, setting the stage for heightened volatility. This complexity could lead to significant sentiment swings, especially in traditional finance (TradFi) assets and decentralised finance (DeFi) markets.

Uncertainty is further amplified by factors like the US political landscape and the second Donald Trump presidency. However, technological innovation, particularly in artificial intelligence, and the continued evolution of digital assets are expected to be key drivers in 2025. I believe these assets have the potential to emerge stronger by year-end.

The tech sector: Steady growth with innovation at the helm

Following a stellar 2024, tech stocks may face some short-term pullbacks in 2025, but they are expected to end the year in a strong position, outperforming the broader market. However, growth will likely return to more traditional levels rather than repeating last year’s explosive rallies, as investors recalibrate their expectations for the sector.

AI advancements will remain the key growth engine, with companies heavily investing in artificial intelligence, its infrastructure and its integration into products and services. For example, Nvidia continues to dominate the AI hardware space with its cutting-edge GPUs, which are powering everything from generative AI models to autonomous vehicles. Similarly, Microsoft is expanding its AI footprint by integrating OpenAI tools across its Azure cloud platform and Office suite, solidifying its position as an innovation leader.

Beyond AI, sustainability-driven technologies will also play a big role. Companies focused on renewable energy solutions, such as Tesla with its solar and battery technology or Alphabet with its AI-powered energy efficiency tools, are also poised to capture investor attention.

In sum, with its unparalleled capacity for innovation, the tech sector is well-positioned to deliver steady growth over the long term, rewarding those who stay focused on transformative trends like AI and sustainability.

Crypto markets: Bullish momentum ahead

Many, including myself, believe that the crypto market is set for more growth in 2025, with "blue-chip" cryptocurrencies like Bitcoin and Ethereum expected to outperform both TradFi and DeFi assets by year-end. While events such as last year’s Bitcoin ETF approvals or the rollout of central bank digital currencies may dominate headlines, the real opportunities lie in long-term trends shaping the industry.

The approval of Bitcoin ETFs has increased institutional involvement, while advancements in blockchain scalability, like Ethereum’s Layer 2 solutions, are driving broader adoption. These developments are attracting not just speculators but also long-term investors who recognise the maturing infrastructure and growing utility of cryptocurrencies.

Rather than reacting to short-term volatility, investors should focus on sectors like decentralised finance, tokenised assets and blockchain-powered solutions, which are poised for sustainable growth over the next three to five years.

Bitcoin’s fixed supply and halving cycles, along with Ethereum’s energy-efficient proof-of-stake model, underscore the structural factors that could drive value.

While 2025 may bring volatility, it should be remembered that the most promising opportunities in crypto lie in long-term innovation and adoption. With patience and a focus on these trends, cryptocurrencies have the potential for strong performance in the years ahead.

Mena perspective: Growth and modernisation

The Middle East and North Africa region, particularly the Gulf countries, continues its growth trajectory, having outperformed most global markets in 2024. The region's commitment to modernisation, fraud reduction and regulatory advancements is expected to bolster investor confidence.

But while the trajectory is clear and there is little doubt as to the bullish sentiment for the next decade, there are some hurdles that need to be dealt with. The first is rising cost of living. How governments address this issue will have significant implications for everyday decision-making, including investments. The second is infrastructure modernisation. Continued improvement in infrastructure and regulatory frameworks will likely enhance market performance.

2025 is shaping up to be a year of volatility and transformation, offering both challenges and opportunities for traders and investors. By focusing on long-term trends, such as technological innovation and regional growth in Mena, and maintaining disciplined investment strategies, investors can navigate the complexities of the year with confidence.

Muhammad Rasoul is chief executive of neo-broker amana