Author: hitesh.eth
Compiled by: Shen Chao 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'm about to share.
From a macro perspective, the investment themes of 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 seems unremarkable in the short term but may yield substantial returns in the long run; the other is exciting in the short term but may ultimately be worthless.
Most cryptocurrency investors enter this market in pursuit of quick and substantial returns, willing to take on corresponding risks.
Therefore, people are more inclined to choose cyclical investments—these investments are typically short-term and only effective during specific bull market cycles.
2025 will be the 'regulatory year' for the cryptocurrency space.
The United States 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 also filter out a few truly promising cryptocurrencies—only those with solid fundamentals and stable cash flow support 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; instead, they will carefully study the projects, read reports and data thoroughly, and only make investment decisions when it makes logical sense.
Against this backdrop, decentralized finance (DeFi) will become an investment theme favored by traditional investors, alongside the Layer 1 protocols of blockchain.
However, due to the lower market cap of DeFi projects, their growth potential is greater and aligns closely with fundamentals and data. This year, some DeFi projects have already generated over $100 million in revenue, which will undoubtedly attract the attention of traditional investors.
Traditional investors have massive capital, and adequate funding is key to the market's healthy growth. Don't forget that many institutional investors are also dominated by traditional investors.
It is foreseeable that DeFi will ultimately become one of the key layout directions for top institutional investors.
BlackRock has already 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, similar to how investors viewed BTC and ETH in the past.
The long-term potential of AAVE may be viewed as comparable to that of 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 several times or even higher returns.
In a DeFi-dominated crypto market, many emerging projects will successively appear, while some established projects will regain attention. You will see price surges surrounding these projects.
In the DeFi space, many blue-chip applications (like Uniswap) are planning to transform into underlying infrastructure projects. This transformation will further enhance the value potential of tokens, and there may be some projects announcing adjustments to transaction fee mechanisms next year, so be prepared for that.
These changes will inject strong momentum into the narrative of DeFi's development.
I expect DeFi will dominate at least two quarters next year, just as AI has this year.
As for AI, I believe 2025 will be a year where AI faces widespread criticism in popular culture due to its rapid and uncontrolled expansion.
Discussions around 'responsible AI' will be in the spotlight.
Market activities surrounding 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, I expect AI agents to experience a bubble-like growth.
There are currently 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 see it burst the following year.
When this occurs in which quarter will depend on the timeline of AI regulatory-related events.
Regulation will also spark interest in privacy infrastructure, so some major projects involving confidential DeFi, privacy computing, privacy storage, and privacy inference will receive more attention, which will also be reflected in their asset performance (PA).
The meme market will remain active.
Although regulators may not support it, people will always find ways to enter, as complete prevention is impossible.
Speculators will continue to seek 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 allocating a portion of your investment exposure to them.
2025 will also be a year for mobile Web3 wallets and super applications to shine.
Recently, a Web3 wallet company named Exodus went public on NASDAQ with a valuation of $1.2 billion, which may drive speculation next year around tokens related to Web3 wallets with strong revenue performance.
AI and DeFi will become the two core narratives for 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 Networks) will emerge in a certain quarter;
Web3 wallets will receive more attention and promote mainstream adoption through more convenient user guidance and higher quality experiences.
That concludes my sharing.
Please note that 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.
