Crypto Outlook 2025

Introduction

Welcome to the 2025 edition of our Crypto Theses. Over the past year, 2024, the crypto industry showed remarkable resilience and progress after a period of uncertainty and regulatory hurdles. Key moments included:

• Growing Institutional Involvement: The approval of spot exchange-traded funds (ETFs) for Bitcoin and Ethereum, attracting major capital inflows from both institutional and retail investors.
• Regulatory Shifts in the United States: Easing of regulatory pressure following a pro-crypto political environment, encouraging new projects and reducing the risk for large capital allocators.
• Bitcoin Milestones: Bitcoin price soared above $100,000, driven by high demand from ETFs and renewed optimism in digital gold.
• Emergence of Solana: Solana solidified its position alongside Bitcoin and Ethereum, establishing a “Big Three” narrative for Layer-1 (L1) blockchains.
• User Adoption Through New Platforms: Projects like Polymarket, Telegram mini-apps, and simplified memecoin trading apps drew in a wave of new participants, many from non-crypto backgrounds.
• Breakout Year for DePIN: Decentralized Physical Infrastructure Networks more than doubled in overall market cap, showcasing tangible use cases in telecommunications, energy, and data.

This report is divided into two main parts:

1. State of Crypto: Summaries of the most important developments in 2024, including macro factors, institutional adoption, memecoin mania, and more.
2. Sector Theses: A closer look at each major sector—Bitcoin, Ethereum, Solana, DeFi, AI x Crypto, and beyond.

Disclaimer: This material is for informational purposes only and does not constitute financial or legal advice. Always perform your own research and consider consulting a qualified professional before making significant investment decisions in crypto.[wlm_nonmember]

State of Crypto

Macro & Legacy Markets

2024: A Wall of Worry in Traditional Markets

Even though the world appeared to move beyond peak inflation in late 2023, many investors spent 2024 watching closely for signs of an economic slowdown or new global conflicts. The U.S. Federal Reserve began cutting rates mid-year, reversing earlier hikes, as data suggested…

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Crypto Markets & Policy

Regulatory Wins and Setbacks

2024 was pivotal for crypto regulation. On one hand, the SEC (Securities and Exchange Commission) intensified enforcement actions, suing major exchanges for allegedly listing unregistered securities. On the other hand, the U.S. Congress made progress on bills clarifying how digital assets should be categorized and how stablecoins could be regulated.

• New Administration: A pro-crypto presidential victory in late 2024 resulted in optimism that the SEC’s overly strict stance might soften, encouraging more institutional investors to join the space.
• Stablecoin Legislation: Draft laws focused on creating a stable framework for issuing and managing stablecoins. This could expand mainstream usage of stablecoins for everyday transactions and cross-border payments.

Key Policy Theses for 2025

• Institutional Guardrails: Expect clearer guidelines on what qualifies as a security versus a commodity in crypto.
• Focus on Self-Custody: Lawmakers may prioritize preserving the right to self-custody digital assets, while also tackling privacy tools that enable illicit finance.
• CBDC Outlook: A U.S. central bank digital currency remains unlikely under the current political climate, shifting attention to private stablecoins instead.

Institutional Adoption

The ETFs Are Here

The biggest story in institutional crypto for 2024 was the successful approval and launch of spot ETFs for Bitcoin and, later, Ethereum. This resulted in:

• Large Inflows: Some ETFs broke global records for fastest AUM growth, showing retail and professional appetite for secure, regulated spot exposure to crypto.
• Beyond ETFs: Asset managers branched into real-world asset (RWA) tokenization, stablecoin issuance, and more advanced blockchain products.

Tokenization of Real-World Assets

Demand for on-chain versions of Treasuries, real estate, and various securities soared. Traditional finance giants like BlackRock and Franklin Templeton introduced tokenized money market funds, aiming to provide a mix of convenience, real-time settlement, and fractional ownership. This trend lowered barriers for institutional involvement, making crypto a recognized environment for global capital markets.

Cross-Chain Payment Solutions

Payment providers and banks continued exploring stablecoin rails to reduce settlement times. Projects like PayPal’s PYUSD stablecoin found success, integrating into DeFi platforms to offer cheap cross-border transfers. Traditional credit card companies also began pilot programs using stablecoins for near-instant settlement.

The Rise of Solana

Solana’s Breakthrough Year

Solana stood out as one of 2024’s biggest success stories:

• Price & Market Cap Growth: SOL token appreciated over 120%, climbing into the top three by market cap.
• Technical Upgrades: The Firedancer client, new SPL token standards, and ZK-based compression solutions helped Solana handle millions of transactions cheaply.
• Ecosystem Diversity: From fast DEXs (decentralized exchanges) and memecoins to advanced DePIN projects (Helium, Render), Solana proved it could be a hub for every type of crypto activity.

Why Users Migrated to Solana

1. Speed and Low Fees: Solana’s base layer handles thousands of transactions per second with minimal costs, ideal for high-volume trading or consumer apps.
2. Strong Developer Support: Funding and community grants encouraged creative solutions in DeFi, consumer gaming, data networks, and more.
3. Upbeat Narrative: Compared to Ethereum’s perceived bottlenecks and higher fees, Solana’s “fast and cheap” storyline resonated, attracting a wave of user adoption.

Memecoins

Market Share & Speculation

Memecoins continued to be a crowd-puller, capturing roughly 6–11% of total crypto trading volume throughout 2024. Some memecoins rose from micro-cap to multi-billion-dollar valuations practically overnight, driven by viral social media campaigns. Key factors fueling memecoin growth included:

• Surplus Capital: As crypto prices rose, many traders looked for high-risk, high-reward plays to grow their newfound capital.

• Simplified Platforms: Tools like Pump.fun on Solana let anyone mint a memecoin with just a few clicks, fueling an explosion in new token launches.

• Mobile-Focused Apps: Platforms such as Moonshot integrated user-friendly features like Apple Pay, bringing in first-time crypto investors.

Outlook for 2025
Memecoins may remain popular thanks to their novelty and the gambling-like appeal of potentially winning big. High-throughput chains like Solana, Base, and others will likely continue to be home to these tokens, as low fees keep users active in speculative trading. However, the majority of memecoins won’t hold long-term value, so investors should exercise caution.

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Fundraising & Trends

Fundraising Recap
Although total crypto fundraising in 2024 was lower than the peak in 2021, several key areas thrived:

• Infrastructure (Layer-1s and Data Availability): Projects like Monad Labs raised $225 million, focusing on high-performance EVM scaling. Others like Berachain and EigenLabs also secured funding near or above $100 million.

• AI & Crypto: Combining AI with blockchain was a top narrative; startups building AI agent infrastructure or AI-focused blockchains each raised over $1 billion.

• DePIN: Funding in DePIN soared ~300%, reflecting excitement about decentralized wireless, energy, and compute networks.

VC Barbell: AI & DePIN

Venture capital interest concentrated around two areas:

1. AI x Crypto: Next-generation compute, AI data sets, and decentralized training frameworks.
2. DePIN: Solutions tackling real-world utility (telecom, renewable energy, sensor networks) with crypto-based incentives.

As speculation around NFTs and gaming cooled, many VCs redeployed capital into these newer, emerging categories.

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Where Are The Users?

Indicators of Real User Growth

While crypto address data can be misleading, several real-world success stories:

1. Base Onchain Summer: At its peak, the Base chain topped its mobile app charts when new memecoins started trending, suggesting substantial new retail users joined.
2. Stablecoins in Emerging Markets: Millions of people used stablecoins as a real-world hedge vs. inflation in countries with weaker currencies.
3. Telegram Mini-Apps on TON: Viral tap-to-earn mini-games like Noticon and Hamster Kombat attracted tens of millions of daily users worldwide, bringing casual gamers into crypto.
4. Polymarket’s Prediction Markets: Over 1 million new accounts arrived to bet on the U.S. election, indicating many new on-chain interactions.
5. Hyperliquid DEX: A derivative exchange that feels as fast as centralized platforms, proving that on-chain trading can rival well-known centralized exchanges.

What This Means for 2025
Continued refinements in user experience (especially on mobile) will likely drive even more adoption. Chain abstraction—where the blockchain is hidden from users—could make crypto usage feel as simple as any ordinary app, allowing for further mainstream crossover.

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Breakthrough in Decentralized Physical Infrastructure Networks (DePIN)

2024: A Big Year for DePIN
The total DePIN market cap grew by 132%, surpassing $40 billion. DePIN includes networks that incentivize people to build and maintain physical infrastructure—like telecom towers, solar farms, or sensor grids—using blockchain-based rewards.

• Helium Mobile: Gained over 120,000 subscribers by offering a $20/month unlimited mobile plan powered by community-owned hotspots.

• Glow (Energy): Earned $25+ million in revenues from solar installations, proving DePIN can address critical global needs.

• GEODNET (Data): Built the world’s largest real-time GPS correction network, outpacing even long-established centralized competitors.

2025 Theses for DePIN

• Wireless & Energy will likely be the biggest sub-sectors, as telecom companies and renewable-energy providers look for more cost-effective ways to scale infrastructure.

• Further Government Partnerships could emerge as local and national authorities see how DePIN networks can lower costs and speed up projects.

• Competition Among Blockchains will intensify as Solana, Base, IoTeX, and specialized L1s vie to become the go-to home for DePIN deployments.

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The Sector Theses

Below is a deeper look at each major area in crypto. Even at a high level, these theses should help you see how different parts of the crypto ecosystem evolved in 2024—and where they might head next year.

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Bitcoin

2024 Recap

• New All-Time High: With strong ETF inflows and a friendlier regulatory environment, Bitcoin soared above $100,000.

• Institutional Confidence: Corporations like MicroStrategy continued buying. Spot ETFs held over 1.1 million BTC total by December.

• Ordinals & Runes: “Bitcoin NFTs” (Ordinals) and “Bitcoin memecoins” (Runes) introduced new use cases, despite Bitcoin’s simple design. Activity peaked in certain months, but user experience remains clunky.

Network Evolution

• Programability Push: Experiments like BitVM, Bitcoin staking (Babylon), and multi-layer solutions are gaining attention, though it’s unclear how big this “Bitcoin DeFi” can become.

• Crypto Culture: Many still view Bitcoin primarily as digital gold or a global store of value, overshadowing attempts at advanced functionality.

2025 Outlook

• ETF Expansion: More institutional inflows to spot BTC ETFs could keep price momentum going.

• Regulatory Tailwinds: A crypto-friendly White House might further encourage large corporate treasury allocations.

• Experimentation: Developers may keep pushing ways to bring advanced apps to Bitcoin, but the base network’s conservative ethos may slow widespread adoption of new features.

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Ethereum

2024 Recap

• Underperformance: Despite its own spot ETF, ETH lagged behind both Bitcoin and Solana in price gains.

• Layer-2 Dominance: Activity moved from mainnet to optimistic or zero-knowledge rollups (e.g., Arbitrum, Optimism, zkSync), raising questions about how Ethereum will capture long-term value.

• Supply & Fees: Lower on-chain usage meant ETH supply became inflationary for much of the year, hurting the “ultra sound money” narrative.

Key Developments

• Rollup Roadmap: L2s saw explosive growth, but critics wonder if these rollups drain too much value away from the base chain.

• DA Fee Debate: Data availability (DA) fees remain minimal, possibly leaving Ethereum undercompensated for the security it provides to L2s.

2025 Outlook

• Focus on Monetization: Ethereum may need new technical upgrades or fee models to ensure the mainnet remains a source of sustainable revenue.

• Multi-Rollup Tensions: More major projects (Uniswap, Frax) could build their own Layer-2 networks, potentially fragmenting liquidity if not well coordinated.

• “Still Number One in DeFi”: Despite challenges, Ethereum remains the biggest hub for decentralized finance, with the largest developer community and extensive brand recognition.

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Solana

2024 Recap

• Major Price Surge: SOL climbed ~120%.

• Robust Ecosystem: Solana apps outperformed many on Ethereum in trading volumes. Memecoins and DePIN projects flocked to Solana for speed and low fees.

• Stability Improvements: Fewer network outages thanks to codebase refinements and new client implementations like Firedancer (in limited rollout).

What Drove Adoption?

1. User-Friendly Wallets: Mobile-first solutions like Phantom simplified crypto for newcomers.
2. Memecoin Catalysts: High-throughput plus near-zero fees created a thriving memecoin market.
3. DePIN Magnet: Wireless (Helium), rendering services (Render), and sensor networks found Solana the ideal chain.

2025 Outlook

• Firedancer Rollout: A fully deployed Firedancer client could boost throughput and stability even more.

• Institutional Interest: Possible Solana spot ETF filing would cement SOL’s position as a mainstream investment, further expanding market share.

• Continued Ecosystem Growth: Solana aims to prove it can match or exceed Ethereum in developer community and real usage across all categories.

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Other Layer-1s & Infrastructure

High-Performance L1s

• Sui & Aptos: Both saw steady user and developer growth, emphasizing Move-based smart contracts.

• TON: Built around Telegram mini-games, TON attracted millions of casual gamers, though real on-chain usage remains mixed.

• Tron: Maintained its focus on stablecoins and cross-border payments, especially in emerging markets.

Modular Blockchains (Celestia, Avail, EigenDA)

• Targeting the separation of execution, data availability, and settlement.

• Celestia advanced “lazybridging” for cross-chain communication, but adoption hinges on whether developers move from monolithic chains to modular systems.

Next Gen L2s

• Base, Arbitrum, Optimism, zkSync: Already established strong user bases.

• Eclipse, Moverin: Bringing Solana VM or Move VM to Ethereum, aiming for the best of both worlds.

Avalanche & Cosmos

• Avalanche: Rolling out the Avalanche9000 upgrade for better subnets and faster cross-subnet communication.

• Cosmos: Maintained governance ease and alignment, but certain chains (like Noble for USDC) thrived, indicating potential for specialized appchains.

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Decentralized Finance (DeFi)

Decentralized Exchanges & Trading

• Spot DEX volumes grew ~170% year-over-year, while derivative DEX volumes rose ~328%.

• New players (Raydium on Solana, Hyperliquid on its own chain) challenged mainstays like Uniswap and dYdX.

• Prediction markets (Polymarket) boomed during the U.S. election, adding diverse use cases.

Real-World Assets (RWAs)

• Tokenized treasuries, corporate debt, and real estate saw rapid expansion, crossing $9 billion in total value locked.

• Discussions shifted from “importing real assets into crypto” to “exporting on-chain yields to traditional finance.”

MEV & Intent-Based Systems

• MEV (Maximal Extractable Value) remains a challenge, but new solutions like CoW Swap, UniswapX, and intent-based auctions redistribute value back to users.

• Larger systems like SUAVE or aggregator networks could unify cross-chain liquidity to further reduce MEV issues.

Chain Abstraction & Interoperability

• Protocols like LayerZero, Arcus, and Omni advanced cross-chain messaging, letting users interact with multiple chains seamlessly.

• Solver Networks: Off-chain entities that route trades, bridging or swapping across multiple blockchains behind the scenes.

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AI x Crypto

Overview of 2024

• Over $1 billion in private funding went to AI-focused crypto projects, while public “AI tokens” soared from $5 billion to $60 billion in combined market cap.

• Key areas included decentralized compute, AI model marketplaces, AI agent frameworks, and new AI blockchains.

Major Developments

• Bittensor: Marketed as “the Bitcoin of AI,” with subnets for specialized tasks. Circulating valuations near $4 billion. Some question its token design and decentralized research approach.

• AI Agents: Emerged as the year’s buzziest narrative—autonomous bots that interact on-chain for trading, data analysis, or content creation. Tools like Autonolas and Wayfinder help developers spin up AI agents easily.

2025 Outlook

• Decentralized Compute: Many networks (Akash, io.net, etc.) want to provide cheaper GPU power for training AI models, but capturing enterprise demand is challenging.

• Open Source vs. Closed Source AI: Crypto can offer incentives to open-source AI model creation, but major breakthroughs still often come from well-funded corporate labs.

• Agent Communities: AI agents might cultivate their own meme cultures, tokens, or entire user followings, blurring lines between entertainment and utility.

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DePIN

2024: Year of Real Adoption
DePIN soared to $40+ billion in total market cap, with wireless and energy leading the charge:

1. Helium: Scaled its mobile services rapidly, also forging partnerships with large telecom carriers for “carrier offload.”
2. Energy Networks: Glow, DAWN, and other projects raised millions to decentralize solar farms, battery storage, and local grids.
3. Data Collection: GEODNET built the largest GPS correction network in the world, surpassing established competitors.

Why DePIN Works

• Distributed Capital Expenditures: Instead of one big company paying for everything, individuals and small firms operate infrastructure nodes for token rewards.

• Fast Global Scaling: DePIN can add thousands of hardware units (hotspots, solar panels, sensors) worldwide in months rather than years.

2025 Prospects

• DePIN in energy and telecom could solidify into multi-billion-dollar industries.

• Governments may partner with DePIN for cost savings or to reach underserved areas.

• Rival blockchains will race to attract these high-impact networks, offering grants, dev support, and chain-level optimizations.

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Consumer Sector

Web3 Gaming

• Daily on-chain gaming addresses hit new records; some titles on Ronin or Solana drew hundreds of thousands of daily active users.

• Telegram Mini-Games: Casual tap-to-earn setups introduced millions to crypto in a less intimidating format.

• Play-to-Airdrop: Projects like Pirate Nation offered gaming experiences with potential token airdrops, though some are shifting to “pay-to-airdrop” to deter bots.

Memecoins

• Solana remains a hub for memecoins, with some coins commanding multi-billion-dollar market caps almost overnight.

• Launchpads like Pump.fun facilitate easy token creation, though the vast majority fail to surpass $1 million in market cap.

SocialFi & NFTs

• Decentralized social (Lens, Farcaster) gained nice traction, focusing on data ownership and modular front-end experiences.

• NFTs saw reduced trading volume overall, but successful IP expansions (Pudgy Penguins, Azuki, etc.) built stronger brand identities.

• Ordinals on Bitcoin revived interest in NFT-like collectibles outside of Ethereum.

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CeFi

ETFs & Traditional Access

• Bitcoin ETFs and newly launched Ethereum ETFs proved extremely popular, breaking AUM growth records.

• Retail and hedge funds poured money into these ETFs for straightforward, regulated exposure to crypto, reducing friction compared to exchanges.

Exchanges

• Regulatory Scrutiny: Exchanges like Binance and Coinbase fought SEC lawsuits or settled fines. Several sought licenses in crypto-friendly regions like Dubai or Singapore.

• Product Expansion: Many introduced new features—on-chain integrations, advanced trading, margin on tokenized real assets, and stablecoin promotions.

• Stablecoin Wars: Exchanges partnered with stablecoin issuers (e.g., FDUSD, USDe) to offer higher yields, fueling competition in the stablecoin space.

Stablecoins

• Tether (USDT): Continued dominating global usage, especially in emerging markets.

• USDe (Ethena) & Others: Introduced yield-bearing designs leveraging derivatives markets.

• Payments & Fintech: Companies like Revolut, Stripe, and Robinhood either launched or planned their own stablecoin to streamline digital payments.

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Conclusion & Final Observations

2024 proved to be a transformative year for crypto, setting the table for potentially even greater expansions in 2025. Key takeaways include:

• Institutional Grounding: Spot ETFs and real-world asset tokenization have made crypto more palatable to large investors who were once skeptical.

• Regulatory Progress: A friendlier U.S. administration offers hope for clearer rules around stablecoins, DeFi, self-custody, and token classifications, although vigilance is needed as policy can still shift unpredictably.

• Multi-Chain Future: Ethereum remains a strong leader in DeFi, but Solana’s rapid growth plus new L1s and L2s challenge the idea that one chain will rule them all.

• Real Utility: DePIN’s success in telecom, energy, and data networks indicates crypto can power infrastructure that impacts everyday life, not just digital speculation.

• AI & Crypto Convergence: The hype around AI agents and decentralized compute could introduce powerful new functionalities—but also bring risks, such as hype cycles and uncertain token economics.

• Consumer Apps & Memecoins: Accessible UIs and low fees continue attracting newcomers who might once have considered crypto too technical. Memecoin mania won’t fade immediately; it serves both as a gamble and a viral marketing tool, onboarding a new wave of curious participants.

As 2025 unfolds, crypto’s major themes will likely revolve around consolidation, usability, and tangible use cases. Whether you’re an experienced participant or someone transitioning from real estate or gold investments, staying informed on these high-level trends can help you navigate a market that remains exciting, volatile, and full of opportunities.

Important Reminder
Always do your own due diligence when investing in any digital asset. While the growth stories and predictions above may sound compelling, the crypto landscape can change rapidly. Evaluate your risk tolerance and consider consulting professionals when making major investment choices.

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