Author: hitesh.eth
Compiled by: TechFlow
Pure hard stuff, no false hope.
Before you start reading, I hope you can put aside your existing preconceptions and take a few minutes to carefully look at what I am about to share.
From a macro perspective, Web3 investment themes can be divided into two categories: underlying infrastructure (infra) and application scenarios (apps).
Investments essentially fall into two categories: those that may seem mundane in the short term but could pay off big time in the long run, and those that may seem exciting in the short term but may ultimately be worthless.
Most cryptocurrency investors enter this market in pursuit of quick and substantial returns and are willing to take the corresponding risks.
Therefore, people are more inclined to choose cyclical investments - these investments are usually short-term and only effective within a specific bull market cycle.
2025 will be known as the “year of regulation” in the cryptocurrency space.
The United States and other major economies are planning to introduce relevant regulations in their countries. The introduction of such regulations will not only enhance the trust of traditional investors (especially the older generation), but also screen out a few cryptocurrencies with real potential - only those projects with solid fundamentals and stable cash flow will stand out.
We can expect a new wave of traditional investors to enter the market, with “old money” and who will be getting involved in cryptocurrencies for the first time.
They will not invest blindly just because of market hype, but will seriously research the projects, read reports and data carefully, and make investment decisions only when it makes sense.
In this context, decentralized finance (DeFi) will become an investment theme favored by traditional investors, and the other is the first layer protocol (L1) of the blockchain.
However, due to the low market cap of DeFi projects, there is more room for growth and it is highly consistent with fundamentals and data. This year, some DeFi projects have generated more than $100 million in revenue, which will undoubtedly attract the attention of traditional investors.
Traditional investors have a huge amount of funds, and sufficient funds are the key to the healthy growth of the market. Don’t forget that many institutional investors are also dominated by traditional investors.
It can be foreseen that DeFi will eventually become one of the important layout directions for top institutional investors.
BlackRock has begun working with DeFi projects, and this trend is gradually taking shape.
DeFi is not a cyclical investment; it is more like a long-term investment, just like how investors viewed BTC and ETH in the past.
AAVE’s long-term potential may be seen as comparable to ETH.
When you invest in blue-chip DeFi projects, you can focus on long-term development;
When you choose to invest in a new DeFi native project, you can consider short-term gains, which may also bring several times or even higher returns.
In a crypto market dominated by DeFi, many emerging projects will emerge one after another, and some old projects will regain attention. You will see a wave of price increases around these projects.
In the DeFi field, many blue-chip applications (such as Uniswap) are planning to transform into underlying infrastructure projects. This transformation will further enhance the value potential of Tokens, and some projects may announce adjustments to the fee mechanism next year, so you need to be prepared for this.
These changes will inject strong momentum into the DeFi development narrative.
I expect DeFi to dominate at least two quarters of next year, just as AI did this year.
As for AI, I think 2025 will be the year that AI is widely criticized in popular culture for its rapid and uncontrolled expansion.
Discussions on “responsible AI” will become a focus.
Market activities around crypto AI infrastructure, AI agents, and Initial Agentic Offerings may enter a period of adjustment due to the narrative of “responsible AI”.
But before that happens, I expect AI agents to experience a bubble-like growth.
There are currently 13,000 agents on the market, and I expect that number to grow to at least 100,000.
We may then enter a bubble phase that will burst the following year.
Exactly which quarter this happens will depend on the timing of events related to AI regulation.
Regulation will also trigger interest in privacy infrastructure, so some major projects involved in confidential DeFi, privacy computing, privacy storage, and privacy reasoning will receive more attention, and this attention will also be reflected in their asset performance (PA).
The meme market will continue to be active.
Even though regulators may not support it, people will always find a way in because it is impossible to block it completely.
Speculators will continue to look for opportunities in the 100,000 new coins added every day.
However, some established memes, such as DOGE and PEPE, may attract the attention of more serious investors.
Even if you don’t like memes, you should consider setting aside some investment exposure for them.
2025 will also be the year when mobile Web3 wallets and super apps come to the fore.
Recently, a Web3 wallet company called Exodus was listed on NASDAQ with a valuation of $1.2 billion, which may drive a speculative boom in tokens related to Web3 wallets with strong revenue performance next year.
AI and DeFi will become the two core narratives next year:
- DeFi is expected to dominate;
- AI agents may enter a bubble phase;
- Meme speculation will attract more people to participate;
- Privacy and DePIN (Decentralized Physical Infrastructure Network) will come to the fore in a certain quarter;
Web3 wallets will gain more attention and drive mainstream adoption through easier user onboarding and better experience.
The above is all I have to share.
Please note that I am neither an astrologer nor an expert in the cryptocurrency space. I am just a regular guy with some random thoughts about the market, so don’t take my opinions too seriously.
