Author: Ana Paula Pereira, CoinTelegraph; Edited by: Deng Tong, Jinse Finance
The year 2024 will be remembered as a milestone year in cryptocurrency history. From the surge in mainstream demand for Bitcoin-regulated financial products to the White House's anticipated friendliness towards cryptocurrencies, the Web3 industry has made significant progress despite facing considerable challenges along the way.
With its resilience finally paying off, and hopes for regulatory clarity combined with years of innovation and development, the industry is now looking forward to another promising year.
Experts are closely monitoring emerging trends that are expected to redefine the cryptocurrency landscape and impact the world at large.
RWA: A Use Case to Watch in 2025
If you have never heard of it, take note of this term: tokenization. It refers to the art of converting traditional assets into tokens that can be traded, even in small portions.
In 2024, developers, investors, and companies from various sectors are attracted by the trend of tokenizing real-world assets (RWA), as it releases liquidity for traditionally illiquid assets like real estate and allows people worldwide to access investments that smaller investors may not always be able to obtain.
"RWA is a use case to watch in 2025. The value of tokenized assets will double this year," predicted Sergey Gorbunov, CEO of Interop Labs and co-founder of Axelar Network.
The venture capital firm a16z also agrees with Gorbunov's viewpoint. In its annual report on trends in the cryptocurrency and blockchain industry, the venture capital firm stated, "Tokenizing unconventional assets may redefine revenue streams in the digital age."
According to data from RWA.xyz, the total value of tokenized assets is currently close to $13.9 billion, a 67% increase from $8.3 billion in January.
On-chain real-world assets are currently valued at over $13.8 billion. Source: RWA.xyz
Financial institutions are currently researching the risk framework for tokenized assets. In other words, they want to ensure compliance with legal requirements and address security risks and market volatility. According to Gurbunov, "Several large financial institutions will develop the risk framework needed to issue RWAs that can move across interconnected public blockchains."
Identity checks via AI agents
In recent years, several protocols have been exploring how to provide identity verification on-chain.
One of the advancements in this field is undoubtedly the emergence of zero-knowledge (ZK) proofs, a technology that allows individuals to prove themselves without disclosing any personal information. Startups developing this technology include Worldcoin, ONCHAINID, and RisedID.
Looking ahead, on-chain biometric verification is expected to be increasingly supported by artificial intelligence. In other words, AI will automatically check your identity on-chain. This may sound like a plot from a science fiction movie, but it is just one example of the fusion of AI and blockchain.
"We expect automated biometric identification and/or government ID checks to become the norm, rather than the exception," said Civic CEO Chris Hart. He continued:
"As AI agents increasingly act on behalf of users, a robust framework for authentication and authorization is crucial to control what these agents can do and for how long—especially in financial transactions."
DePIN is about to take off
Through decentralized physical infrastructure networks (DePIN), community-driven energy services, online storage, and internet connectivity have become a reality.
DePIN allows users to become stakeholders in the network, meaning they can own a part of the infrastructure they use, thereby creating new opportunities for financial inclusion.
Borderless Capital is a venture capital firm that has invested millions of dollars into DePIN protocols, claiming that the industry holds "the most compelling opportunities" in Web3.
Borderless partner Álvaro Gracia points out: "It is the only Web3 vertical industry that can generate income and fundamentals, completely unrelated to the cryptocurrency market, and can provide real-world value."
According to aggregated data from DePIN.Ninja, the market value of DePIN protocols has exceeded $50 billion.
Bitcoin brings more returns
Finally, it is impossible to discuss 2025 without mentioning Bitcoin. Bitcoin was once a disreputable asset, but it has made significant progress over the past decade, gaining widespread recognition on Wall Street and solidifying its position in the financial sector.
While developers are still working hard to upgrade the network, which now has more stakeholders than ever, startups are exploring other ways to unlock returns for holders.
"This is a natural demand from holders, including both retail and institutional. This is the native demand of holders," said Kevin He of Bitlayer, a Bitcoin layer 2 protocol supported by asset management company Franklin Templeton.
According to He, not only investors but also major BTC holders like MicroStrategy are seeking additional revenue sources through the fusion of Bitcoin and decentralized finance.
According to He, Bitcoin holders will soon be able to achieve annual returns of up to 40% from their holdings.
