Original author: Messari
Compiled by: TechFlow
Reprint: Lawrence, Mars Finance
It's the end of another year, time for recap and outlook.
As a top research institution in the industry, Messari recently published its annual report (The Crypto Theses 2025), comprehensively describing and predicting the development history of the crypto industry in 2024 and trends for 2025.
The report highlights some key points, such as BTC maturing as a global asset next year, and meme coins continuing to attract users as a speculative outlet.
The report has two main parts. The first starts with the 'state of cryptocurrency,' including a brief article on the state of the crypto market in 2024; the second is 'sector research,' reviewing the narratives and forward-looking theories of major sectors.
However, considering that the original report is 190 pages long, reading it in its entirety is time-consuming. Therefore, we have distilled and summarized the key content from the original report, presenting the most important points, especially the predictions and outlook sections of each subsection.
Macro environment: Breaking pessimistic expectations to provide strong support for crypto.
Key Developments
The economic trends of 2024 break most pessimistic expectations, with the U.S. economy showing unexpected resilience. The Federal Reserve was able to implement rate cuts of 50 and 25 basis points in September and November, respectively, achieving a relatively smooth policy shift.
The S&P 500 index rose about 27% over the year, ranking among the top 20 historical performances, fully reflecting the market's confidence in a soft landing for the economy. Notably, apart from short-term fluctuations due to yen arbitrage trades being unwound and geopolitical issues, the market maintained a robust upward trajectory.
The unique landscape of the crypto market
The crypto market faces a dual test in 2024. On one hand, it needs to address various risk factors from traditional markets, and on the other hand, it must overcome industry-specific challenges, including government sell-off pressures in Germany, token distribution from Mt. Gox, and investigations into Tether. The market underwent an 8-month consolidation period until the elections became a breakthrough catalyst.
2025 Predictions
The macro environment is expected to provide strong support for crypto assets. Specifically:
The Federal Reserve has begun to ease the tightening policies from 2022, but has not yet entered a substantive easing phase. This gradual policy adjustment is expected to provide stable support for the market.
Volatility across various assets significantly decreased post-election. Historically, low volatility tends to breed further low volatility, a condition particularly favorable for the development of crypto assets like Bitcoin and Ethereum.
Most importantly, the fundamental improvement of the regulatory environment. Even a relatively neutral regulatory stance will bring significant improvements compared to the strict controls of the past four years. This change is expected to alleviate major concerns for institutional investors entering the market, bringing in more incremental funds.
The stablecoin sector may become a breakthrough area. The bipartisan open attitude toward stablecoin regulation creates favorable conditions for advancing related legislation in 2025.
Institutional funds: Full entry
Market landscape shift
In 2024, the entry of institutional funds is no longer just talk. The approval of Bitcoin and Ethereum ETFs marks the formal recognition of the crypto asset class, providing easier access channels for institutional and retail investors.
BlackRock's IBIT created a record: the first ETF to reach $3 billion AUM within 30 days of issuance, and it broke through $40 billion in about 200 days. This shows strong institutional demand for crypto derivatives.
Diversification of institutional participation
Institutional participation goes far beyond ETF investments. Traditional financial institutions are making significant progress in areas such as asset issuance, tokenization, stablecoins, and research.
Institutions such as Sky (formerly MakerDAO) and BlackRock have launched on-chain money market funds. Ondo Finance's USDY (tokenized treasury fund) has reached an asset size of approximately $440 million.
Fintech Integration
In May, PayPal launched its stablecoin PYUSD on Solana, and Agora, supported by Nick Van Eck, also launched its stablecoin AUSD across multiple chains, which is backed by Van Eck (asset management company) and custodied by State Street.
2025 Predictions
The depth and breadth of institutional participation are expected to further expand. As BlackRock continues to position digital assets as a non-correlated asset class worthy of a small allocation, stable inflows into ETFs may persist. More importantly, institutions are looking for innovative opportunities across various verticals to reduce costs, increase transparency, or accelerate payment efficiency.
Notably, traditional finance giants like JPMorgan and Goldman Sachs are accelerating their layouts. They are not only expanding their own blockchain platforms but also exploring a broader range of product offerings.
This trend suggests that institutions no longer view crypto merely as an investment asset; instead, they are starting to take its potential as financial infrastructure seriously.
Meme: The Heat Will Continue
2024 Market Landscape
Meme coins account for only 3% of the market cap of the top 300 cryptocurrencies (excluding stablecoins), but their trading volume continues to represent 6-7% of the market, recently even climbing to 11%.
The first quarter saw a rise driven by politically themed meme coins such as Jeo Boden, followed by TikTok meme coins (like Moodeng and Chill Guy) and AI agent concepts (like Truth Terminal's GOAT) continuing to push this momentum.
Market drivers
The prosperity of meme coins stems not only from trends or user-friendly interfaces but also from two key conditions:
Excess capital: As the overall crypto market appreciates, many traders have accumulated large amounts of funds but lack quality investment opportunities.
Ample block space: High-throughput networks like Solana and Base provide a low-cost, efficient trading environment.
This environment is particularly evident on Solana. The strong market performance at the end of 2023 and the beginning of 2024 has allowed Solana users to accumulate substantial capital.
Evolution of trading infrastructure
User-friendly trading platforms have significantly driven the popularity of meme coins. Applications like Pump.fun, Moonshot, and Telegram bots have simplified the operational process for retail traders.
Especially Moonshot, which bypasses traditional cryptocurrency deposit channels by supporting payments via ApplePay, PayPal, or USDC on Solana, attracting a large number of new retail investors with its intuitive interface and simple registration process.
2025 Predictions
Predictions for 2025 indicate that meme coins are expected to continue growing, primarily driven by several key factors:
Infrastructure support: High-throughput chains like Solana, Base, Injective, Sei, and TON provide ample block space, allowing meme coin trading without incurring high costs.
User experience optimization: Applications like Moonshot and Pump.fun continue to lower the barriers to entry, simplifying trading processes and attracting more retail participants.
Macro environment fit: Meme coins, as speculative outlets, resemble gambling and may continue to attract users seeking entertainment and profit in the current macro environment.
Financing landscape: AI leading new investment themes
Market Overview
Crypto project financing is showing an upward trend compared to 2023. Although the total financing for startup projects and protocols has decreased by about 20% year-on-year (mainly affected by anomalies in Q1 2023), the market has still seen multiple large financing rounds.
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 an $80 million Series B round led by a16z, aiming to convert intellectual property into programmable assets.
Sentient raised $85 million, led by Thiel's Founders Fund, focusing on an open AGI development platform.
Farcaster and Freechat raised $150 million and $80 million, respectively, indicating ongoing capital interest in the social sector.
The Rise of AI and DePIN
The total financing for AI projects has increased by approximately 100% year-on-year, with financing rounds growing by 138%.
The total financing for DePIN projects has grown by about 300% year-on-year, with rounds increasing by 197%.
AI rounds are particularly popular in accelerator projects 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, several noteworthy financing trends emerged in 2024:
The field of decentralized science is starting to receive attention, with projects like BIO Protocol and AMINOChain securing financing.
VCs in the Asia-Pacific region are more inclined to invest in gaming protocols, especially those launched on the TON blockchain.
The share of financing for NFT and metaverse projects has significantly declined compared to 2021 and 2022.
The social sector continues to experiment, with projects like Farcaster, DeSo, and BlueSky receiving funding support, although past successes have been limited.
Crypto users, growing new evidence
Market size breakthrough
According to a16z's report, the number of active addresses in cryptocurrencies reached a historical high of 220 million, with a growth trend similar to early internet adoption. Although this number may include duplicates (as many users use multiple wallets), it is estimated that there are still 30-60 million real monthly active users after filtering.
Key cases for user growth in 2024
The breakthrough of the Phantom wallet, becoming the most popular wallet in the Solana ecosystem, once ranking in the top ten on the iOS App Store, surpassing WhatsApp and Instagram.
The application of stablecoins in emerging markets: Sub-Saharan Africa, Latin America, and Eastern Europe are starting to bypass traditional banking systems and directly adopt stablecoins; platforms like Yellow Card, Bitso, and Kuna are driving adoption through services like stablecoin exchanges and payment APIs.
The explosion of Telegram Mini-Apps: Notcoin has over 2.5 million holders, Hamster Kombat has attracted 200 million users, with 35 million YouTube subscribers.
Polymarket's practical application: Rapid growth during the election period, adding nearly 1 million accounts, ranking second in downloads among news apps on iOS.
Base and Hyperliquid driving CEX users on-chain: Base L2 provides a free transfer channel from Coinbase to Base, while Hyperliquid offers a CEX-like high-performance trading experience for perpetual contract traders.
2025 Predictions
The crypto ecosystem is no longer just preparing for mass adoption; it has already begun to achieve it.
User growth is shifting from sporadic, noisy entry patterns to a model of natural discovery and sustained growth through various applications. Meme coins, consumer applications (like Phantom and Telegram), prediction market platforms, and the growing on-chain utility will continue to bring compound growth.
The next key step is to make blockchain navigation more retail-friendly, which will be greatly improved through new innovations like chain abstraction and aggregated front ends.
Bitcoin: This year has been great, and next year will be even more mature.
Key Developments in 2024
Price and institutional adoption
Starting from $40,000, after ETF approval, it reached a new high of $75,000 in Q1, breaking through the important $100,000 mark after Trump's election victory.
Bitcoin's market cap dominance has risen to about 55%.
ETF issuers hold over 1.1 million Bitcoins, with BlackRock and Grayscale accounting for 45% and 19%, respectively.
After the approval of ETFs, there was only one month of net outflow in April, with BlackRock's IBIT continuing to be the largest net buyer, with about $8 billion inflow in November alone.
MicroStrategy continues to purchase large amounts, with the latest acquisition between December 2 and 8 amounting to $2.1 billion in Bitcoin, holding about 420,000 Bitcoins, second only to Binance, Satoshi Nakamoto, and ETF issuers.
Michael Saylor and MicroStrategy (MSTR) continue to dollar-cost average, and their BTC-centric strategy has encouraged other listed companies like Marathon Digital Holdings (MARA), Riot Platforms, and Semler Scientific to begin accumulating BTC reserves.
2024 is also a Bitcoin halving year, and the number of natural sellers of Bitcoin will decrease over time.
Network Innovation
The Rise of Ordinals and Runes
Ordinals bring NFT functionality to Bitcoin, with Runes introduced as a new type of token standard, similar to Ethereum's ERC-20.
Some Runes projects have valuations reaching nine figures, indicating market recognition of the expansion of the Bitcoin ecosystem.
Breakthroughs in Bitcoin's programmability and staking innovation
The emergence of BitVM brings the possibility of arbitrary computation to Bitcoin, with over 40 Layer-2 projects launching on testnets or mainnets.
CORE, Bitlayer, Rootstock, and Merlin Chain lead in TVL.
Babylon, as Bitcoin's first staking protocol, launched in Q3, with the first round of 1,000 BTC staking reaching its limit within 6 blocks.
Liquid staking tokens like LBTC from Lombard are starting to appear.
2025 Predictions
The inflow into Bitcoin ETFs has significantly exceeded expectations, and over time, institutions are likely to gradually become the main drivers of daily BTC price trends.
ETFs can purchase spot Bitcoin without leverage. Spot capital inflows from institutions are smoother and more consistent, which should reduce reflexive, leverage-driven volatility, helping Bitcoin mature as an asset.
The approval of Bitcoin ETFs may place BTC in the early to mid-stage of becoming the world's leading store of value. In November, Bitcoin surpassed silver to become the eighth most valuable asset globally, partly due to ETF inflows throughout the year. Year-end trends indicate that ETF inflows will continue to increase in 2025, especially as Grayscale's GBTC shifts to positive net flows.
In terms of regulation, Trump's new administration has shown a positive attitude toward cryptocurrencies and Bitcoin, making campaign promises related to Bitcoin. Although Bitcoin quickly re-priced after Trump's victory, the government ultimately needs to fulfill some of its claims.
While we predict the likelihood of this happening is low, the federal strategic Bitcoin reserve would be particularly influential. The market appears to treat the Trump administration with cautious optimism, and if the president can achieve some of the more likely action items, it could establish enough goodwill to sustain positive sentiment for Bitcoin moving forward.
After the 2024 election, the impact of clear and positive cryptocurrency reforms will become a major issue across all government departments, and we believe that cryptocurrency is about to gain bipartisan support. Its impact is significant and contributes to the foreseeable future of removing regulatory uncertainties surrounding Bitcoin.
On Runes and Ordinals, we believe the dust has largely settled, and opportunities will be very enticing by 2025.
Magic Eden is the driving force behind improving Bitcoin UI/UX. If the Bitcoin ecosystem takes off, we expect them to become clear winners.
The programmability of Bitcoin and BTC staking are still in their infancy. The early growth in TVL is not enough to indicate actual demand. Consumers largely favor the performance capabilities of networks like Solana and Base. If this trend continues, Bitcoin builders will face a tough battle.
Ethereum: Identity Crisis and Future Opportunities
2024 Performance Overview
Ethereum has had an extraordinary year. As the 'second brother' of the crypto market, it competes with Bitcoin, the 'big brother,' for the hard currency narrative while also facing challenges from new public chains like Solana.
Significantly underperforming relative to other major crypto assets, especially in comparison to Bitcoin and Solana.
Layer-2 ecosystems continue to grow, but mainnet activity has notably declined; ETH has seen persistent inflation for the first time, rather than the expected deflation.
Initial funding inflows after ETF approval were limited, only beginning to accelerate recently.
L2 scaling capabilities have increased 15-fold, achieving a cumulative throughput of approximately 200 TPS.
The rapid growth of Base has sparked discussions like 'the future of Ethereum is Coinbase,' but the decentralization of the L2 ecosystem has led to a decline in user and developer experience.
Key Outlook for 2025
L2 is better than L1
Layer-2 designs allow for more flexible execution environments, outperforming native Layer-1; high-throughput L2s (like MegaETH) theoretically have far greater capacity than fast L1s.
Application chains can achieve better trade-offs, such as customized transaction priority.
Two viable models for increasing value capture
Ethereum faces two paths for value capture:
The fee-irrelevant route
Current fees primarily come from speculative activities, with sustainability in doubt.
Token valuations should be based on 'security demand' rather than fees; maximum applications create the highest security demand, promoting the value of native assets.
Improved fee capture route
Native rollups can improve mainnet value capture and increase data availability fees.
Expanding the base layer to compete with ordinary EVM Layer-2.
Overall new opportunities in the ecosystem
A super rollup, interconnected based-rollup networks, or high-fee burning could all become successful paths.
Regaining market share in the crypto-native speculative market will drive institutional interest.
The decentralized nature of the ecosystem allows any participant to contribute to this transformation.
Solana: From the underdog to mainstream ecosystem
Key Performance in 2024
Solana has transformed from 'recovery after the FTX crash' to a certain breakthrough. Major achievements include:
The competition has shifted from the 'duopoly of Bitcoin and Ethereum' to a 'tripartite' structure.
Network stability has significantly improved, with only one 5-hour interruption occurring throughout the year. Total locked value (TVL) in DeFi has grown from $1.5 billion to over $9 billion. The issuance of stablecoins has increased from $1.8 billion to nearly $5 billion.
Positioning itself as an investment venue, especially through Memecoin trading. The seamless user experience of ecosystem wallets and platforms like Pump.fun and Moonshot have made the issuance and trading of tokens easier than ever.
This series of on-chain activities has even pushed Solana's on-chain fees to occasionally exceed Ethereum, highlighting the network's acceleration momentum and retail appeal.
Key Outlook for 2025
Ecosystem Expansion
Expect applications that go beyond speculation: We are particularly excited about the prediction markets of MetaDAO, and the emerging Solana L2 ecosystem deserves attention to see if it can effectively compete with its peers on Ethereum.
AI trend pioneering: ai16z has become one of the trendiest repositories across all domains on Github. The Solana ecosystem not only embraces AI x Crypto but leads this trend.
Traditional financial interest
Under the ETF trend, investors may seek to invest in 'tech stocks' in this field, with Solana becoming the fastest horse.
The launch of a spot Solana ETF seems inevitable within the next year or two, creating a perfect storm for the explosive second phase of the Solana story.
Intensified competition
A brand new batch of Layer 1 blockchains (like Monad, Berachain, and Sonic) is expected to emerge next year.
A revival of DeFi, AI agents, and consumer applications led by platforms like Base and numerous new L2s.
Other L1 + Infrastructure 2025 Outlook
Note: Due to space limitations, starting from this chapter, we focus on interpreting its sections on the 2025 predictions, while the summary section for 2024 can be found in the original report, along with more publicly available objective information.
Next year, we will see Monad and Sonic launch as two universal, high-throughput 'integrated' L1s.
Both projects have accumulated substantial funding (Monad at $225 million, Sonic with approximately $250 million in FTM tokens) to attract developers and development teams.
Berachain is one of the most interesting experiments in L1, raising $142 million in Series A and B rounds, with over 270 projects dedicated to supporting the network, showing immense interest from developers and application teams.
Celestia's Lazybridging proposal and Avail's Nexus ZK proof verification layer have the potential to establish meaningful network effects for modular L1 in the second half of 2025.
If successful, Unichain could trigger a wave of protocols - avoiding L1 and building application-specific or domain-specific L2s to increase value accumulation and generate more income for token holders.
Alternative virtual machines (mainly Solana and Move VM) will continue to attract attention.
Avalanche9000, leveraging Avalanche's BD strength in the institutional and gaming sectors, will be another strong year.
In 2025, the outlook for Cosmos remains uncertain.
Initia will launch as L1, supporting 5 to 10 application-specific, interoperable L2 solutions. This strategic setup positions Initia to lead the next wave of application chain advancements.
In the interoperability track, focus on Across, Espresso, Omni Network.
In the ZK track, focus on Polygon's Agglayer. It is expected that almost all infrastructure protocols will adopt ZK technology in 2025.
The boundaries between applications and infrastructure are becoming increasingly blurred, with modular projects like Celestia, EigenDA, and Avail potentially benefiting from this.
DeFi 2025 Outlook
Base and Solana - Valuable Real Estate: We continue to see Solana and Base DEX's share of trading activity relative to other chains growing.
Vertical integration and composability: Protocols like Hyperliquid and Uniswap have turned towards owning their infrastructure to configure network features for their applications.
Prediction markets: We predict that trading volumes may decline compared to previous election-driven trading months. To win, other protocols must be able to provide relevant markets where bettors can continue to speculate while incentivizing market makers.
RWA: As interest rates decline, tokenized treasuries are expected to face resistance; idle on-chain funds may receive more favor, shifting the focus from purely importing traditional financial assets to exporting on-chain opportunities. Even with changes in macroeconomic conditions, RWA has the potential to maintain growth and diversify on-chain assets.
Point systems: We expect point systems to remain central to protocols aimed at guiding user adoption through token distribution, powering market and yield trading protocols. Entering 2025, protocols may refine their point systems while nurturing early adopter communities.
Driven by new opportunities in yield farming and the speculative appeal of point-based incentives, yield trading protocols like Pendle are expected to grow further.
AI X Crypto 2025 Outlook
Bittensor and Dynamic TAO: A new type of AI coin casino.
Each existing subnet (as well as future subnets) will have its own token, and they will essentially be associated with Bittensor's native TAO token.
The AI race is a talent race, and Bittensor has a unique angle to attract talent - the subnets show early signs of producing high-quality research.
If Bittensor unexpectedly becomes the center of cutting-edge AI research in the cryptocurrency space next year, do not be surprised.
Bittensor is not just a speculative 'AI coin casino,' but a platform capable of attracting serious AI developers.
Decentralized model training: a stumbling block and a pivot.
Decentralized networks will not try to compete with giants like OpenAI and Google by training large foundational models but may focus on fine-tuning smaller, specialized models.
More experiments are expected next year in the small and specialized model space. These models may be designed to perform specific tasks.
AI agents and meme coins: Ongoing experiments
Most AI agents may prefer to operate on-chain.
The continuously growing token valuations can provide funding for the sustained development of AI agents and promote social media engagement.
We believe that as more engineers take notice, talent density will continue to increase.
As AI agents actively compete for attention on social media, this category will surpass 'static' meme coins.
As discussions surrounding AI remain open and closed, we expect cryptocurrencies to occupy an increasingly larger portion of the dialogue.
DePIN 2025 Outlook
By 2025, we expect energy DePIN to build supply-side infrastructure worth $500 million to $1.5 billion, generating up to $50 million in demand-side sales.
As Helium Mobile prepares for further growth and DAWN is set to launch its mainnet in 2025, the wireless field will solidify its position as a breakthrough use case in DePIN.
Revenue predictions: The industry is expected to achieve revenues in the eight-figure to low nine-figure range by 2025.
RTK networks like GEODNET are expected to expand supply by the end of 2025, providing 90%-100% coverage for high-value areas in the EU and North America. Additionally, annual revenue may grow to over $10 million.
The weather collection network vertical is expected to make significant progress in 2025.
The integration and partnerships between energy and mobility DePIN are expected to enhance grid integration and energy collection data from electric vehicle batteries.
In 2025, document storage DePIN is expected to generate revenue between $1.5 million and $5 million across the entire sub-industry.
With the success of projects like Grass, data collection DePIN is expected to increase in 2025.
Consumer-grade applications 2025 Outlook
Playing airdrops will continue to be a primary way to attract players into games. The 'paid airdrop' strategy may become the new standard in 2025.
Mobile applications will become a defining trend in 2025.
In 2025, we expect Solana to continue to capture the largest share of Memecoin trading activity.
Ordinals are expected to become a category that continues to attract attention. Upcoming catalysts, such as potential CEX listings, airdrop-driven wealth effects, and the increasing popularity in Asian markets, will sustain growth and wider appeal throughout the year.
CeFi 2025 Outlook
With the continuation of the bull market and rising financing rates, the supply of Ethena may continue to expand.
Yield-generating stablecoins may not quickly seize large market shares from Tether.
Howard Lutnick, the commerce secretary chosen by Trump, manages Tether's assets, which may lead the U.S. to entirely change its hostile stance toward Tether.
True innovation is likely to happen behind the scenes of orchestration companies like Bridge. Stablecoin APIs (such as those offered by Yellow Card) will enhance the ability of small businesses to accept stablecoins as payment globally.
In terms of exchanges, we will continue to see the integration of on-chain and off-chain services. Coinbase and Kraken hope to onboard as many users as possible to their L2s in 2025 and may provide incentives for this.
The new administration will allow exchanges to be more lenient in listing assets of their choice. As Binance, Bybit, and Coinbase compete to list the most popular crypto assets, this trend may reach a fever pitch in 2025.
