Author: Messari
Translation: TechFlow
Introduction
It's the end of another year, and it's time to summarize and look forward.
As a top research institution in the industry, Messari released its annual report (The Crypto Theses 2025) as scheduled last week, which comprehensively describes and predicts the development history of the crypto industry in 2024 and the trends in 2025.
There are some highlights in the report, such as the forecast that BTC will mature as a global asset next year, and Meme's attribute as a speculative outlet will continue to attract users.
The report has two main sections. It starts with the “Crypto State”, which includes shorter articles on the state of the crypto market in 2024, and the “Sector Research”, which reviews the narratives and forward-looking theories of the major sectors.
However, considering the original report is 190 pages long, reading it in full is time-consuming; Deep潮 TechFlow has distilled and summarized the key content in the original report, presenting the most important points, especially the predictions and outlooks for each subsection.
Macro Environment: Breaking pessimistic expectations, providing strong support for crypto
Key developments
The economic trend of 2024 has shattered most pessimistic expectations, with the US economy displaying unexpected resilience. The Federal Reserve was able to implement rate cuts of 50 and 25 basis points in September and November, respectively, achieving a relatively smooth policy shift.
The S&P 500 index rose approximately 27% throughout the year, ranking among the top 20 historical performances, fully reflecting the market's confidence in a soft economic landing. Notably, aside from the unwind of yen carry trades and brief volatility due to geopolitical factors, the overall market maintained robust upward momentum.
Unique landscape of the crypto market
The crypto market faces a dual challenge in 2024. On one hand, it needs to cope with various risk factors from traditional markets, and on the other, it must overcome industry-specific challenges, including government sell-off pressures from Germany, Mt. Gox's token distribution, and investigations into Tether. The market experienced an 8-month consolidation period until the elections became a breakthrough catalyst.
2025 Forecast
The macro environment is expected to provide strong support for crypto assets. Specifically:
The Federal Reserve has begun to ease its tightening policies since 2022 but has not yet entered a substantive easing phase. This gradual policy adjustment is expected to provide stable support for the market;
Volatility across various assets significantly decreased after the elections. Historical experience shows that low volatility often breeds further low volatility, which is particularly favorable for the development of cryptocurrencies like Bitcoin and Ethereum;
Most importantly, the fundamental improvement in the regulatory environment. Even a relatively neutral regulatory stance will bring significant improvements compared to the stringent controls of the past four years. This change is expected to eliminate major concerns for institutional investors entering the market, bringing in more incremental capital;
The stablecoin sector may become a breakthrough. The bipartisan openness towards stablecoin regulation creates favorable conditions for advancing relevant legislation in 2025;
Institutional capital: comprehensive entry
Significant changes in the market landscape
In 2024, institutional capital influx is no longer mere talk. The approval of Bitcoin and Ethereum ETFs marks the formal recognition of the crypto asset class, providing easier access for both institutional and retail investors;
BlackRock's IBIT creates records: the first ETF to reach $3 billion AUM within 30 days of issuance, and surpassing $40 billion in approximately 200 days. This shows strong institutional demand for crypto derivatives;
Diversification of institutional participation
Institutional participation goes far beyond ETF investments. Traditional financial institutions are making significant progress across multiple areas: asset issuance, tokenization, stablecoins, and research;
Institutions like Sky (formerly MakerDAO) and BlackRock have launched on-chain money market funds. Ondo Finance's USDY (tokenized government bond fund) has reached approximately $440 million in assets;
Fintech integration
PayPal issued its stablecoin PYUSD on Solana in May, while Agora, supported by Nick Van Eck, also launched its stablecoin AUSD on multiple chains, with the asset backed by Van Eck (asset management company) and custodied by State Street;
2025 Forecast
The depth and breadth of institutional participation are expected to further expand. As BlackRock continues to position digital assets as a non-correlated asset class worthy of a small allocation, steady inflows into ETFs may persist. More importantly, institutions are searching for innovative opportunities across multiple verticals to reduce costs, improve transparency, or accelerate payment efficiency;
Particularly noteworthy is the acceleration of traditional financial giants like JPMorgan and Goldman Sachs. They are not only expanding their own blockchain platforms but also exploring a broader range of product offerings;
This trend indicates that institutions no longer view crypto merely as an investment asset but are beginning to take its potential as financial infrastructure seriously;
Meme: The heat will continue
2024 Market Landscape
Meme coins, while only accounting for 3% of the market cap among the top 300 cryptocurrencies (excluding stablecoins), consistently represent 6-7% of trading volume, recently even climbing to 11%;
The surge driven by politically themed meme coins like Jeo Boden in Q1 was followed by TikTok meme coins (like Moodeng and Chill Guy) and AI agent concepts (like Truth Terminal's GOAT) continuing to drive this momentum;
Market Drivers
The prosperity of meme coins is not only driven by trends or user-friendly interfaces but also benefits from two key conditions:
Excess capital: As the crypto market appreciates overall, many traders have accumulated large amounts of capital but lack quality investment opportunities;
Ample block space: High-throughput networks like Solana and Base provide a low-cost, efficient trading environment;
This environment is particularly evident on Solana. The strong market performance at the end of 2023 and the beginning of 2024 has allowed Solana users to accumulate significant capital.
Evolution of trading infrastructure
User-friendly trading platforms have significantly boosted the popularity of meme coins. Applications like Pump.fun, Moonshot, and Telegram bots have simplified the operational process for retail traders;
Especially Moonshot, which has bypassed traditional cryptocurrency deposit channels by supporting payments via ApplePay, PayPal, or USDC on Solana, its intuitive interface and simple registration process have attracted a large number of new retail investors;
2025 Forecast
Forecast for 2025, meme coins are expected to continue growing, mainly due to several key factors:
Infrastructure Support: High-throughput chains like Solana, Base, Injective, Sei, and TON provide ample block space, allowing meme coin transactions without incurring high costs;
User experience optimization: Applications like Moonshot and Pump.fun continue to lower entry barriers and simplify trading processes, likely attracting more retail participants;
Macro environment fit: The speculative nature of meme coins, similar to gambling, is likely to continue attracting users seeking entertainment and profit in the current macro environment;
Financing landscape: AI leads emerging investment themes
Market Overview
Crypto project financing shows an upward trend compared to 2023. Although the total amount of financing for start-ups and protocols decreased by about 20% year-on-year (mainly due to anomalies in Q1 2023), the market still saw several large financing rounds;
Important financing cases
Monad Labs raised $225 million in April, showing that infrastructure and L1 projects remain a key investment area for VCs;
Story Protocol completed a $80 million Series B financing round led by a16z, aimed at converting intellectual property into programmable assets;
Sentient secured $85 million in financing, led by Thiel's Founders Fund, focusing on open AGI development platforms;
Farcaster and Freechat raised $150 million and $80 million respectively, indicating sustained capital attention in the social arena;
The rise of AI and DePIN
AI project financing has increased year-on-year by about 100%, with financing rounds increasing by 138%;
DePIN project financing has increased year-on-year by about 300%, with financing rounds increasing by 197%;
AI rounds are particularly popular in accelerator projects like CSX and Beacon. Investors have shown strong interest in the intersection of crypto and AI.
Emerging investment themes
In addition to AI and DePIN, several other noteworthy financing trends emerged in 2024:
The decentralized science field is beginning to receive attention, with projects like BIO Protocol and AMINOChain securing funding;
VCs in the Asia-Pacific region are more inclined to invest in gaming protocols, especially those launched on the TON blockchain;
The share of financing for NFT and metaverse projects has noticeably declined compared to 2021 and 2022;
The social sector continues to experiment, with projects like Farcaster, DeSo, and BlueSky receiving funding support, despite limited past success stories;
Crypto users, new evidence of growth
Market size breakthrough
According to a16z's report, the number of active addresses in cryptocurrency reached a historic high of 220 million, with growth trends similar to early internet adoption. Although this number may contain duplicates (since many users have multiple wallets), estimates still suggest there are 30-60 million real monthly active users after filtering;
Key user growth cases for 2024
The breakthrough of the Phantom wallet, which has become the most popular wallet in the Solana ecosystem, even ranking in the top ten in the iOS app store, surpassing WhatsApp and Instagram;
The application of stablecoins in emerging markets: Sub-Saharan Africa, Latin America, and Eastern Europe are beginning to bypass traditional banking systems and directly adopt stablecoins; platforms like Yellow Card, Bitso, and Kuna are promoting adoption by offering stablecoin exchange and payment APIs;
The explosion of Telegram Mini-Apps: Notcoin has over 2.5 million holders, Hamster Kombat attracted 200 million users, and 35 million YouTube subscribers;
Polymarket's actual application: Rapid growth during the elections, adding nearly 1 million accounts and once becoming the second most downloaded news app on iOS;
Base and Hyperliquid drive CEX users on-chain: Base L2 provides a free transfer channel from Coinbase to Base, and Hyperliquid offers a CEX-like high-performance trading experience for perpetual contract traders;
2025 Forecast
The crypto ecosystem is no longer just preparing for mass adoption but has started to realize it;
User growth is shifting from sporadic, noisy entry patterns to a more natural discovery and sustained growth model through various applications. Meme coins, consumer applications (like Phantom and Telegram), prediction market platforms, and the growing on-chain utility will continue to drive compound growth;
The next key step is to make blockchain navigation more retail-friendly, which will be greatly improved through innovations like chain abstraction and aggregated frontends;
Bitcoin: This year is beautiful, next year will be more mature
Key developments in 2024
Prices and institutional adoption
Starting at $40,000, following ETF approval, it reached a new high of $75,000 in Q1, and broke through the important threshold of $100,000 after Trump's victory;
Bitcoin's market cap dominance rises to about 55%;
ETF issuers hold over 1.1 million Bitcoins, with BlackRock and Grayscale accounting for 45% and 19% respectively;
Since the ETF approval, there was only one month in April with net outflows. BlackRock's IBIT continues to be the largest net buyer, with about $8 billion inflows in November alone;
MicroStrategy continues to make large-scale purchases, with the latest purchase of $2.1 billion worth of Bitcoin between December 2 and 8, holding approximately 420,000 Bitcoins, second only to Binance, Satoshi Nakamoto, and ETF issuers;
Michael Saylor and MicroStrategy (MSTR) continue to dollar-cost average, with a BTC-centric strategy incentivizing other publicly traded companies like Marathon Digital Holdings (MARA), Riot Platforms, and Semler Scientific to start accumulating BTC reserves;
2024 is also the BTC halving year, and the natural seller count of Bitcoin will decrease over time;
Network innovation
The rise of Ordinals and Runes
Ordinals bring NFT functionality to Bitcoin, with Runes launching as a new token standard, similar to Ethereum's ERC-20;
Some Runes projects have valuations reaching nine digits, showing the market's recognition of Bitcoin's ecosystem expansion;
The breakthrough in Bitcoin's programmability and staking innovation
The emergence of BitVM brings the possibility of arbitrary computation to Bitcoin, with over 40 Layer-2 projects launching on testnets or mainnets;
CORE, Bitlayer, Rootstock, and Merlin Chain lead in TVL;
Babylon launched as the first staking protocol for Bitcoin in Q3, with the first round of 1000 BTC staking capacity reaching its limit within 6 blocks;
Liquid staking tokens like LBTC from Lombard are starting to emerge;
2025 Forecast
The inflows from Bitcoin ETFs greatly exceeded expectations, and over time, institutions are likely to gradually become the main driving force behind daily BTC price movements;
ETFs can purchase spot Bitcoin without using leverage. Inflows from institutions are smoother and more consistent, which should reduce reflexive, leverage-driven volatility, helping Bitcoin mature as an asset;
The approval of Bitcoin ETFs may place BTC in the early to mid-stage of becoming the leading global store of value. In November, Bitcoin surpassed silver to become the eighth most valuable asset globally, partly due to ETF inflows throughout the year. Year-end trends suggest that ETF inflows will continue to increase in 2025, especially as Grayscale's GBTC shifts to positive net flows;
In terms of regulation, Trump's new government has shown a positive attitude toward cryptocurrencies and Bitcoin, making commitments related to Bitcoin during the campaign. Although Bitcoin quickly repriced after Trump's victory, the government will ultimately need to follow through on some of their promises;
Although we predict the likelihood of this happening is low, a federal strategic Bitcoin reserve would be particularly influential. The market seems to treat the Trump administration with cautious optimism, and if the president can achieve some of the more likely action items, it may establish enough goodwill to sustain Bitcoin's positive sentiment going forward;
After the 2024 elections, the impact of clear and positive cryptocurrency reform becomes a significant issue for all government departments, and we believe cryptocurrencies are about to gain bipartisan support. Its impact is substantial and may help eliminate regulatory uncertainties surrounding Bitcoin in the foreseeable future;
Regarding Runes and Ordinals, we believe the dust has mostly settled, and the opportunities by 2025 are very enticing;
Magic Eden is a driving force for improving Bitcoin's UI/UX, and if the Bitcoin ecosystem takes off, we expect them to be clear winners;
The programmability and BTC staking of Bitcoin are still in their infancy, and early TVL growth is not yet sufficient to indicate actual demand; consumers largely favor the performance capabilities of networks like Solana and Base, and if this trend continues, Bitcoin builders will face a tough battle;
Ethereum: Identity crisis and future opportunities
2024 Performance Overview
Ethereum has had an extraordinary year. As the 'second-in-command' of the crypto market, it competes with Bitcoin's narrative as hard currency while also facing challenges from new public chains like Solana. Key performances:
Significantly underperformed relative to other major crypto assets, especially compared to Bitcoin and Solana;
Layer-2 ecosystems continue to grow, but mainnet activity has noticeably decreased; ETH has experienced sustained inflation for the first time rather than the expected deflation;
Initial capital inflows after the ETF approval were limited, but recently began to accelerate;
L2 scalability has improved 15 times, with a cumulative throughput of about 200 TPS;
Base's rapid growth has sparked discussions about 'Ethereum's future is Coinbase', but the decentralization of the L2 ecosystem has degraded user and developer experiences;
2025 Key Outlook
L2 is better than L1
Layer-2 designs allow for more flexible execution environments, superior to native Layer-1; high-throughput L2s (like MegaETH) have theoretical capacities far exceeding fast L1s;
Application chains can achieve better trade-offs, such as customized transaction priority;
Two feasible models for increasing value capture
Ethereum faces two paths for value capture:
The route where fees don't matter
Current fees mainly stem from speculative activities, with sustainability in question;
Token valuations should be based on 'security demand' rather than fees; maximum applications generate the highest security demand, driving the value of native assets;
Enhancing the fee capture route
Native rollups can enhance mainnet value capture and increase data availability fees;
Expand the base layer to compete with conventional EVM Layer-2;
Overall new opportunities in the ecosystem
A super rollup, interconnected based-rollup networks, or high-fee burning could all become successful paths;
Regaining market share in the crypto-native speculative market will drive institutional interest;
The decentralized nature of the ecosystem allows any participant to contribute to this transition;
Solana: From challenger to mainstream ecosystem
Key performances in 2024
Solana has transitioned from 'recovery after the FTX collapse' to a point of certainty. Key achievements:
Transition from the 'duopoly competition' between Bitcoin and Ethereum to a 'tripod' structure;
Network stability has significantly improved, with only one 5-hour interruption occurring throughout the year; DeFi's total locked value (TVL) grew from $1.5 billion to over $9 billion; stablecoin issuance increased from $1.8 billion to nearly $5 billion;
Positioning itself as a trading venue, particularly through meme coin trading. The seamless user experience of ecosystem wallets, along with platforms like Pump.fun and Moonshot, has made token issuance and trading easier than ever;
This series of on-chain activities even drove Solana's on-chain fees to occasionally surpass Ethereum, highlighting the network's acceleration and retail attractiveness;
2025 Key Outlook
Ecosystem expansion
Expect applications that go beyond speculation: We are particularly excited about the prediction market of MetaDAO, and the emerging Solana Layer 2 ecosystem is worth paying attention to see if they can effectively compete with their counterparts on Ethereum;
AI trend pioneering: ai16z has become one of the most trend-valuable repositories across all domains of GitHub. The Solana ecosystem not only embraces AI x Crypto but leads this trend;
Interest from traditional finance
Under the ETF trend, investors may seek to invest in 'tech stocks' in this field, with Solana becoming the fastest horse;
A spot Solana ETF seems inevitable within the next one or two years, creating a perfect storm for the explosive second phase of the Solana story;
Increased competition
A new wave of Layer 1 blockchains (like Monad, Berachain, and Sonic) is expected to emerge next year;
A resurgence of DeFi, AI agents, and consumer applications led by platforms like Base and numerous new Layer 2s;
Other L1 + Infrastructure 2025 Outlook
Deep潮 Note: Due to space constraints, from this chapter we focus on interpreting its sections regarding 2025 forecast outlooks. The summary of 2024 can be found in the original report, which also integrates more publicly available objective information.
Next year, we will see Monad and Sonic launch as two universal, high-throughput, 'holistic' L1s;
Both projects have amassed significant funding ($225 million for Monad and approximately $250 million in FTM tokens for Sonic) to attract developers and development teams;
Berachain is one of the most interesting experiments in L1, having raised $142 million in Series A and B funding, with over 270 projects dedicated to supporting the network, showing great interest from developers and application teams;
Celestia's Lazybridging proposal and Avail's Nexus ZK proof verification layer could establish meaningful network effects for modular L1 in the second half of 2025;
If Unichain succeeds, it could trigger a wave of protocols—bypassing L1 and building application-specific or domain-specific L2s to increase value accumulation and generate more income for token holders;
Alternative virtual machines (mainly Solana and Move VM) will continue to receive attention;
Avalanche9000, combined with Avalanche's BD strength in institutional and gaming sectors, is expected to be another strong year;
In 2025, the prospects for Cosmos remain uncertain;
Initia will launch as L1, supporting 5 to 10 application-specific, interoperable L2 solutions. This strategic setup positions Initia to lead the next wave of application chain advancements;
In the interoperability race, focus on Across, Espresso, and Omni Network;
In the ZK race, focus on Polygon's Agglayer. By 2025, nearly all infrastructure protocols are expected to adopt ZK technology;
The boundaries between applications and infrastructure are becoming increasingly blurred, with modular projects like Celestia, EigenDA, Avail, etc., likely to benefit from this;
DeFi 2025 Outlook
Base and Solana - Valuable Real Estate: We continue to see the growing prospect of Solana and Base DEX gaining share relative to other DEXs on different chains;
Vertical integration and composability: Protocols like Hyperliquid and Uniswap have shifted towards owning their own infrastructure to configure network features for their applications' benefit;
Prediction markets: We predict that trading volume may decline compared to trading months driven by previous elections. To win, other protocols must provide relevant markets for bettors to speculate on continuously while incentivizing market makers;
RWA: With declining interest rates, tokenized government bonds are expected to face resistance; idle on-chain funds may gain more favor, shifting the focus from purely importing traditional financial assets to exporting on-chain opportunities. Even if macroeconomic conditions change, RWA has the potential to maintain growth and diversify on-chain assets;
Point systems: We expect that points will still be at the core of protocols aimed at guiding user adoption through token distribution, powering market and yield trading protocols. As we enter 2025, protocols may refine their point systems while nurturing early adopter communities;
Driven by new opportunities in yield farming and the speculative appeal of point-based incentives, yield trading protocols like Pendle are expected to grow further.
AI X Crypto 2025 Outlook
Bittensor and Dynamic TAO: A new type of AI coin casino
Each existing subnet (as well as future subnets) will have its own token, and they will essentially be associated with Bittensor's native TAO token;
The AI race is a talent race, and Bittensor has a unique angle to attract talent—subnets show early signs of producing high-quality research;
If Bittensor unexpectedly becomes the center of cutting-edge AI research in the cryptocurrency space next year, don't be surprised;
Bittensor is not just a speculative 'AI coin casino', but a platform capable of attracting serious AI developers;
Decentralized model training: a stumbling block and a pivot
Decentralized networks will not attempt to compete with giants like OpenAI and Google by training large-scale foundational models but may instead focus on fine-tuning smaller, specialized models;
More experiments in small and specialized models are expected next year. These models may be designed to perform specific tasks;
AI agents and meme coins: ongoing experiments
Most AI agents may prefer to operate on-chain;
The increasingly growing token valuations can provide funding for the sustainable development of AI agents and promote participation on social media;
We believe that as more engineers pay attention, talent density will continue to increase;
As AI agent KOLs actively compete for attention on social media, this category will surpass 'static' meme coins;
As discussions around AI's openness and closure continue, we expect cryptocurrencies to occupy an increasingly larger part of the conversation;
DePIN 2025 Outlook
By 2025, we expect Energy DePIN to build supply-side infrastructure worth $50-150 million, generating up to $50 million in demand-side revenue;
As Helium Mobile prepares for further growth and DAWN is set to launch its mainnet in 2025, the wireless field will solidify its position as a breakthrough use case in DePIN;
Revenue forecast: The industry is expected to achieve single-digit to low-double-digit million revenues by 2025;
RTK networks like GEODNET are expected to expand their supply side, providing 90%-100% coverage in high-value areas of the EU and North America by the end of 2025. Additionally, annual revenues may grow to over $10 million;
The weather collection network in this vertical field is expected to make significant progress in 2025;
The integration and partnerships between Energy and Mobility DePIN are expected to further enhance grid integration and energy collection data from electric vehicle batteries;
In 2025, document storage DePIN is expected to generate revenues of $15-50 million across the entire sub-industry;
Driven by the success of projects like Grass, data collection DePIN is expected to increase in 2025;
Consumer application 2025 Outlook
Playing airdrops will continue to be a major way to attract players into the game. The 'paid airdrop' strategy may become the new standard in 2025;
Mobile applications will become the decisive trend in 2025;
In 2025, we expect Solana to continue to hold the largest share of Memecoin trading activity;
Ordinals are expected to become a category that continues to attract attention. Upcoming catalysts, such as potential CEX listings, airdrop-driven wealth effects, and the growing popularity in Asian markets, will achieve sustained growth and broader appeal throughout the year;
CeFi 2025 Outlook
With the continuation of the bull market and rising financing rates, Ethena's supply may continue to expand;
Yield-bearing stablecoins may not quickly take significant market share from Tether;
Trump's appointed Secretary of Commerce Howard Lutnick manages Tether's assets, and the US may completely change its hostile stance towards Tether;
Real innovation is likely to happen behind the scenes of orchestration companies like Bridge. Stablecoin APIs (like those provided by Yellow Card) will enhance the ability of small businesses to accept stablecoins as payment worldwide;
In terms of exchanges, we will continue to see integration of on-chain and off-chain services. Coinbase and Kraken hope to onboard as many people as possible to their Layer 2 by 2025, potentially offering incentives for this;
The new government will allow exchanges to be more lenient with the assets they choose to list. As Binance, Bybit, and Coinbase compete to list the most popular crypto assets, this trend may reach a fever pitch in 2025.
