Author: @Web3_Mario
Summary: Thank you all for your support over the past year. I apologize that my year-end summary is a bit late; handling matters took time. Of course, I also thought for a long time about which perspectives to organize my reflections from this past year for you. In the end, I felt that sharing from the perspective of an ordinary Web3 entrepreneur still striving on the front lines would be more genuine. Overall, looking towards 2024 and 2025, I believe it is quite appropriate to summarize it in four sentences: from chaos to universality, from chaos to order, from depression to bubble, from conservatism to transformation. Next, I will share my thoughts and outlook using some representative events.
From chaos to universality: The approval of the BTC spot ETF marks the beginning of the universal path for crypto assets.
Looking back at 2024, the author believes that the most unusual transformation the crypto world has experienced is its upgrade from the product of a niche subculture to an asset class with universal value. This process can be traced back to two landmark events. The first is the BTC spot ETF approval event on January 10, 2024, after three months of deliberation, which was officially approved with the SEC’s green light. The second is the successful election of crypto-friendly Trump as the 47th President of the United States on November 6, 2024, during this election cycle. The impacts of these two events can be seen in the more pronounced price trends of BTC this year. The former raised BTC's price from the $30,000 range to $60,000, while the latter was crucial in lifting BTC from $60,000 to $100,000.
The most direct impact of this transformation is on liquidity. More abundant liquidity naturally benefits the price movements of risk assets, but the process and motives for liquidity attraction differ from the bull market in 2021. Looking back at the 2021 crypto asset bull market, its core driving force was the higher capital efficiency brought about by the de-regulatory nature of crypto assets, which allowed the crypto sector to capture excess liquidity from the $1.9 trillion economic relief plan promoted by the Biden administration in response to the COVID-19 pandemic more effectively, thus achieving extremely high speculative returns.
However, in the bull market that opened in 2024, it can be seen that the entire transmission process has undergone a transformation. The influence of "influential capital" attracted during the bull market in 2021, along with new vested interests, has formed a new interest group that is actively releasing greater political influence, not limited to numerous crypto policy lobbying groups and massive political donations. Regarding this point, there has been a more in-depth analysis in the author's previous article (In-depth analysis of the value of World Liberty Financial: A new choice under Trump's campaign funding disadvantage).
The most direct impact brought about by this is that it has made the efficient promotion of the universal value of cryptocurrencies possible through political means. Therefore, in this cycle, you will see iterative discussions on the value of crypto assets emerging, and more traditional elite classes and mainstream media have labeled themselves as "crypto-friendly." This transition from "chaos" to "universality" has also profoundly influenced the motives for attracting liquidity, regardless of whether the viewpoints are sufficiently supported by evidence (as previously discussed in the article, (In-depth analysis of the underlying reasons for the current fluctuations in the cryptocurrency market: Value growth anxiety after BTC hits a new high)). In this round, besides speculation, the purchasing motivation for BTC indeed mixed in more terms like "store of value" and "anti-inflation," which will reduce the cyclicality and volatility brought by speculative properties in crypto assets, making value support more robust. Of course, the only crypto assets currently able to achieve such positive change appear to be a few blue-chip assets, including BTC. However, due to the transmission effects brought about by the multiplier effect, the entire crypto asset market will benefit to some extent. Using a diagram to illustrate this transition may be more intuitive.
In addition to the impact on the top-tier class, this evolution has also brought about a significant positive mindset shift for many practitioners, including the author. A straightforward example is that when friends and family from outside the industry inquire about your field, you no longer have to nervously explain that you are not a criminal or a nouveau riche as in the past, but instead, you can confidently introduce your expertise or career. This shift in mindset will also make the inflow of talent more proactive, significantly reducing friction costs in processes such as seeking partners for startups, recruiting talent, and pursuing cooperation with traditional industries. Therefore, regarding this point, the author is full of confidence about the future development of the industry.
Finally, it is also necessary to mention some outlooks on this narrative path. In mid-2025, discussions about the value of crypto assets represented by BTC will become more positive. In previous articles, there has been analysis specifically referring to BTC's value as a store of value and its potential to become the core of growth in the U.S. stock market. Therefore, it is essential to remain sensitive to relevant information, which may include the following aspects:
Progress of bitcoin reserve-related bills at the national, regional, organizational, and corporate levels;
Relevant statements or expressions of views by politically influential key figures;
The allocation of BTC within the balance sheets of publicly listed companies in the United States;
From chaos to order: The regulatory framework for the crypto industry in global sovereign states will be further improved, providing a basis for Web3 business scenarios to break through.
The author's second observation path is "from chaos to order." We know that for a long time, a core narrative in the cryptocurrency industry has been the anti-censorship capability brought by decentralization and anonymity. You can find similar discussions in most Web3 applications from the previous cycle, which naturally made a significant contribution to finding value support for the Web3 industry in its early stages. However, it also brought considerable harm to the industry, such as fraud and money laundering.
However, the author believes that the industry will iterate in this direction. It is not about completely abandoning Web3 fundamentalism, but rather from a pragmatic perspective, the current crypto industry will experience a transition from chaos to order, accompanied by the further improvement of the regulatory framework for the crypto industry by sovereign states worldwide. We know that in 2024, among many "crypto game hotspots," the transition of SEC Chairman Gary Gensler is highly anticipated. Under the leadership of this crypto-unfriendly chairman, the SEC has prosecuted a large number of American crypto companies, such as Ripple and Consensys, causing bottlenecks in the business development and expansion of these giants. In a previous article (Buy the rumor series: The expectation of improved regulatory environment heats up, which cryptocurrency benefits the most?), Lido was analyzed as a clear example of progress in this direction.
However, with Trump's assumption of office and his deregulatory policy preferences, combined with Gary Gensler's transition, a more relaxed, inclusive, and crypto-friendly regulatory framework is worth looking forward to. From the recent progress of related case rulings, such as Ripple and Tornado Cash, the introduction of this framework will not be far off.
The most direct benefit brought about by this change is that it has made it possible for Web3 business scenarios to break through while avoiding many potential legal risks. In the upcoming year of 2025, the author will pay special attention to the progress of such events, and everyone needs to remain sensitive to similar information, including the outcomes of other lawsuits, the introduction and advancement of related bills, changes in SEC personnel appointments, and statements and views from key decision-makers. Regarding potential breakout businesses, the author is particularly interested in two aspects:
l Ce-DeFi scenarios: Connecting traditional financial instruments with on-chain tools such as crypto assets to solve issues like funding efficiency and reducing transaction friction costs. From the flow direction of funds, it can be divided into two main categories: the first is from the traditional financial world to on-chain crypto assets, such as MicroStrategy's financial innovations. The second is from on-chain crypto assets to the traditional financial world, specifically referring to RWA based on bonds, on-chain financing channels similar to Usual Money, and stablecoins in the TradeFi field.
l DAO's role in off-chain entity business management: This direction seems a bit impulsive. Due to Trump’s policy easing related to cryptocurrency regulation, and paired with the uplift of domestic demand under "America First," will there be more organizations or companies inclined towards traditional businesses choosing to use the DAO model for internal governance, in exchange for cheaper financial services? To illustrate this with an example, if someone wants to open a Chinese restaurant, they could choose to operate through a DAO and connect to a stablecoin-based payment system, making all cash flows transparent. Moreover, if regulatory policies are further relaxed, the company’s financing and dividend processes could also be supported through the DAO.
From depression to bubble: Traditional Web3 business development focuses on three main axes: more innovative grand narratives, more robust business revenue, and a more balanced interest game model.
The author's third observation path is "from depression to bubble." We know that in 2024, traditional Web3 business hotspots experienced a significant transformation. In the first half of the year, the LRT market driven by EigenLayer primarily displayed characteristics of an industry depression period. Due to the lack of widespread profit-making effects and in the context of stock game dynamics, capital huddled together, choosing to concentrate on a few potential markets with huge scale but more distant actual business landing in the infrastructure sector, using time to exchange for space, elevating valuations while avoiding dilution of chips through matching "points strategies," thereby exploiting users. This has been analyzed in the author's previous article (Web3 oligarchs are exploiting users: From Tokenomics to Pointomics).
However, with the improvement of the market environment around mid-year and the underwhelming performance of LRT sector token prices, the focus gradually shifted to the application layer represented by TON Mini App. Compared to infrastructure, the application layer has received capital's favor due to more target choices, lower development costs, shorter landing cycles, and more easily manipulated iterative benefits. At this time, the market quickly emerged from the shadow of the depression period.
As we enter the second half of the year, with the Federal Reserve entering a rate-cutting cycle and the FUD issues surrounding VC coins, the traditional capital exit paths have been disrupted, and the market has rapidly entered a bubble phase, with capital heavily chasing meme coins that withdraw from reality in pursuit of higher capital turnover rates. In addition to meme coins themselves, launch platforms represented by Pumpfun, as well as updated tools that integrate narratives like AI Agents, are also being pursued by the market.
Looking ahead to the coming year, the author believes that traditional Web3 business will develop according to the bubble cycle model:
l Innovative grand narratives: We know that capital likes to chase high-growth tracks. The core reason lies in the enormous imaginative potential and the tolerance for current delivery, allowing valuation bubbles to be inflated further. It is also easier to attract market traders and new capital to enter, making it more convenient for investors to exit through the secondary market at the right time. Therefore, whether or not one recognizes the long-term value of a particular track, as long as it is logical, it can become an object of capital speculation during a bull market bubble. Hence, from the perspective of chasing capital gains, one should maintain sensitivity.
l More robust business revenue: For some sectors that have undergone a round of iteration, valuation models will return to reasonable ranges. At that time, the pursuit of real income will become the main theme of industry iteration, which raises higher demands for refining commercially potential needs. However, if a specific scenario can truly be discovered, the market potential will be infinite. Here, it specifically refers to the DeFi track or the Ce-DeFi track. The author is personally quite interested in the interest trading market, and those with similar thoughts are welcome to discuss with the author.
l A more balanced interest game model: We know that the current traditional VC coins are suffering from FUD, and more problems stem from the fact that the current traditional financing model has created a prisoner’s dilemma of individual optimal strategies between the project parties, primary market VCs, and secondary market investors. Each prisoner fears betrayal from the other, so they choose to betray (to ensure their own release or reduce penalties). Therefore, whether it is possible to find a better model in the new environment is also worth paying attention to. For example, the author believes that HyperLiquid is likely to discover some of the secrets within this.
From conservatism to transformation: Rare opportunities for risk assets arising from significant uncertainty.
The author's fourth observation path is "from conservatism to transformation." It needs to be explained that both conservatism and transformation here are neutral terms. Conservatism refers to compliance with existing rules, while transformation means breaking them. The main theme of 2025 will certainly be significant changes in the economy and culture triggered by political transformation, a process filled with the uncertainty brought about by the collapse of the old order. For example, uncertainties regarding the U.S.-China government debt crisis, uncertainties in monetary policies of various countries, uncertainties regarding shifts in mainstream social values, and uncertainties in international relations.
The uncertainty brings huge volatility in the risk market. Of course, if sector rotation puts the industry in a positive push, this volatility can be a good thing, and vice versa. A news flash from a couple of days ago piqued the author's interest in this direction, which stated that the FTX restructuring plan will take effect on January 3, allowing users to start receiving repayments.
We know that in the previous cycle, the mainstream political spectrum in the tech industry was relatively biased towards the Democratic Party. Therefore, it is believed that many of the big names who entered the market during the last bull run will have a hard time after Trump’s return. Thus, it is understandable that during the window period before his official assumption of office, they would try to raise relevant prices as much as possible to hedge their risk assets, leading to an escape ramp. Here, a bit of conspiracy theory: some Deep State capital suffered enormous losses due to the bankruptcy of FTX and the collapse of the crypto industry. Therefore, after Trump’s victory, they did not hesitate to use various political means to inflate crypto asset prices to an exaggerated level, allowing some already devastated balance sheets to be revived, thus avoiding their own losses.
From the FTX case, the author also gained some inspiration, and thus, in 2025, the author is quite interested in the development of the NFT track. There seem to be some similarities between the two, and combined with emerging speculative narratives like AI Agents, it is not impossible for the NFT market to experience a renaissance.