AI and DeFi will become the two core narratives of next year, with Web3 wallets gaining more attention and driving mainstream adoption through more convenient user guidance and higher quality experiences. This article originates from a long research piece by hitesh.eth on the X platform, organized, translated, and written by 深潮 Techflow. (Background: Grayscale reports the top 20 cryptocurrencies for Q1 2025, focusing on DeFi, AI Agents, and the Solana ecosystem) (Background Supplement: ai16z plans to update token economics: provide staking, launch a Launchpad in Q1 next year, or launch an L1 blockchain...) Purely practical insights, no false hopes. Before you start reading, I hope you can set aside your existing prejudices and take a few minutes to carefully look at what I am about to share. From a macro perspective, the investment themes of Web3 can be divided into two categories: underlying infrastructure (infra) and application scenarios (apps). Investments can essentially be split into two types: one that may seem unremarkable in the short term but could yield substantial returns in the long run; the other that is exciting in the short term but may ultimately be worthless. Most cryptocurrency investors enter this market in pursuit of quick and substantial profits, and they are willing to take on the corresponding risks. Therefore, people tend to opt for 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 United States and some other major economies plan to introduce relevant regulations domestically. 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 projects with solid fundamentals and stable cash flow can stand out. We can foresee a wave of new traditional investors entering the market. These investors hold 'old money' and will be venturing into the cryptocurrency space for the first time. They won't blindly invest just because of market hype; instead, they will carefully study projects, read reports and materials, and only make investment decisions when it makes logical sense. Against this backdrop, decentralized finance (DeFi) will become a favored investment theme for traditional investors, alongside the first layer blockchain protocols (L1). However, due to the lower market cap ceiling of DeFi projects, they have more room for growth and are highly aligned 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 vast capital, and ample funding is key to the healthy growth of the market. Don't forget that many institutional investors are also led by traditional investors. It is foreseeable that DeFi will ultimately become one of the important 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 akin to a long-term investment, similar to how investors viewed BTC and ETH in the past. The long-term potential of AAVE may be seen as comparable to that of ETH. When investing in blue-chip DeFi projects, you can focus on long-term development; and when choosing to invest in an entirely new DeFi native project, you might consider short-term gains, as these projects could also deliver multiples or even higher returns. In a crypto market dominated by DeFi, many emerging projects will appear one after another, while some established projects will regain attention. You will see waves of price increases around 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 token's value potential, and next year, some projects may announce adjustments to their fee mechanisms, for which you need to be prepared. These changes will inject strong momentum into the narrative of DeFi's development. I anticipate that DeFi will dominate at least two quarters next year, just as AI has performed this year. As for AI, I believe that 2025 will be a year of widespread criticism of AI in popular culture due to its rapid and uncontrolled expansion. Discussions around 'Responsible AI' will become a focal point. Market activities surrounding 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-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 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, so major projects involving confidential DeFi, privacy computing, privacy storage, and privacy inference will receive more attention, and this attention 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 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 part of your investment position to them. 2025 will also be a year for mobile Web3 wallets and super applications to shine. Recently, a Web3 wallet company called Exodus went public on NASDAQ with a valuation of $1.2 billion, which may drive speculation in tokens related to Web3 wallets with strong revenue performance next year. AI and DeFi will become 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 Networks) will emerge in a certain quarter; Web3 wallets will gain more attention and drive mainstream adoption through more convenient user guidance and higher quality experiences. That's all for 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.

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