Original text: (My 2025 Crypto Predictions)
Author: Dragonfly Managing Partner Haseeb Qureshi
Translated by: Zombit
I may either be a prophet or a fool with these predictions, but one thing is certain: I will anger many 'holders'. This time, I will divide my predictions into six parts: L1/L2, token issuance, stablecoins, regulation, 'AI agents' (oh dear), and Crypto x AI.
1. L1s/L2s
The distinction between L1 and L2 is gradually fading. Users no longer perceive the difference between L1 and L2 (did they ever know the difference?). The entire blockchain ecosystem, including L1 and L2, has become overcrowded in the market and will face a massive reshuffling. This consolidation will not revolve around technical advantages but rather how to find a unique positioning in the market and establish lasting user stickiness through market strategies (GTM).
Despite the strong technical capabilities of SVM and Move, EVM's market share will further increase by 2025. This growth will be driven by @base, @monad_xyz, and @berachain. This growth is no longer due to compatibility but because EVM/Solidity has a wealth of training data, and by 2025, most application code will be written by large language models (LLMs). Furthermore, a substantial amount of battle-tested cryptographic contract libraries will be a significant advantage, as LLMs perform poorly when writing underlying code. Developer experience and programming 'pits' will no longer matter as much; instead, training data and mature libraries will be key.
Solana will force more blockchains to optimize low-latency experiences. We will shift from a transactions per second (TPS) war to a latency war. For example, @doublezero and ultra-low latency L2s like @megaeth_labs will drive user expectations for Web2-level response speeds. More optimistic UIs, pre-confirmations, intents, email registrations, browser wallets, and progressive security are expected. Special mention to @privy for their innovative performance in this regard.
Hyperliquid has already proven that dedicated chains can operate successfully as long as they focus on a specific application and prioritize user experience and cross-chain bridging. In the future, more projects will follow this model. The old dream of 'one chain to rule them all' has been completely shattered.
2. Token Issuance
The current model of large-scale airdrops for each project through a points system has ended. We will enter a world of dual-track models.
Track One: If a project has a clear 'North Star metric' (e.g. exchanges or lending protocols), they will distribute tokens solely based on points. They will not care whether this system is being exploited or abused because, in essence, it is a cashback mechanism aimed at the core KPI. The 'farm players' are actually your real users.
Track Two: If a project does not have a clear 'North Star metric' (e.g. L1s and L2s), they will be more inclined towards crowdsales. They may conduct small-scale airdrops to reward social contributions, but most tokens will be issued through crowdfunding. The model of airdropping for vanity metrics is dead, as these tokens ultimately do not reach users but are captured by industrialized farms.
Meme coins will continue to lose market share, replaced by 'AI agent' tokens. I believe this represents a shift from financial nihilism to financial over-optimism. (Yes, I'm coining this term.)
3. Stablecoins
The use of stablecoins will experience explosive growth, especially among small and medium-sized enterprises (SMBs). This usage is not just for trading or speculation; real businesses will start using on-chain dollars for instant settlements.
Banks are paying attention to this. An announcement of banks issuing stablecoins is expected by the end of 2025. They do not want to be left behind by the times. However, under Lutnick's role as U.S. Secretary of Commerce, Tether will continue to maintain its market dominance.
Ethena will attract more capital, especially as U.S. Treasury yields continue to decline over the next year. As the opportunity cost of capital decreases, the returns from arbitrage trading will become more attractive.
4. Regulation
The United States will legislate on stablecoins, while the broader market infrastructure reform bill (FIT21) will be postponed. Adoption of stablecoins will accelerate, while integration with traditional finance (TradFi), such as asset tokenization and further adoption on Wall Street, will lag behind.
Under the Trump administration, the Fortune 100 companies will be more willing to offer cryptocurrency to consumers. Tech companies and startups will show a greater risk appetite. During Trump's presidency, a temporary regulatory tolerance period will emerge until clear legal rules and enforcement priorities are set. During this period, a significant number of cryptocurrencies are expected to be integrated into Web2 platforms.
5. AI Agents
(This is the longest section because my views may be controversial—please read to the end!)
The 'AI agent' craze may last throughout 2025, but will eventually fade. This is not a long-term disruptive trend to watch closely, but it will become a focal point of obsession in the crypto space as it is the most socially-oriented technological trend.
The current so-called 'AI agents' are not really agents at all. They are merely chatbots with accompanying meme coins; apart from posting on X, they have almost no autonomy. Moreover, current 'AI agents' are mostly 'Wizard of Oz' style agents—there are real people monitoring them to ensure AI does not go out of control. This situation will not change in the short term, as current AI agents are highly unstable (even the Fortune 100 companies are not currently using agent technology in production environments). Current agents can easily be manipulated to make crazy statements, damaging brand image, or get jailbroken to steal all resources. To understand what true autonomous AI is, look at @freysa_ai—if your 'AI agent' hasn't been jailbroken, it’s probably just a 'Wizard of Oz' style agent.
However, this trend will accelerate. Chatbots can indeed replace many influencers because they never rest, always maintain consistent messaging, and are less greedy than human influencers. Moreover, most influencers are not particularly creative. The aggregation and amplification of real-time information can be done today through algorithms (see aixbt).
The reason we are so fascinated by these chatbots right now is that they are so novel. It's like seeing an elephant painting. The first time you see it, you don't care whether it's good or not—you just think the sight is so wonderful. But after you see it a thousand times, that novelty will gradually wear off. I believe this phenomenon will occur once AI agents mature.
You can now see that aixbt has become quite adept at aggregating data from different projects. By next year, the next generation of agents may hallucinate less, analyze data more deeply, and offer smarter insights. But will you really notice these changes? For most people, the feeling of this upgrade may be negligible.
I believe this sense of novelty and market enthusiasm will last throughout 2025. The cryptocurrency market always takes longer to grow tired of new things. But by 2026, I think there will be a sudden emotional reversal. As AI agents become ubiquitous, people will begin to tire of them. Users will start to consciously prefer human influencers, even if the content from human influencers is not as stable.
To address this preference, AI agents will begin to hide their identities, trying to pose as humans to attract more attention. Future AI agents will no longer make money by issuing meme coins but will profit through ad sponsorships, affiliate marketing, and promoting tokens they hold. At that time, there will often be scandals revealing influencers as AI agents. Everything will become very strange.
But darker things are still ahead. Keep in mind that current large language models (LLMs) excel in textual content but perform poorly in other areas. So, in the crypto space, what is the easiest way for a 'liberal arts AI' to make money? The first is to become an influencer, and the second is to become a scammer. You will start to see a surge of autonomous scam bots, which will bring a serious social issue, similar to the outbreak of ransomware and crypto hijacking attacks after 2017.
But even though chatbots may become the central topic of the crypto market in 2025, the long-term disruptive impact of AI will not lie in the social realm. It will not be in the trading realm either. AI will not provide everyone with 'personal trading agents' or 'mini hedge funds'. Yes, AI will extend everyone's capabilities, but their extension will be proportional, depending on your capital, data, and infrastructure. Therefore, we should expect AI to supercharge those large trading firms that already have capital and data scale. In other words, trading firms will become more powerful and capture all the profits.
Over time, AI will make the market extremely efficient, even in some niche markets. This will leave little advantage for ordinary traders. The value of original research will plummet. However, this increased competition and liquidity should benefit noise traders.
So, if neither chatbots nor trading bots are the protagonists of the story, what will it be? Here is my core argument: the truly disruptive AI agents will be 'software engineering agents.'
Why is this important? Think about it: what is the main input in the cryptocurrency industry? What is the biggest bottleneck hindering the emergence of more applications, more wallets, and better infrastructure? The answer is: software development.
If AI agents significantly reduce the cost of software, the entire industry will be fundamentally changed. In the AI era, you will no longer need millions of dollars in seed funding; you might only need to spend $10,000 on AI cloud computing costs to launch an application. Self-financing projects like Hyperliquid and Jupiter will no longer be anomalies but will become the norm.
On-chain applications and experiments will experience explosive growth. The impact on security will be profound. AI will make static analysis and monitoring ubiquitous, making security more accessible.
6. Cryptocurrency x AI
Above, I discussed in detail the impact of AI on cryptocurrency (which is the primary direction of influence), but cryptocurrency will also influence AI.
Truly autonomous AI agents will use cryptocurrency for payments. Once more relaxed stablecoin regulatory policies are in place, even AI agents run by large enterprises will use stablecoins for payments between agents, as stablecoins are easier to initiate and use compared to bank accounts.
Decentralized AI training and inference experiments will proliferate and scale up significantly. A new generation of promising projects like @exolabs, @NousResearch, and @PrimeIntellect will pave the way for establishing decentralized AI models. These projects aim to challenge the centralized company-dominated AI model landscape and provide a more open, neutral, and verifiable AI technology stack. Notably, @NEARProtocol is working hard to build a complete neutral, permissionless AI stack.
Another important area where AI intersects with cryptocurrency is user experience (UX). Around 2026, we will see a completely AI-driven wallet emerge that can handle the following tasks:
Auto bridge assets
Optimize trading paths
Minimize transaction fees
Eliminate interoperability issues
Warn users of potential fraud or asset risks
Handle frontend errors
In the era of AI-driven wallets, users will no longer need to frequently switch between different wallets, adjust RPC nodes, balance stablecoin assets, or worry about cross-chain transfers. AI will automatically handle these trivial and technical tasks for users.
This change will raise a critical question: what will happen to the blockchain network effects when users no longer care about which chain an application runs on? When AI hides all underlying details from users, the distinctions between chains will become irrelevant, or even invisible. This will have far-reaching implications for the monopolistic advantages of blockchain networks.
This field is still very young, but I am hopeful about its future. In the long run (around mid-2026), I expect this to be the highest market cap segment in the 'AI x cryptocurrency' space.
Conclusion
That's all my predictions. I promised to finish this article before reaching 100,000 followers, and although it's a bit late, at least I completed it before the New Year!
Happy New Year! Looking forward to this time next year, when I will have been replaced by AI and officially unemployed!
Disclaimer: The above content represents my personal views and does not reflect the position of Dragonfly. Dragonfly holds investments in many of the projects mentioned. This is not financial advice. Please do your own research (DYOR). I may or may not be an AI.
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