Author: hitesh.eth
Translated by: Deep Tide TechFlow
Pure substance, no false hopes.
Before you start reading, I hope you can temporarily set aside any preconceived notions and take a few minutes to carefully look at what I am about to share.
From a macro perspective, the investment themes in Web3 can be divided into two major categories: underlying infrastructure (infra) and application scenarios (apps).
Investments can essentially be divided into two types: one that may seem unremarkable in the short term but could yield substantial returns in the long run; and another that is 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 on corresponding risks.
Thus, people are more inclined to choose cyclical investments—these types of investments are usually short-term and only effective during specific bull market cycles.
2025 will become the 'regulatory year' for the cryptocurrency field.
The U.S. and some other major economies plan to introduce relevant regulations domestically. The introduction of these regulations will not only enhance the trust of traditional investors (especially the older generation) but will also filter out a few truly promising cryptocurrencies—only those with solid fundamentals and stable cash flow will stand out.
We can foresee a wave of new traditional investors entering the market. These investors hold 'old money' and will venture into the cryptocurrency space for the first time.
They will not blindly invest just because of market hype but will carefully study the projects, read reports and data, and only make investment decisions when it makes sense.
Against this backdrop, decentralized finance (DeFi) will become an investment theme favored by traditional investors, along with the first-layer protocols (L1) of blockchain.
However, due to the lower market cap of DeFi projects, their growth potential is greater, and they align closely with fundamentals and data. This year, some DeFi projects have already generated over $100 million in revenue, undoubtedly attracting the attention of traditional investors.
Traditional investors have a huge amount of capital, and sufficient funds are key to healthy market growth. Don't forget that many institutional investors are also led by traditional investors.
It is foreseeable that DeFi will ultimately become one of the key investment directions for top institutional investors.
BlackRock has begun collaborating 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 as past investors viewed BTC and ETH.
The long-term potential of AAVE may be viewed 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 brand new DeFi-native project, you can consider short-term gains, as these projects may also yield multiples or even higher returns.
In a DeFi-dominated crypto market, many emerging projects will emerge, while some established projects will regain attention. You will see a wave of price increases surrounding these projects.
In the DeFi space, many blue-chip applications (like Uniswap) are planning to transition to underlying infrastructure projects. This transition will further enhance the value potential of tokens, and some projects may announce adjustments to fee mechanisms next year, which you need to be prepared for.
These changes will inject strong momentum into the narrative of DeFi's development.
I expect DeFi to dominate at least two quarters of next year, similar to the performance of AI this year.
As for AI, I believe 2025 will be a year when AI faces widespread criticism in popular culture due to its rapid and uncontrolled expansion.
'Responsible AI' discussions will become a focal point.
Market activities around crypto AI infrastructure, AI agents, and Initial Agentic Offerings may enter an adjustment period due to the narrative of 'responsible AI.'
But before that, I expect AI agents to experience a round of bubble growth.
Currently, there are 13,000 agents in the market, and I expect this number to grow to at least 100,000.
Subsequently, we may enter a bubble phase and burst the following year.
Which quarter this occurs will depend on the timing of AI regulatory-related events.
Regulation will also spark interest in privacy infrastructure, so major projects involving confidential DeFi, privacy computing, privacy storage, and privacy reasoning will receive more attention, and this focus will also reflect in their asset performance (PA).
The meme market will remain active.
Although regulators may not support it, people will always find ways to get in, as it is impossible to completely block access.
Speculators will continue to look for opportunities among the 100,000 new coins added daily.
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 leaving some investment exposure for them.
2025 will also be a year for mobile Web3 wallets and super applications to come to the forefront.
Recently, a Web3 wallet company called Exodus went public on NASDAQ with a valuation of $1.2 billion, which may drive speculation in the coming year related to Web3 wallet tokens with strong revenue performance.
AI and DeFi will be the two core narratives of next year:
DeFi is expected to dominate;
AI agents may enter a bubble phase;
Meme speculation will attract more participants;
Privacy and DePIN (Decentralized Physical Infrastructure Network) will emerge in a certain quarter;
Web3 wallets will gain more attention and drive mainstream adoption through more user-friendly guidance and better experiences.
That concludes my sharing.
Please note, I am neither an astrologer nor an expert in the cryptocurrency field. I am just an ordinary person with some random thoughts about the market, so don't take my views too seriously.
