Original title: Crypto Truths & Lies for the Year 2025
Original author: Ignas | DeFi Research
Original source: https://www.ignasdefi.com/
Compiled by: Daisy, Mars Finance.
BTC will reach $250,000 in 2025, and ETH will reach $12,000.
This is a prediction I just made up, which may or may not come true.
Most predictions are like this, although some predictions have (some) data to support them. For example, VanEck offers reasonable predictions, while Cathie Wood is known for exaggerated high figures. She predicts BTC will reach $500,000 by 2026 and $1 million by 2030. As for Saylor? He predicts it will reach $13 million by 2045.
Here is DLNews' brilliant summary of 2024 predictions.
Source: DLNews
But how profound and useful are price predictions? Besides making you more determined to 'diamond hands' hold, they do not provide actionable insights.
I suggest a different mental framework that not only makes you a better investor in 2025 but also helps you succeed in future investments.
'What important truths do very few people agree with you on?'
The question posed by Peter Thiel is a strong intellectual challenge because maintaining the status quo is much easier than independent thinking.
Matti presented his views on assessing investments at Zee Prime Capital through a re-framed question framework.
I believe he wrote one of the most important articles of 2024, prompting reflection on the current state of cryptocurrency and providing a mental framework for outperforming the market in 2025 and beyond.
'If you hear the current discussions and narratives, what do you think is real and obvious? What is an obvious lie? What is an unobvious truth, and what is an unobvious lie?' — Matti
Some examples of obvious truths from the last cycle include:
Higher interest rates are bearish for cryptocurrencies.
War is unfavorable for cryptocurrencies.
And some obvious lies include:
Crypto super cycle.
Bitcoin is an inflation hedge.
(3,3) Cooperation is sustainable and capable of long-term existence.
Obvious problems are easy to identify.
Matti explained: 'The distinction between the obvious and the unobvious can be redefined as popular vs. unpopular, or known vs. unknown based on existing data.'
'Unobvious truths require unique insights, while obvious truths can be seen from afar, but even then, they cannot be 100% certain, as nothing is truly certain. The line between the two is not necessarily binary, but perhaps more like a continuum.'
Unobvious truths and lies are harder to identify, but they provide insight into what is to come, especially when unobvious things become obvious. This is when the crowd rushes in, and FOMO (fear of missing out) begins to spread.
You want to be at the start of FOMO.
Some unobvious truths from the last cycle:
The UST collapse was just a matter of time.
FTX is a criminal operation.
L2 leads to liquidity fragmentation.
And some unobvious lies:
SOL is dead.
Gaming is a natural product-market fit (PMF) for cryptocurrency.
The new shiny L1 trading has ended.
Here are some examples from Matti's blog post.
I really like this approach and shared my thought process in a 2022 article about 'counter-narrative trading'.
To outperform the market, you must find 'ideas or investments that already exist but are not widely understood or are looked down upon by many.'
I identified RWA, DeFi options, SBTs, and Instadapp (INST) as potential counter-narrative trading opportunities. Although DeFi options and SBTs made no progress, RWA and INST performed quite well.
The key here, as always, is timing. INST took a year and a half to see significant gains.
Side note: writing a trading log is a superpower. It allows you to revisit past thoughts and understand how your thinking and investment strategies have evolved. Feel free to read my full article on counter-narrative trading.
In hindsight, identifying these truths and lies is easy, but predicting the future is genuinely challenging.
Really, give it a try. I posed this question on the X platform, and you can read some thoughts.
Before we continue, let's read Matti's full blog post for deeper background information.
In the remainder of this article, I will share some truths and lies about the current cycle.
I will start with what I think is obvious and then move on to the challenging unobvious parts. To gain more insights, I also sought opinions from some individuals in the crypto industry.
Here is the unified framework for 2025.
Obvious truths.
Widely accepted facts or outcomes based on observable evidence.
The combination of AI and cryptocurrency will persist.
In the past year, AI has dominated the thinking focus of the cryptocurrency community and may continue to do so in 2025.
Crypto 'diehards' longed for AI tokens, but few options were available, with TAO being the leading choice.
Everything changed with the explosion of AI agents. Now, we have crypto-native AI agents that post content on the X platform or trade on platforms like Polymarket while also launching tools to help launch these AI agents.
I believe that the combination of AI and cryptocurrency is an obvious truth that will persist.
This does not mean that AI agent tokens will continue to soar. Current AI agents are relatively simple (for example, AIXBT only scans data and others' opinions and re-presents them). Additionally, the notion that 2025 will become the super cycle for AI agents is also an obvious lie.
But bubbles ultimately inspire innovation, and just as DeFi continued to mature after the DeFi bubble burst, AI agents will persist.
Spot ETFs are bullish.
I am still surprised that so many people think ETFs are bearish. Some believe that 'Bitcoin (BTC) in ETFs is part of traditional finance (TradFi) packaging, a Trojan horse that will destroy Bitcoin from within.'
For Ethereum (ETH), ETFs may provide stronger bullish momentum than all ETH locked in L2, as traditional finance will allocate part of their crypto investment portfolio to BTC and ETH.
Digital up, brrrrr.
Stablecoins are the killer application/product market fit (PMF) for cryptocurrencies.
This is an insight from Stacy Muur, continuing from the last cycle.
However, in this cycle, stablecoins may ultimately surpass crypto trading, expanding into the fintech space.
PayPal already has a stablecoin, Revolut is launching its own stablecoin, and even Visa may launch a stablecoin, although this could affect their profit margins. As Delphi Digital researcher Robbie predicts, this move is 'clouded by the risk of disruption.'
Many projects perform better before TGE.
This viewpoint was also presented by Stacy Muur.
'My thought is that most protocols have much better overall metrics before launching tokens (with exceptions like $HYPE and $F). So, the demand for the product is stronger before the TGE than after.'
DeFi Made Here agrees with this. He cleverly stated:
'90% of chains/projects are garbage, with no organic use, and fake TVL supported by private trades.'
I share this viewpoint to remind you that we are in a very niche industry. Like venture capital (VC), we cannot expect all investments to moon.
In fact, most tokens will not survive for long and will show a downward trend. Our task is to find those game-changing exceptional tokens.
Obvious lies.
Airdrops are dead.
Low circulation and high FDV token issuance has caused significant damage, making investments in otherwise good protocols unworthy.
But I am bullish on 2025's airdrops because expectations have returned to rationality, and discussions related to airdrops are no longer prevalent.
Hyperliquid may not be the last great airdrop of this cycle. And now is not the time to stop clicking buttons.
This viewpoint was also shared by Aylo.
Crypto projects need venture capital to succeed.
This is another lesson we learned from low circulation and high FDV issuances. The venture capital moat has been narrowing year by year. With the rise of platforms like Echo and Legion, projects can now raise funds from a diverse pool of crypto-native investors.
Many VCs contribute little beyond providing funding and a logo. In contrast, attracting crypto-native investors creates a stronger interest alignment with the success of the investment.
However, lesser-known projects will still rely on venture capital. However, finding 'that 100x' opportunity is no longer the exclusive right of VCs.
Bullish.
(Memecoin, AI agents...) Super cycle
There is a word that should always keep you alert: 'super cycle'.
The Memecoin super cycle was once a hot topic until some old tokens, including 'dead' tokens like XRP and Litecoin, began to rise.
Now, AI agents have become the main focus. But this narrative will eventually lose momentum, replaced by a new narrative that has yet to enter the visibility of most people.
Next, transition directly from this lie to the one below...
Retail investors prefer memecoins.
This perspective comes from CryptoKoryo, who tracks narrative price performance and rotation.
His conclusion is very simple: 'Rotation always happens after people have already entered.' In simple terms, whenever someone says 'projects x, y, z (like sol, tao, hype, etc.) will dominate this cycle,' it is likely a lie.
To track this rotation, you can check out his new analysis tool dexu.ai.
Moreover, retail investors are no longer that naive: they can access Phantom wallets and find new narratives on Reddit, TikTok, and elsewhere.
In fact, an unobvious truth is that crypto-native users may ultimately buy tokens held by 'dumb retail' sourced from TikTok rather than tokens from the crypto community (CT).
DAOs are decentralized, efficient, 'smart', and transparent.
In 2024, I embarked on a new journey: to become a representative of multiple DAOs, including Aave, Lido, Instadapp, Arbitrum, Paraswap, and Uniswap.
The turning point was during the Compound DAO attack event, where the attacker managed to pass a vote that allocated $24 million in COMP tokens.
What is the problem? DAOs are too indifferent, and token holders are completely unaware of the existence of voting. It's really sad.
To empower DAOs, highlight key votes, and consider this as a potential career path, I decided to become a DAO representative.
In this process, I learned many lessons worth writing about in the future. But I also sought additional insights from Doo (from Stablelabs), as he has been running a DAO representation company for several years.
His insights confirmed the truth that many of us suspected:
DAOs are not truly decentralized, efficient, transparent, nor operated by 'smart money'.
Additionally, the financial reserves of DAOs are limited and may face bankruptcy.
Most DAOs are still led by founders or core teams and are relationship-based.
They also have protectionist tendencies.
DAOs can be protectionist.
For example: Uniswap DAO had no idea that Unichain was being developed. Hahaha :(
Why is this important?
We cannot continue to delude ourselves and the community; the current DAO model is unsustainable and needs to be disrupted. Whoever can fundamentally improve the DAO model will create a new successful business.
Unobvious truths.
Insights that are not easily noticed or widely acknowledged often require deeper understanding or unique analysis.
Bitcoin is a hedge against macroeconomic uncertainty.
The head of Blackrock's crypto division mocked those who insist BTC is a risk asset and trade based on unemployment rates, non-farm payroll data, or the ISM manufacturing index among crypto-native commentators/researchers.
Bitcoin cannot be both digital gold and a risk asset at the same time.
Blackrock claims in its 2024 research that Bitcoin is a unique diversification asset with the following characteristics:
Bitcoin, with its high volatility, is clearly a 'risk' asset. However, most of the risks and potential drivers of return that Bitcoin faces are fundamentally different from those of traditional 'risk' assets, making it unsuitable for most traditional finance frameworks—including the 'risk on' and 'risk off' frameworks adopted by some macro commentators.
Bitcoin, as a scarce, non-sovereign, decentralized global asset, has led some investors to view it as a safe haven during times of panic or geopolitical turmoil.
In the long term, Bitcoin's adoption trajectory may be driven by concerns over global currency stability, geopolitical stability, U.S. fiscal sustainability, and U.S. political stability. This is in direct contrast to how traditional 'risk assets' relate to these forces.
Bitcoin sometimes sells off at the start of significant macro events. However, chaos, turmoil, and potential currency printing are bullish for Bitcoin.
The danger is that commentators continue to portray Bitcoin as a risk asset, misleading traditional finance (TradFi) into thinking of Bitcoin as digital gold.
Perception may become reality.
Tokens do not need to have utility.
Almost all crypto projects ultimately issue tokens.
Think about it: which DeFi protocol cannot function without a token?
Uniswap can operate normally without UNI, and Aave, Maker, Fluid, Ethena... they can all function without tokens.
However, they all have tokens. Why? For governance? Community? Fundraising? …
In fact, I answered this question in a post from 2022.
A few years ago, launching a token required proof of some utility. That is no longer the case.
Memecoins have altered this perception the most, but the launch of Arkham's $ARKM token was a key moment.
If analysis platforms can issue tokens, then any crypto project can: wallets, extensions, marketing agencies...
This trend continues, with Nansen and Kaito's future token distributions among them, but 2025 is expected to become even crazier. Anything that can attract attention can be tokenized. Utility doesn't matter; attention, community, and users are key.
In fact, this is an insight Aylo shared with me: attention and price are correlated.
My advice is similar to DeFi protocols: click buttons, register for any analysis tools gaining attention, share your referral links, and avoid discussing 'why it needs a token'.
It needs a token because that makes us (early users and founders) rich.
DeFi is more decentralized than CeFi.
This is a spicy viewpoint brought by DeFi Made Here.
The centralization here does not refer to the decentralization or self-custody of the blockchain.
As DMH said, 'Few protocols have the majority of TVL, few risk providers work on the same projects, and there are vested interests in every project, etc.'
Here are the unedited quotes:
J.P. Morgan has about a 12% market share in the U.S., while Aave has a market share of 50-70%.
L2 is a multibillion-dollar unregulated multi-signature wallet.
Tether is a multi-signature wallet with a market cap of hundreds of billions.
Chainlink almost completely controls all value in DeFi.
The same risk assessment team is paid by different protocols, and there are clearly conflicts of interest.
Wait, wait, wait.
Thus, the argument is that the concentration of business and TVL in DeFi is higher than in CeFi. As evidenced by the collapse of USDC, reliance on a few participants can be detrimental to DeFi.
I am optimistic about DeFi. As the market develops, more participants will enter the industry, and risks will decrease over time.
The dominance of Tether USDT has ended.
USDT's dominance in the cryptocurrency stablecoin market is about to end, as the market landscape is continuously changing with the emergence of new players and use cases. Currently, Tether is leading in trading and collateral.
However, future trends will focus on two rapidly growing areas: savings products and payments.
Traditional finance is entering the on-chain savings market, while fintech and Web2 businesses are moving into the crypto payments space (if Visa launches a stablecoin, it will become an important player).
Although these categories are relatively small today, they may drive over $50 billion in new funding inflows within the next two years (Ethena's prediction).
Ethena and Sky are leading in the savings sector, and sUSDe is expected to benefit from the integration of traditional finance.
In the payment sector, the TON ecosystem is leveraging Telegram's network to build seamless crypto-native solutions.
Thus, the war of stablecoins is shifting from trading and store of value dominance to savings and payment innovations, marking the beginning of a new era in the crypto space.
Moreover, crypto regulations like MiCA are driving Tether out of the EU and other markets. As an EU citizen, although USDT remains an option in DeFi, I no longer use USDT.
Unobvious lies.
Fee switching is bullish for token prices.
'Be careful what you wish for, you might just get it.'
Token fee switching is often the top demand of token holders. However, revenue sharing is not a panacea for token prices; it is just one of the bullish narratives for tokens.
Remember the #realyield narrative from two years ago?
In fact, the revenue of most protocols is insufficient to bring significant price increases for tokens, as the income/market cap ratio in cryptocurrency is unusually high.
However, fee switching is not bad. It becomes problematic when protocols generate significant revenue, but the trading price of the token is below the market cap of DAO treasury assets. This has led to the shutdown of some DAOs.
I believe fee switching does not affect how high tokens can rise; rather, it sets a floor for the minimum trading price of the token. If revenue sharing takes effect and revenue is significant, then at some point, the token will become worth buying.
The bull market will continue into next year, likely ending in the fourth quarter.
I agree. It feels more like a prediction than a fact/lie.
I mention this because there is a strong consensus in CT that 2025 will be a year to sell, possibly at the beginning of the fourth quarter. Notably, Delphi predicts that a new all-time high for Bitcoin will occur in the fourth quarter of 2024.
But is it really that simple?
In 2023, the prevailing consensus is that Ethereum will outperform Bitcoin in 2024, while Solana will continue to 'die.'
However, like most consensus trades, I think there will be certain factors that break this bull market cycle, possibly delaying or extending it.
Indeed, it will be an interesting year.
The user experience/interface fragmentation of Ethereum L2 will persist.
I believe Ethereum's poor performance is largely due to its inferior user experience compared to Solana. The problem is obvious.
Ethereum is slower and more expensive than Solana.
The increase in the number of L2s has led to fragmentation in liquidity and user experience.
Developers must choose a specific L2 for their applications to succeed, rather than building on a unified Solana.
If you use Metamask, the poor user experience is very obvious. However, over time, user experience/interfaces are continually improving.
The OP superchain and similar alliances like Polygon and zkSync are enhancing the backend user experience. However, if Delphi Digital's prediction about the 'Fat Wallet' theory holds, user experience issues may be resolved by 2025.
'Fat Wallet' theory addresses Ethereum L2's inefficiencies by positioning wallets as key to solving the user experience problems for Ethereum L2.
As protocols and applications 'slim down', wallets become front-end aggregators, simplifying interactions such as bridging and liquidity management through chain abstraction.
By integrating payment for order flow (PFOF) and offering distribution as a service (DaaS), wallets can simplify access to decentralized applications (dApps), reduce friction, and improve transaction execution.
Wallets also leverage their close connection with users to create a more intuitive and seamless experience, addressing high conversion costs and establishing a smoother L2 onboarding process, ultimately promoting user adoption.
Now, with the rise of AI agents, user experiences are enhanced as agents can perform all the necessary bridging work for humans.
NFTs are dead.
This is an interesting perspective. Some feel it is obviously false, while others believe it is true. That's why I placed it in the 'not obviously a lie' category.
Currently, NFTs seem to be an obvious lie, especially due to the PENGU airdrop and its significant impact on the entire NFT space. But with few exceptions, NFTs have been losing value over the past year.
However, I am looking ahead to the next big trend in NFTs.
For me, 2024 is the year of Bitcoin Ordinals and the launch of PENGU. I hope NFTs can evolve beyond avatars and cultural icons.
Perhaps NFTs can evolve in the AI era to provide undeniable proof that photos are original and not AI-created or modified.
One thing is for sure: NFTs feel stagnant, but they are not stagnant.
Something revolutionary needs to be built.
What are your unobvious truths and lies?
You may disagree with my perspective, and that's fine! This means you have the potential to make money from things that are not yet consensus but will soon become consensus.
Builders need to go beyond the 'obvious' to seek unobvious truths to build lasting and meaningful projects. Buzzwords and trendy narratives (like the 'hot topics' in crypto) often lead to superficial efforts lacking real innovation.
Matti gave good advice in his blog.
For founders:
Align efforts with genuine curiosity and a first-principles mindset.
Avoid building solely based on popular trends or narratives.
And for most of my readers, as investors:
Evaluating a founder's vision is based on surface obvious truths or deeper, unique insights.
Unobvious truths are more likely to lead to breakthrough products and companies.
The ability to distinguish between obvious/unobvious truths and lies helps investors support ideas that truly have potential, rather than just hype.
So, please share your thoughts in the comments!
