Looking back at the gains and losses of the crypto market in 2024, where is the road ahead in 2025?

2024 is undoubtedly an important year in the history of cryptocurrencies.

This year, the crypto industry successfully achieved a breakthrough this year, focusing on the two core narratives of ETFs and the US election, with Bitcoin as the main lever. Listed companies, traditional financial institutions and even national governments have flocked in, and mainstreaming and recognition have been greatly improved. The regulatory environment has also moved towards a clear and relaxed path with the coming of the new government. Mainstream collision, path differentiation and regulatory evolution have become the main themes of the industry this year.

01 Looking back on 2024: Bitcoin topped the list, Ethereum was caught up, and MEME casinos attracted much attention

Looking at the main developments of the industry this year, Bitcoin is undoubtedly the core narrative.

ETF and national reserves have successfully allowed Bitcoin to reach $100,000, officially declaring that Bitcoin has surpassed the connotation of cryptocurrency and has become a strong anti-inflation asset in the world. The value storage has been recognized, and BTC has begun to gradually move from digital gold to super-sovereign currency, marking that this grand financial experiment that began with Satoshi Nakamoto has achieved a phased victory. On the other hand, the Bitcoin ecosystem has been expanded this year. Although inscriptions, runes and even L2 are in a state of ice and fire from hot to extinct, Bitcoin's diversified ecosystem has been initially formed. BTCFi, NFT, games, social and other applications continue to develop. Bitcoin DeFi TVL has soared from US$300 million at the beginning of the year to US$6.755 billion, an increase of more than 20 times throughout the year. Among them, Babylon has become the largest protocol on the Bitcoin chain. As of December 20, Babylon's TVL has reached US$5.564 billion, accounting for 82.37% of the total. BTCFI in a broad sense has performed even better this year. The share of Bitcoin spot ETFs has soared, and MicroStrategy, which was selected into the Nasdaq 100, has been imitated by many, reflecting the overwhelming success of Bitcoin in the Cefi field.

Back to the public chain field, Ethereum, the leader this year, is not having such a good time. Compared with the poor performance of other assets, the decline in value capture and user activity, the narrative is not as good as before, and the "theory of value" has made Ethereum suffer. Although the slogan of Defi revival, which has already formed a consensus, is loud, except for the TVL nesting doll craze set off by re-staking, it seems that only Aave has taken it all, and the actual investment is obviously insufficient. However, the emergence of Hyperliquid, a dark horse of derivatives at the end of the year, not only revolutionized half of CEX's life, but also sounded the clarion call for a counterattack for DeFi. On the other hand, after the Dencun upgrade, Ethereum Layer 2 has accelerated its internal circulation and continued to eat up the main network share, so that the market has set off a big discussion about the Ethereum mechanism, and doubts have emerged in an endless stream. Even the rapid growth of Base has led to rumors that the future of Ethereum is Coinbase.

Solana's strong rise is in sharp contrast to this. From the perspective of TVL, Ethereum's market share in the public chain has dropped from 58.38% at the beginning of this year to 55.59%, while Solana has jumped from no such person at the beginning of the year to 6.9% at the end of the year, becoming the second largest public chain besides Ethereum. SOL has created a miracle of growth, soaring from $6 two years ago to $200 today. From this year alone, it has also risen by more than 100%. In terms of the recovery path, with its unique advantages of low cost and high efficiency, Solana aims at the core liquidity positioning, relying on the Degen culture to leap to the well-deserved king of MEME, and has become the retail investor concentration camp this year. This year, Solana's daily on-chain fees have exceeded Ethereum many times, and the growth of new developers has also surpassed Ethereum, with a significant trend of catching up.

TON and SUI also stood out this year. Telegram, which has 900 million users, has single-handedly brought the blockchain game field to the forefront, opened up a new entrance for Web3 traffic, and strongly stimulated the market that had been silent for a long time before September. TON, which has been backed by a big tree and is good at taking shade, has finally entered the fast lane of growth from the eve of the long-stayed dawn outbreak. According to Dune data, TON currently has more than 38 million on-chain users and a cumulative transaction volume of more than 2.1 billion US dollars. SUI completely convinced people with its growth. The Move language public chain has made rapid progress, with hardware development, protocol diversification, and airdrop introduction. The prospects seem bright. Compared with the price-driven SUI, the public chain Aptos, although its price performance was relatively weak during the same period, was more favored by traditional capital. This year, it successfully established cooperation with BlackRock, Franklin Templeton, and Libre. Its compliance tone may bring it a new round of RWA and BTCFI cycles.

From the application perspective, MEME is the main driver of the market this year. In essence, the rise of MEME is a sign of the current market structure change. VC tokens are not bought, and there is no target for excess liquidity, which is ultimately poured into sectors with stronger fairness and profit-seeking. In this process, the connotation of MEME is also constantly expanding, gradually developing from a single hype target to a typical representative of cultural finance, and "everything can be MEME" is happening in reality. Although MEME accounts for less than 3% of the top 300 cryptocurrencies (excluding stablecoins) in terms of market value, its trading volume continues to account for 6-7% of the market share, and recently reached 11%, making it the main track with the most concentrated liquidity. According to Coingecko data, MEME has occupied 30.67% of investors' attention this year, ranking first among all tracks. Where the attention is, the money will naturally be there, and this is indeed the case. Looking at this year's MEME, pre-sale fundraising, celebrity tokens, zoo wars, PolitFi and AI, all of them are top-tier in the circle.

Against this backdrop, the infrastructure around MEME continues to solidify, and the fair launch platform Pump.fun came into being, which not only reshaped the MEME landscape, but also successfully became one of the most profitable and successful applications this year. In November, Pump.fun became "the first Solana protocol to have a monthly revenue of more than $100 million in history." According to Dune data, as of December 22, pump.fun had accumulated revenue of more than $320 million, and the total number of deployed tokens was approximately 4.93 million.

Of course, the platform making money does not mean that retail investors make money. Considering the one in 100,000 chance of winning a gold dog, and only 3% of users can make more than $1,000 on Pump.fun, coupled with the increasingly prominent institutionalization trend of MEME, from the user's perspective, no matter how fair it seems, it is difficult to avoid cutting or being cut. Perhaps it is precisely for this reason that adding fundamentals to MEME has become a new development model for projects. Most relatively long-term projects such as Desci and AIMEME have adopted this model, but from the current point of view, short-lived is still the mainstream, and the value of "running fast to live well" is still rising.

Affected by the US election, another god-level application has surfaced. Polymarket surpassed all gambling platforms on the market and became a hit in the prediction market with high accuracy. In October alone, the Polymarket website received 35 million visits, twice as many as popular gambling websites such as FanDuel, and its monthly trading volume surged from $40 million in April to $2.5 billion. A wide range of users and real needs equals clear value applications, which is why Vitalik Buterin is full of praise for it. The only pity is that it has not achieved large-scale crypto user conversion. But the new fusion of media + gambling is undoubtedly coming slowly.

At the end of the year, the big model has already shown a fierce competition pattern from technology to application, and AI has finally counterattacked and become the dark horse of the year after a year of wandering in the Web3 hotspot. MEME was the first to explode, and Truth Terminal quickly came with the golden dog GOAT, ACT, and Fartcoin. The 100-fold myth reappeared, opening up the AI ​​Agent application craze. At present, almost all mainstream institutions are optimistic about AI Agent, believing that it is the second phenomenal track after Defi. But as of now, the infrastructure in this field has not been perfected, and the applications are mostly concentrated on the surface such as MEME and Bot. The deep integration of AI and blockchain is less, but new also means opportunities. Cyber-style speculation in coins remains to be seen.

On the other hand, from the perspective of the core driving institutions of this round of bull market, PayFi, which seamlessly connects traditional finance and Web3, must be the first to bear the brunt. Stablecoins and RWA are typical representatives. Stablecoins have really made the large-scale applications that everyone has been looking forward to this year come to the fore. Not only has it grown rapidly in the encryption field, but it has also begun to occupy a place in the global payment and remittance market. Sub-Saharan Africa, Latin America, and Eastern Europe have begun to bypass the traditional banking system and directly use stablecoins for transaction settlement, with the scale increasing by more than 40% year-on-year. The current value of stablecoins in circulation exceeds US$210 billion, significantly higher than the billions of dollars in 2020. On average, more than 20 million addresses conduct stablecoin transactions on the public blockchain each month. In the first half of 2024 alone, the settlement value of stablecoins will exceed US$2.6 trillion. From the perspective of new products, Ethena is the most outstanding stablecoin project this year, and has further spawned a boom in interest-bearing stablecoins, which is also the main driver of AAVE's revenue this year. RWA was completely ignited after BlackRock officially announced its entry. RWA, which had a market value of less than US$2 billion three years ago, has expanded to US$14 billion this year, covering multiple fields such as lending, real estate, stablecoins, and bonds.

In fact, PayFi's development is consistent with the market's pace. It is precisely because the internal market growth has encountered a bottleneck, and the mainstream institutional market as an incremental market is at the beginning of a new cycle. In order to seek incremental space, PayFi has entered a critical process at this stage. It is worth noting that due to its integration with the traditional financial system, this field is also the most favored Web3 track by government agencies. For example, Hong Kong, China, has already listed stablecoins and RWA as important areas for development next year.

Of course, although it seems to be a positive trend, it cannot be denied that under the dual background of nearly two years of macro tightening and industry downturn, the encryption field has also experienced an extremely difficult stress test. Innovative applications are difficult to show, internal disputes are intensifying, and restructuring and mergers and acquisitions are constantly taking place. The weakening of liquidity has led to the differentiation of paths in the crypto industry, forming a pattern of Bitcoin core inflows and continuous siphoning of other currencies. The copycat market has been in garbage time for most of this year. Shenyu's "no copycats in this bull market" has been repeatedly confirmed and falsified. It was not until the end of the year that it bottomed out and rebounded under the attention of Wall Street, and the copycat season kicked off. Judging from the current situation, the differentiation of paths will continue in the short term and will intensify.

02 Looking forward to 2025: New cycle, new application, new direction

Back to the present, the New Year's bell is about to ring. Looking forward to 2025, as the Trump administration opens a new era of encryption, capital-rich institutions are also eager to try. So far, more than 15 institutions have released market forecasts for next year.

In terms of price prediction, all institutions are optimistic about the value of Bitcoin, and 150,000-200,000 is the peak price range of Bitcoin considered by 6 institutions. Among them, VanEck and Dragonfly believe that the price will reach 150,000 US dollars next year, while Presto Research, Bitwise, and Bitcoin Suisse believe that it will reach 200,000 US dollars. If it is based on strategic reserves, Unstoppable Domains and Bitwise have proposed 500,000 US dollars or even higher. As for other currencies, VanEck, Bitwise and Presto Research have given predictions, believing that ETH will be around 6,000-7,000 US dollars, while Solana will be 500-750 US dollars, and SUI may also rise to 10 US dollars. Presto and Forbes believe that the total market value of cryptocurrencies will reach 7.5-8 trillion, and Bitcoin Suisse said that the total market value of altcoins will increase fivefold.

Price predictions are naturally supported. Almost all institutions believe that the US economy will have a soft landing next year, the macro environment will improve, and crypto regulation will be relaxed accordingly. More than 5 institutions have a positive view on the strategic reserve of Bitcoin, believing that at least one sovereign state and many listed companies will include Bitcoin in their reserves. All institutions believe that the increase in ETF inflows will become an objective fact.

From the perspective of specific tracks, stablecoins, tokenized assets and AI are the areas that institutions pay the most attention to. From the perspective of stablecoins, VanEck believes that the settlement volume of stablecoins will reach US$300 billion next year, while Bitwise said that with the acceleration of legislation, the acceleration of financial technology applications and the promotion of global settlement, the scale of stablecoins will reach US$400 billion. Blockworks Mippo is more optimistic and gave an estimate of US$45 million. A16z also believes that companies will increasingly accept stablecoins as a payment method. Coinbase also pointed out in the report that the next wave of real adoption of cryptocurrencies (killer applications) may come from stablecoins and payments.

In terms of tokenized assets, A16z, VanEck, Coinbase, Bitwise, Bitcoin Suisse and Framework are all optimistic about the track. A16z's prediction mentioned that as the cost of blockchain infrastructure decreases, the tokenization of non-traditional assets will become a new source of income, further promoting the decentralized economy. VanEck gave a specific number, believing that the value of tokenized securities exceeds US$50 billion, which coincides with Bitwise's forecast data. Messari gave a differentiated conclusion based on the actual situation. It believes that as interest rates fall, tokenized treasury bonds are expected to face resistance, but idle on-chain funds may gain more favor, and the focus may shift from traditional financial assets to on-chain opportunities.

In the direction of AI, A16z, which has already placed a heavy bet in the field of AI, remains highly optimistic about the combination of AI and encryption. It believes that AI's autonomous agency capabilities will be greatly enhanced, artificial intelligence can have exclusive wallets to achieve subjective behavior, and decentralized autonomous chatbots will become the first truly autonomous high-value network entities. Coinbase also recognized this, pointing out that artificial intelligence (AI) agents equipped with encrypted wallets will be the forefront of disruption. VanEck said that there are more than 1 million on-chain activities of AI agents, and Robot Ventures also believes that the total market value of AI agent-related tokens will increase at least 5 times. Although Dragonfly agrees that tokens will rise sharply, it still holds a relatively conservative view on practical applications, believing that the application of the underlying protocol may be relatively limited. Bitwise and Defiprime pointed out the core usage scenarios. The former believes that AI Agent will lead the outbreak of Meme, while the latter said that DeFi is the deep integration scenario. Messari gave a more specific path, believing that the combination of AI and encryption has three major directions. The first is a new type of AI casino, such as Bittensor and Dynamic TAO, the second is that blockchain technology will be used in the field of small and professional model fine-tuning, and the third is the combination of AI Agent and MEME.

In other aspects, the focus of institutional predictions varies. For example, YBB believes that the DeFi revival will be the main theme in 2025, Robot Ventures believes that there will be a wave of integration in the application chain and L2 track, Messari expects that almost all infrastructure protocols will adopt ZK technology in 2025, and the DEPIN industry will achieve revenues of 8 to 9 figures by 2025. VanEck and Bitcoin Suisse believe that NFT will return, etc. Due to too many words, I will not go into details here.

03 Conclusion: Where is the way for investors?

Although the arguments are slightly different and there are differences in the sub-sectors, it is not difficult to see that all institutions have optimistic and positive expectations for next year. Whether it is price increases, ecological expansion or mainstream adoption, they are expected to continue to climb to new heights in 2025.

It can be foreseen that from the perspective of price alone, the rise in the price of mainstream coins is inevitable, especially in Q1 next year, which will be a period of intensive policy benefits. The cottage market will continue to differentiate. Affected by ETFs, cottage coins that meet the compliance tone are more likely to obtain capital inflows and narrative continuation, while other currencies will slowly shrink. If macro liquidity becomes tight, the risks of cottage coins will become more prominent.

From an industrial perspective, although the strong old public chain still occupies an ecological leading advantage, the impact from the new public chain is also difficult to avoid. Ethereum's value capture and narrative will continue to ferment, but the optimistic thing is that the inflow of external funds may alleviate this, and the expansion of technical capacity and the popularization of account abstraction will also become an important breakthrough for Ethereum in 25 years. Solana still has growth momentum under the discourse power of capital, but there is a hidden crisis in its high dependence on MEME, and the competition between Base and it will become increasingly fierce. In addition, it is expected that a number of new public chains will join the market competition, such as Monad and Berachain.

The development from infrastructure to application is the general direction of future industrial development. Consumer-level applications will be the focus of applications in the next few years. Application chains and chain abstraction may become the main way to build DAPP. From the perspective of the track, the revival of DeFi has become a consensus, but at this stage it is still projected on AAVE. As for centralization, the focus is on the payment track. Hyperliquid and Ethena are still worthy of attention.

The MEME speculation wave will most likely continue in the short term, but the pace will slow down significantly, especially under the influence of the copycat season. However, key directions such as Politifi still have a relatively long narrative to go. Despite this, the infrastructure around MEME is still expected to be improved, the user experience can be optimized, and the lowering of the threshold for use and the institutionalization of MEME are inevitable trends. It is worth noting that new token launch methods will cause a new round of sensation at any time.

Since the incremental market comes from institutions, the tracks that institutions are optimistic about are expected to accelerate development, and stablecoins, AI, RWA, and DePin will still be the key narratives of the next round. In addition, in the context of tight liquidity, any on-chain liquidity tools and protocols that can increase leverage are likely to be favored.

The new cycle is coming, and as an investor, getting rid of the old and welcoming the new, discovering the cycle, following the cycle, in-depth research and participation are the only options.