Original author: Messari
Compiled by: TechFlow
It’s the end of another year, and it’s time for summary and outlook.
As the top research institution in the industry, Messari released its annual report (The Crypto Theses 2025) as scheduled last week, providing a comprehensive description and prediction of the development history of the encryption industry in 2024 and trends in 2025.
There are some bright spots in the report. For example, BTC is expected to mature as a global asset next year, and Meme’s attributes as a speculative export will continue to attract users.
The report has two main parts. It starts with "The Current Situation of Cryptocurrency", which includes shorter articles about the state of the crypto market in 2024; followed by "Research by Track", which reviews the narratives and forward-looking theories of the main tracks.
However, considering that the original report is 190 pages long and is time-consuming and laborious to read completely, we have refined and summarized the key contents of the original report, and presented the most important points, especially the predictions and prospects of each section.
(1) Macro environment: Breaking pessimistic expectations and providing strong support for encryption
key developments
The economic trend in 2024 has shattered most pessimistic expectations, and the U.S. economy has shown resilience beyond expectations. The Fed was able to implement relatively smooth policy shifts with 50 and 25 basis point rate cuts in September and November, respectively.
The S&P 500 rose about 27% for the year, ranking in the top 20% of historical performance, fully reflecting the market's confidence in a soft landing for the economy. It is worth noting that, except for the unwinding of the yen carry trade and short-term fluctuations caused by geopolitics, the market as a whole has maintained a steady upward trend.
The unique pattern of the encryption market
The crypto market faces a double test in 2024. On the one hand, it needs to deal with various risk factors in traditional markets, and on the other hand, it must overcome industry-specific challenges, including selling pressure from the German government, Mt Gox’s token distribution, and Tether’s investigation. The market went through an eight-month period of consolidation before the election acted as a breakout 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 policy since 2022, but has not yet entered a phase of substantial easing. This gradual policy adjustment is expected to provide stable support to the market;
The volatility of various assets decreased significantly after the election. According to historical experience, low volatility often leads to lower volatility. This environment is particularly conducive to the development of crypto assets such as Bitcoin and Ethereum;
Most important is a fundamental improvement in the regulatory environment. Even a relatively neutral regulatory stance would represent a significant improvement over the stringent controls of the past four years. This change is expected to eliminate the main concerns of institutional investors entering the market and bring more incremental funds to the market;
The stablecoin field may become a breakthrough. Bipartisan openness to stablecoin regulation creates favorable conditions for the advancement of relevant legislation in 2025;
(2) Institutional funds: full entry into the market
Dramatic changes in market structure
In 2024, the entry of institutional funds is no longer empty talk. The approval of Bitcoin and Ethereum ETFs marks formal recognition of the crypto asset class, providing easier access for institutional and retail investors;
BlackRock's IBIT sets record: first ETF to hit $3 billion AUM within 30 days of launch, and tops $40 billion in about 200 days. Demonstrates strong institutional demand for crypto derivatives;
Diversity of Institutional Participation
Institutional involvement extends far beyond ETF investing. Traditional financial institutions are deploying in multiple areas: significant progress has been made in asset issuance, tokenization, stablecoins and research;
The likes of Sky (formerly MakerDAO) and BlackRock have launched on-chain money market funds. Ondo Finance’s USDY (Tokenized Treasury Bond Fund) asset size reaches approximately US$440 million;
Fintech Integration
PayPal launched its stablecoin PYUSD on Solana in May, and Agora, backed by Nick Van Eck, also launched its stablecoin AUSD on multiple chains, backed by Van Eck (an asset management company) and hosted by State Street;
2025 Forecast
The depth and breadth of institutional participation is expected to expand further. Steady inflows into the ETF are likely to continue as BlackRock continues to position digital assets as a non-correlated asset class worthy of a small allocation. What’s more, institutions are looking for opportunities to innovate across multiple verticals to reduce costs, increase transparency, or speed up payment efficiencies;
What is particularly noteworthy is that traditional financial giants such as JPMorgan and Goldman Sachs are accelerating their deployment. Not only are they expanding their own blockchain platforms, they are also exploring a wider range of product offerings;
This trend shows that institutions no longer view crypto as just an investment asset, but are starting to take its potential as financial infrastructure seriously;
(3) Meme: The popularity will continue
2024 market landscape
Although Meme coins only account for 3% of the top 300 cryptocurrencies (excluding stablecoins) in terms of market capitalization, their trading volume continues to account for 6-7%, and even climbed to 11% recently;
A first-quarter rally led by politically-themed meme coins like Jeo Boden was followed by TikTok meme coins like Moodeng and Chill Guy, as well as AI agent concepts like Truth Terminal’s GOAT, which continued to drive momentum;
market drivers
Meme coins thrive not just from trends or user-friendly interfaces, but from two key conditions:
Excess Capital: As the overall crypto market appreciates, many traders have accumulated large amounts of capital but lack quality investment opportunities;
Sufficient block space: High-throughput networks such as Solana and Base provide a low-cost, efficient transaction environment;
This environment is particularly evident on Solana. Strong market performance in late 2023 and early 2024 allowed Solana users to accumulate significant capital.
The evolution of trading infrastructure
User-friendly trading platforms have significantly contributed to the popularity of meme coins. Apps like Pump.fun , Moonshot and Telegram bots simplify the process for retail traders;
Moonshot, in particular, bypasses traditional cryptocurrency deposit channels by supporting USDC payments on ApplePay, PayPal or Solana, and its intuitive interface and simple registration process attracted a large number of new retail investors;
2025 Forecast
Forecasting 2025, meme coins are expected to continue to grow, mainly due to several key factors:
Infrastructure support: High-throughput chains such as Solana, Base, Injective, Sei and TON provide sufficient block space so that meme currency transactions do not require high fees;
User experience optimization: Applications such as Moonshot and Pump.fun continue to lower entry barriers and simplify transaction processes, which are expected to attract more retail participants;
Macro-environmental fit: The attributes of meme coins as a speculative outlet, similar to gambling, may continue to attract users seeking entertainment and profit under the current macro-environment;
(4) Financing pattern: AI leads emerging investment themes
Market Overview
Crypto project financing is on an upward trend compared to 2023. Although the total amount of financing for startup projects and protocols fell by about 20% year-on-year (mainly affected by outliers in the first quarter of 2023), the market still saw a number of large financings;
Important financing cases
Monad Labs: raised $225 million in April, showing that infrastructure and L1 projects remain key investment areas for VCs;
Story Protocol: Completed $80 million in Series B financing, led by a16z, dedicated to converting intellectual property into programmable assets;
Sentient: Received US$85 million in financing, led by Thiel’s Founders Fund, focusing on open AGI development platforms;
Farcaster and Freechat: raised US$150 million and US$80 million respectively, indicating that the social field continues to receive capital attention;
The rise of AI and DePIN
The total amount of AI project financing increased by approximately 100% year-on-year, and the number of financing rounds increased by 138%;
The total amount of DePIN project financing increased by approximately 300% year-on-year, and the number of financing rounds increased by 197%;
AI rounds are particularly popular in accelerator programs like CSX and Beacon. Investors are showing strong interest in the intersection of crypto and AI.
Emerging investment themes
In addition to AI and DePIN, there are several funding trends worth watching in 2024:
The field of decentralized science is beginning to gain traction, with projects such as BIO Protocol and AMINOChain receiving funding;
VCs in the Asia-Pacific region are more inclined to invest in gaming protocols, especially projects launched on the TON blockchain;
The share of financing for NFT and Metaverse projects has dropped significantly compared to 2021 and 2022;
Experimentation continues in the social space, with projects such as Farcaster, DeSo and BlueSky receiving funding, albeit with limited past success;
(5) Encrypting users and adding new evidence
Market size breakthrough
According to a16z report, cryptocurrency monthly active addresses reached an all-time high of 220 million, a growth trend similar to early Internet adoption. While this number may include double counting (as many users use multiple wallets), it is still estimated to be 30-60 million real monthly active users after filtering;
Key cases for user growth in 2024
The breakthrough of Phantom wallet has made it the most popular wallet in the Solana ecosystem. It once surpassed WhatsApp and Instagram to enter the top ten in the IOS App Store;
The application of stablecoins in emerging markets: Sub-Saharan Africa, Latin America and Eastern Europe have begun to bypass the traditional banking system and directly adopt stablecoins; platforms such as Yellow Card, Bitso and Kuna promote adoption by providing services such as stablecoin exchange and payment APIs;
The explosion of Telegram Mini-Apps: Notcoin has over 2.5 million holders, Hamster Kombat attracts 200 million users, 35 million YouTube subscribers;
Practical application of Polymarket: It grew rapidly during the election, with nearly 1 million new accounts, and once became the second most downloaded news application on IOS;
Base and Hyperliquid drive CEX users on-chain: Base L2 provides a free Coinbase to Base transfer channel, and Hyperliquid provides perpetual contract traders with a high-performance trading experience similar to CEX;
2025 Forecast
The crypto ecosystem is no longer just gearing up for mass adoption, it’s already starting to happen;
User growth is shifting from a sudden, noisy entry model to a model of natural discovery and continuous growth through various applications. Meme coins, consumer applications like Phantom and Telegram, prediction market platforms and growing on-chain utility will continue to drive compound growth;
The next critical step is to make blockchain navigation more retail-friendly, which will be greatly improved through new innovations such as chain abstraction and aggregation front-ends;
(6) Bitcoin: This year is great, next year will be more mature
Key developments in 2024 – Price and institutional adoption
Starting from US$40,000, the ETF hit a new high of US$75,000 in Q1 after being approved, and exceeded the important mark of US$100,000 after Trump won the election;
Bitcoin market cap dominance rises to approximately 55%;
ETF issuers hold more than 1.1 million Bitcoins, of which BlackRock and Grayscale account for 45% and 19% respectively;
The ETF has only seen a single monthly net outflow in April since it was approved, with BlackRock's IBIT continuing to be the largest net buyer, with about $8 billion in inflows in November alone;
MicroStrategy continues to buy on a large scale, with the latest purchase of $2.1 billion in Bitcoin between December 2 and 8. It previously held about 420,000 Bitcoins, second only to Binance, Satoshi Nakamoto and ETF issuers;
Michael Saylor and MicroStrategy (MSTR) continue to place bets, and BTC-centric strategies have inspired other public companies such as Marathon Digital Holdings (MARA), Riot Platforms, and Semler Scientific to start accumulating BTC reserves;
2024 is also the year of BTC reduction, and the number of natural sellers of Bitcoin will also decrease over time;
network innovation
(1) The rise of Ordinals and Runes
Ordinals brings NFT capabilities to Bitcoin, Runes is launched as a new token standard, similar to Ethereum ERC-20;
The valuation of some Runes projects has reached nine figures, showing the market’s recognition of the expansion of the Bitcoin ecosystem;
(2) Breakthroughs in Bitcoin programmability and staking innovation
The emergence of BitVM brings the possibility of arbitrary computing to Bitcoin, and more than 40 Layer-2 projects are online on the testnet or mainnet;
CORE, Bitlayer, Rootstock and Merlin Chain lead in TVL;
Babylon was launched in Q3 as the first staking protocol for Bitcoin, and the first round of 1,000 BTC staking amount reached the upper limit within 6 blocks;
Liquid staking tokens such as Lombard’s LBTC began to emerge;
2025 Forecast
Bitcoin ETF inflows have greatly exceeded expectations, and over time, institutions are likely to slowly become the main driver of daily BTC price movements;
ETFs allow you to purchase spot Bitcoin without the use of leverage. Smoother and more consistent spot inflows from institutions should help Bitcoin mature as an asset by reducing reflexive, leverage-driven volatility;
The approval of a Bitcoin ETF could put BTC in the early to mid-stage stages of becoming the world’s leading store of value. In November, Bitcoin surpassed silver to become the eighth most valuable asset in the world, driven in part by ETF inflows throughout the year. Year-end trends suggest that ETF inflows will continue to increase in 2025, especially as Grayscale's GBTC turns to positive net flows;
In terms of regulation, the new Trump administration has shown a positive attitude towards cryptocurrencies and Bitcoin, making Bitcoin-related promises during the campaign. While Bitcoin quickly repriced after Trump’s victory, ultimately governments need to deliver on some of their claims;
Although we predict a low likelihood of this happening, a federal strategic Bitcoin reserve would be particularly impactful. The market appears to be approaching the Trump administration with cautious optimism, and if the president can deliver on some high-probability action items, it could build enough goodwill to sustain Bitcoin optimism moving forward;
Following the 2024 election, the impact of clear and positive cryptocurrency reform becomes a significant issue across all government sectors, and we believe cryptocurrencies are on the verge of gaining bipartisan support. The impact is significant and could help remove regulatory uncertainty over Bitcoin for the foreseeable future;
On Runes and Ordinals, we think the dust has mostly settled and the opportunities are enticing by 2025;
Magic Eden is a driving force in improving Bitcoin UI/UX, and if the Bitcoin ecosystem takes off, we expect them to be the clear winner;
Bitcoin programmability and BTC staking are still in their infancy, and early TVL growth is not enough to indicate actual demand; consumers largely favor the performance capabilities of networks such as Solana and Base. If this trend continues, Bitcoin Builders will face an uphill battle;
(7) Ethereum: Identity Crisis and Future Opportunities
2024 Performance Overview
Ethereum has experienced an extraordinary year. As the “second brother” in the crypto market, while competing with its big brother Bitcoin for the hard currency narrative, it also has to deal with the challenges of new public chain juniors such as Solana. Main performance:
Significant underperformance relative to other major crypto assets, particularly Bitcoin and Solana;
The Layer-2 ecosystem continues to grow, but mainnet activity has dropped significantly; ETH has experienced sustained inflation for the first time, rather than expected deflation;
Inflows were limited initially after the ETF was approved and have only recently begun to accelerate;
L2 expansion capacity increased by 15 times, with cumulative throughput reaching approximately 200 TPS;
The rapid growth of Base has triggered discussions that "the future of Ethereum is Coinbase", but the decentralization of the L2 ecosystem has led to the damage to user experience and developer experience;
Key Outlook for 2025
(1) L2 is better than L1
Layer-2 design allows for a more flexible execution environment than native Layer-1; the theoretical capacity of high-throughput L2 (such as MegaETH) far exceeds that of fast L1;
Application chains can achieve better trade-offs, such as transaction priority customization;
(2) 2 feasible models to increase value capture
Ethereum faces two paths of value capture:
Cost is not important route: current fees mainly come from speculative activities, and sustainability is questionable; token valuation should be based on "security requirements" rather than fees; the largest applications create the highest security requirements and drive the value of native assets;
Improve fee capture route: Based on native rollup, it can improve mainnet value capture and increase data availability fees; extend the base layer to compete with ordinary EVM Layer-2;
New opportunities for the entire ecosystem
A super rollup, an interconnected based-rollup network, or high-cost burning may all be possible paths to success;
Regaining crypto-native speculative market share will drive institutional interest;
The decentralized nature of the ecosystem makes it possible for any participant to facilitate this transition;
(8) Solana: From a chaser to a mainstream ecosystem
Key Performance in 2024
Solana has gone from a “post-FTX crash recovery” to a definitive breakout. Main achievements:
From the "two-hero competition" between Bitcoin and Ethereum to a "three-legged confrontation" pattern;
Network stability has significantly improved, with only one 5-hour outage throughout the year; DeFi total lock-up volume (TVL) increased from US$1.5 billion to more than US$9 billion; stablecoin issuance increased from US$1.8 billion to nearly US$5 billion;
Position yourself as a venue for speculation, especially through Memecoin trading. The seamless user experience of ecosystem wallets, as well as platforms like Pump.fun and Moonshot, make token issuance and trading easier than ever;
This flurry of on-chain activity has even pushed Solana’s on-chain fees to occasionally surpass those of Ethereum, underscoring the network’s accelerating momentum and retail appeal;
Key Outlook for 2025
(1) Ecosystem expansion
Looking forward to applications beyond speculation: We’re particularly excited about MetaDAO’s prediction markets, and the emerging Solana L2 ecosystem is worth watching to see if they can compete effectively with their counterparts on Ethereum;
AI trend groundbreaking: ai16z, has become one of the most trending repositories in all areas of Github. The Solana ecosystem not only embraces Artificial AI x Crypto, but leads the trend;
(2) Traditional financial interests
Under the ETF trend, investors may seek to invest in "tech stocks" in this space, and Solana will be the fastest horse;
It seems inevitable that a spot Solana ETF will come online within the next year or two, creating the perfect storm for an explosive second phase in the Solana story;
(3) Competition intensifies
A new batch of Layer 1 blockchains are expected to emerge next year (such as Monad, Berachain, and Sonic);
resurgent DeFi, AI agents and consumer applications led by platforms like Base and numerous upstart L2s;
(9) Outlook for other L1+ infrastructure in 2025
(Note: Due to space limitations, we will focus on interpreting the 2025 forecast and outlook at the beginning of this chapter. The 2024 summary can be found in the original report for details, and more information is also an integration of public and objective data.)
Next year we will see the release of Monad and Sonic as two general-purpose, high-throughput, "monolithic" L1s;
Both projects have amassed significant funding ($225 million for Monad and around $250 million for FTM tokens for Sonic) to attract developers and developers;
Berachain is one of L1’s most interesting experiments, with over 270 projects dedicated to supporting the network and developers and application teams showing significant interest after raising $142 million in Series A and B rounds;
Celestia’s Lazybridging proposal and Avail’s Nexus ZK proof-of-validation layer have the potential to establish meaningful network effects for modular L1 in the second half of 2025;
Unichain, if successful, will spark a wave of protocols that eschew L1 and build application-specific or domain-specific L2 to increase value accumulation and generate more revenue for token holders;
Alternative VMs (primarily Solana and Move VM) will continue to gain traction;
Avalanche9000 Combined with Avalanche’s BD strength in institutions and gaming, this is shaping up to be another strong year;
In 2025, the future of Cosmos remains uncertain;
Initia will be launched as L1, supporting 5 to 10 application-specific, interoperable L2 solutions. This strategic setup makes it possible for Initia to lead the next wave of application chain advancements;
On the interoperability track, pay attention to Across, Espresso, and Omni Network;
Follow Polygon's Agglayer on the ZK track. In 2025, it is expected that almost all infrastructure protocols will adopt ZK technology;
The lines between applications and infrastructure are becoming increasingly blurred, and modular projects such as Celestia, EigenDA, Avail, etc. may benefit from this;
10. DeFi Outlook for 2025
Base and Solana – Valuable Real Estate: We continue to see the prospect of Solana and Base DEX growing in share relative to DEX on other chains;
Vertical integration and composability: Protocols such as Hyperliquid and Uniswap have moved to owning their own infrastructure in order to configure network characteristics to benefit their applications;
Prediction Markets: We predict trading volumes may be down compared to previous election-driven trading months. To win, other protocols must be able to provide relevant markets in which bettors can continue to speculate, while incentivizing market makers;
RWA: As interest rates fall, tokenized treasury bonds are expected to face resistance; idle on-chain funds may gain more favor, and the focus may shift from purely importing traditional financial assets to exporting on-chain opportunities. Even if macroeconomic conditions change, RWA has the potential to sustain growth and diversify on-chain assets;
Points play: We expect points to remain at the core of protocols designed to guide user adoption through token distribution, powering markets and yield trading protocols. Going into 2025, the protocol is likely to refine its points program while cultivating a community of early adopters;
Yield trading protocols such as Pendle are poised for further growth, driven by new opportunities for yield farming and the speculative appeal of points-based incentives.
11. AI X Crypto Outlook for 2025
Bittensor and Dynamic TAO: the new AI coin casino
Each existing subnet (and future subnets) will have its own token, and they will essentially be tied to Bittensor’s native TAO token;
The battle for AI is a battle for talent, and Bittensor has a unique angle to attract talent — the subnet is showing early signs of producing high-quality research;
Don’t be surprised if Bittensor unexpectedly becomes the center of cutting-edge AI research in cryptocurrency next year;
Bittensor is not just a speculative “AI coin casino” but a platform with the ability to attract serious AI developers;
Decentralized model training: a stumbling block and a pivot
Rather than trying to compete with giants like OpenAI and Google by training large-scale base models, decentralized networks may shift their focus to fine-tuning smaller specialized models;
More experiments are expected next year in the area of small and specialized models. These models may be designed to perform specific tasks;
AI Agents and Meme Coins: An Experiment in Progress
Most AI agents would probably prefer to be on-chain;
Growing token valuations can fund continued development of AI Agents and boost social media engagement;
We believe talent density will continue to increase as more engineers pay attention;
As AI agency KOLs actively compete for attention on social media, this category will trump “static” meme coins;
As the open vs. closed discussion around AI continues, we expect cryptocurrencies to occupy an increasing part of the conversation;
12. DePIN Outlook for 2025
By 2025, we expect Energy DePIN to build $50-150 million in supply-side infrastructure while generating up to $50 million in demand-side sales;
As Helium Mobile prepares for further growth and DAWN launches its mainnet in 2025, the wireless space will solidify its status as a breakthrough use case in DePIN;
Revenue Forecast: The industry is expected to achieve 8-digit to sub-9-digit revenue by 2025;
RTK networks such as GEODNET are expected to expand the supply side, providing 90%-100% coverage in high-value areas of the EU and North America by the end of 2025. Additionally, annual revenue may grow to over $10 million;
Significant progress is expected in this vertical of weather collection networks in 2025;
Integration and partnerships between Energy and Mobility DePIN are expected to further enhance grid integration and energy harvesting data for EV batteries;
File storage DePIN is expected to generate $15-50 million in revenue across the sub-sector in 2025;
Data collection DePIN will increase in 2025, driven by the success of projects like Grass;
(13) Outlook for consumer applications in 2025
Playing airdrops will continue to be the primary way to attract players into the game. The “paid airdrop” strategy may become the new standard in 2025;
Mobile apps will be the defining trend of 2025;
In 2025, we expect Solana to continue to account for the largest share of Memecoin trading activity;
Ordinals are expected to be a category that continues to attract attention. Upcoming catalysts, such as potential CEX listings, airdrop-driven wealth effects and growing adoption of Asian markets, enable continued growth and broader appeal throughout the year;
14. CeFi Outlook for 2025
As the bull market continues and financing rates continue to rise, the supply of Ethena is likely to continue to expand;
Stablecoins with yields may not take significant share from Tether anytime soon;
With Howard Lutnick, Trump’s pick for Secretary of Commerce, managing Tether’s assets, the United States may completely change its hostile stance toward Tether;
The real innovation is likely to happen behind the scenes at orchestration companies like Bridge. Stablecoin APIs, such as those provided by Yellow Card, will enhance the ability of small businesses to accept stablecoins as a payment method globally;
On the exchange side, we will continue to see the convergence of on-chain and off-chain services. Coinbase and Kraken want to get as many people onboard their L2 as possible in 2025 and may offer incentives to do so;
The new administration will allow exchanges to be more lenient with the assets they choose to list. This trend could reach a fever pitch in 2025 as Binance, Bybit, and Coinbase race to list the most popular crypto assets.
(The above content is excerpted and reprinted with permission from partner MarsBit, original text link )
Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.
"Interpretation of Messari's outlook for the encryption industry in 2025: Bitcoin will be better next year, and Meme will continue to be popular." This article was first published on (Block Guest).
