Article source: Shenchao TechFlow
Author: hitesh.eth
Translated by: Shenchao TechFlow
Pure substance, no false hopes.
Before you start reading, I hope you can temporarily set aside any existing prejudices 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 main categories: underlying infrastructure (infra) and application scenarios (apps).
Investments can essentially be divided into two types: one that appears unremarkable in the short term but may yield significant 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.
Therefore, people tend to choose cyclical investments—these investments are usually short-term and only effective during specific bull market cycles.
2025 will become the 'year of regulation' in the cryptocurrency field.
The US and several 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 cryptocurrencies with genuine potential—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 cryptocurrencies for the first time.
They will not blindly invest just because of market hype; instead, they will seriously study projects, carefully read reports and data, and only make investment decisions when it makes logical sense.
In this context, decentralized finance (DeFi) will become a favored investment theme among traditional investors, alongside the first-layer protocols (L1) of blockchain.
However, due to the lower market capitalization limits of DeFi projects, their growth potential is larger, and they align 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 hold substantial funds, and sufficient capital is key to the healthy growth of the market. Don't forget that many institutional investors are also dominated by traditional investors.
It is foreseeable that DeFi will eventually become one of the important layout 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, akin to how past investors viewed BTC and ETH.
The long-term potential of AAVE may be seen as comparable to ETH.
When investing 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 bring several times or even higher returns.
In a crypto market dominated by DeFi, many emerging projects will gradually appear, while some established projects will also regain attention. You will see waves of price increases surrounding these projects.
In the DeFi space, many blue-chip applications (such as Uniswap) are planning to transform into underlying infrastructure projects. This transformation will further enhance the value potential of tokens, and next year some projects may announce adjustments to their fee mechanisms, so you need to be prepared for this.
These changes will inject strong momentum into the narrative of DeFi development.
I expect DeFi to dominate at least two quarters of next year, much like AI has performed 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.
The discussion around 'responsible AI' 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 entities to experience a wave of bubble-like 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 see it burst the following year.
The specific quarter in which this occurs will depend on the timing of AI regulatory-related events.
Regulation will also spark interest in privacy infrastructure, leading to increased attention on major projects involving confidential DeFi, privacy computing, privacy storage, and privacy inference, 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 when mobile Web3 wallets and super applications emerge.
Recently, a Web3 wallet company named Exodus went public on NASDAQ with a valuation of $1.2 billion, which may spark a speculative frenzy for Web3 wallet-related tokens with strong revenue performance next year.
AI and DeFi will become the two core narratives 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 gain more attention and drive mainstream adoption through easier user guidance and higher quality experiences.
That concludes my entire sharing.
Please note that I am neither an astrologer nor an expert in the cryptocurrency field. I am just an ordinary person with somewhat random thoughts about the market, so don't take my views too seriously.
