2025 Crypto Assets Market Outlook: Decentralized Finance and AI May Become Dominant

Before delving into the prospects of the Crypto Assets market in 2025, let's temporarily set aside existing notions and objectively examine the potential development trends for the future.

Overall, Web3 investments can be mainly divided into two directions: infrastructure and applications. Investment strategies can typically be classified into two categories: one appears to be unremarkable in the short term but may yield substantial returns in the long run; the other is exciting in the short term but may ultimately become worthless.

Most Crypto Assets investors enter the market in pursuit of quick and substantial returns, and are willing to take on corresponding risks. Therefore, periodic investment has become a common choice, and such investments typically yield results in the short term, only effective during specific bullish market cycles.

The year 2025 is expected to become the "regulatory year" in the field of Crypto Assets. Major economies, including the United States, plan to introduce relevant regulations domestically. This will not only enhance the confidence of traditional investors, especially the older generation, but will also filter out a few truly promising Crypto Assets projects—only those with solid fundamentals and stable cash flows will stand out.

We can foresee that the market will welcome a wave of new traditional investors. These investors possess substantial capital and will venture into the Crypto Assets space for the first time. They will not blindly follow trends, but will carefully study projects, rigorously analyze reports and data, and will only make investment decisions when it makes logical sense.

Against this backdrop, Decentralized Finance (DeFi) and Layer 1 blockchain protocols (L1) will become the preferred investment direction for traditional investors. Among them, DeFi projects have a lower market cap limit, offering greater growth potential 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 substantial capital, and sufficient funds are key to the healthy growth of the market. It's noteworthy that many institutional investors are also dominated by traditional investors. It can be anticipated that DeFi will ultimately become one of the important strategic directions for top institutional investors.

DeFi is not a cyclical investment, but rather a long-term investment, similar to how investors have historically treated BTC and ETH. The long-term potential of certain well-known DeFi projects may be seen as comparable to ETH. When investing in blue-chip DeFi projects, one should focus on long-term development; while selecting brand new DeFi native projects, one may consider short-term gains, which could also bring several times or even higher returns.

In the DeFi-dominated Crypto Assets market, many emerging projects will gradually appear, and some established projects will regain attention. There may be a wave of price increases surrounding these projects.

In the field of Decentralized Finance, many well-known applications are planning to transform into underlying infrastructure projects. This transformation will further enhance the value potential of tokens, and some projects may announce adjustments to their fee mechanisms next year, so investors need to be prepared for this. These changes will inject strong momentum into the development of Decentralized Finance.

It is expected that Decentralized Finance will dominate at least two quarters of next year, with performance potentially similar to the excitement around AI this year.

As for AI, it may face widespread criticism in popular culture by 2025 due to its rapid and uncontrolled expansion. Discussions around "responsible AI" will become the focus. Market activities surrounding Crypto Assets AI infrastructure, AI agents, and initial agent issuance may enter an adjustment period due to the narrative of "responsible AI."

But before that, AI agents may experience a round of bubble-like growth. Currently, there are 13,000 agents in the market, and this number is expected to increase to at least 100,000. Subsequently, it may enter a bubble phase and burst in the following year. The specific quarter in which this occurs will depend on the progress of AI regulatory-related events.

Regulation will also spark interest in privacy infrastructure, therefore, major projects involving confidential Decentralized Finance, privacy computing, privacy storage, and privacy inference will receive more attention, and this attention will also be reflected in their asset performance.

The Meme market will remain active. Although regulators may not support it, people will always find ways to participate. Speculators will continue to look for opportunities among the large number of 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 a portion of your investment exposure to them.

2025 will also be a year when mobile Web3 wallets and super applications emerge. Recently, a Web3 wallet company went public on Nasdaq with a valuation of $1.2 billion, which may spur speculation next year related to Web3 wallet tokens with strong revenue performance.

In summary, AI and Decentralized Finance will become the two core narratives of next year:

• Decentralized Finance is expected to dominate.
• AI agents may enter a bubble phase;
• Meme speculation will attract more people to participate;
• Privacy and DePIN (Decentralized Physical Infrastructure Network) will emerge in a certain quarter;
• Web3 wallets will receive more attention and drive mainstream adoption through more convenient user guidance and a higher quality experience.

It is important to note that these views are for reference only and should not be considered investment advice. The market changes rapidly, and investors should make judgments based on their own circumstances.