6 months ago
Every year, bulls and bears usage short-term lawsuit studies to forecast crypto armageddon oregon exponential growth. And each year, neither radical is right.
Some notable events this year: Ethereum’s Dencun Upgrade, the U.S. election, crypto ETFs, Wyoming's DUNA, the wBTC controversy, Robinhood’s Well’s notice, Hyperliquid’s adjacent $2 cardinal airdrop, Bitcoin hitting $100,000, and SEC Chair Gary Gensler’s January resignation announcement.
2024 was a twelvemonth with nary large marketplace shocks. And, though it didn’t bring successful an detonation of caller capital, it proved that a increasing fig of companies successful the crypto ecosystem are sustainable. Bitcoin is worthy $1.9 trillion and each different cryptos are worthy $1.6 trillion. The marketplace headdress of each crypto has doubled since the commencement of 2024.
The diversification of crypto has strengthened its quality to respond to shocks. Payments, DeFi, gaming, ZK, infrastructure, consumer, and more, are each increasing sub-sections. Each of these present person their ain backing ecosystems, their ain markets, their ain incentives, and their ain bottlenecks.
This year, astatine Pantera, we’ve invested successful companies that people these ecosystem-specific problems. Crypto gaming companies look issues adopting Web3 information investigation tools, truthful we invested successful Helika, a gaming investigation platform. Web3 AI products often look adoption challenges due to the fact that of the fragmentation of the AI stack, truthful Sahara AI aims to make an all-in-one level to let permissionless publication portion keeping a seamless Web2-like idiosyncratic experience.
Intent infrastructure is messy and orderflow is fragmented, truthful Everclear standardizes the process by connecting each stakeholders. zkVM’s are analyzable to integrate, truthful Nexus uses modularity successful bid to cater to customers who privation lone parts of their hyper-scalable layer. Building user apps faces the contented of attracting users, truthful we made our largest ever concern successful TON, the blockchain that straight plugs into Telegram’s 950 cardinal monthly progressive users.
We participate 2025 connected tailwinds of imaginable regulatory clarity, continued mainstream interest, and rising crypto prices. Even aft a spot of a summertime slump this year, crypto users are entering the caller twelvemonth with beardown optimism (or “greed”).
Review of 2024 Predictions:
Before we dive into 2025 predictions, let’s instrumentality a look backmost astatine however I did predicting 2024. I’ll people myself with 1 being the slightest close and 5 being the astir accurate.
The resurgence of Bitcoin and “DeFi Summer 2.0.” Accuracy: 4/5
Tokenized societal experiences for caller user usage cases. Accuracy: 2/5
An summation successful TradFi-DeFi “bridges” specified arsenic stablecoins and mirrored assets. Accuracy: 5/5
The cross-pollination of modular blockchains and Zero Knowledge Proofs. Accuracy: 4/5
More computationally intensive applications moving on-chain, specified arsenic AI and DePIN. Accuracy: 2/5
Consolidation of nationalist blockchain ecosystems and a “Hub-and-Spoke” exemplary for app-chains. Accuracy: 2/5
2025 Predictions
This year, I enlisted the assistance of investors connected the Pantera team. I’ve divided my predictions into 2 categories: rising trends and caller ideas.
Rising Trends:
By year-end, RWAs (excluding stablecoins) volition relationship for 30% of connected concatenation TVL (15% today) RWAs on-chain has accrued over 60% this year, to $13.7 billion. Around 70% of RWAs are backstage recognition and the bulk of the remainder are successful T-Bills and commodities. Inflows from these categories are accelerating, and 2025 whitethorn spot the instauration of much analyzable RWAs.
Firstly, backstage recognition is accelerating due to the fact that of improving infrastructure. Figure accounts for astir each of this, expanding by astir $4 cardinal worthy of assets successful 2024. As much companies participate this space, determination is expanding easiness to usage backstage recognition arsenic a means to determination wealth into crypto.
Secondly, determination are trillions of dollars worthy of T-Bills and commodities off-chain. There is lone $2.67 cardinal worthy of T-Bills on-chain, and their quality to make output (as opposed to stablecoins, which let the ones who mint the coin to seizure the interest), makes it a much charismatic alternate to stablecoins. Blackrock’s BUIDL T-Bill money lone has $500 cardinal on-chain, arsenic opposed to the tens of billions of authorities bills it owns off-chain. Now that DeFi infrastructure has thoroughly embraced stablecoins and T-Bill RWAs (integrating them into DeFi pools, lending markets, and perps), the friction to follow them has drastically decreased. The aforesaid goes for commodities.
Finally, the existent grade of RWAs is constricted to these basal products. The infrastructure to mint and support the RWA protocols has drastically simplified and operators person a overmuch amended knowing of the risks and due mitigations that travel with on-chain operations. There are specialized companies that negociate wallets, minting mechanisms, sybil sensing, crypto neo-banks, and more, meaning it whitethorn yet beryllium imaginable and feasible to present stocks, ETFs, bonds, and different much analyzable fiscal products on-chain. These trends volition lone accelerate the usage of RWA’s heading into 2025.
Bitcoin-Fi Last year, my prediction of Bitcoin concern was beardown but didn’t scope the 1-2% of each Bitcoins TVL mark. This year, pushed by Bitcoin-native concern protocols that bash not necessitate bridging (like Babylon), precocious returns, precocious Bitcoin prices, and accrued appetite for much BTC assets (runes, Ordinals, BRC20), 1% of Bitcoins volition enactment successful Bitcoin-Fi.
Fintechs go crypto gateways TON, Venmo, Paypal, Whatsapp person seen crypto maturation due to the fact that of their neutrality. They are gateways wherever users tin interact with crypto, but bash not propulsion circumstantial apps oregon protocols; successful effect, they tin enactment arsenic simplified entryways into crypto. They pull antithetic users; TON for its existing 950 cardinal Telegram users, Venmo and Paypal for their respective 500 cardinal payments users, and Whatsapp for its 2.95 cardinal monthly progressive users.
Felix, which operates connected Whatsapp, allows instant wealth transfers via a message, to beryllium either digitally transferred oregon tin beryllium picked up successful currency astatine spouse locations (like 7-Eleven). Under the hood, they usage stablecoins and Bitso connected Stellar. Users tin present bargain crypto connected Metamask using Venmo, Stripe acquired Bridge (a stablecoin company), and Robinhood acquired Bitstamp (a crypto exchange).
Whether intentionally oregon due to the fact that of their quality to enactment third-party apps, each fintech volition go a crypto gateway. Fintechs volition turn successful prevalence and whitethorn possibly rival smaller centralized exchanges successful crypto holdings.
Unichain becomes starring L2 by transaction volume Uniswap has a TVL of astir $6.5b, 50-80k transactions per day, and measurement of $1-4 cardinal daily. Arbitrum has ~$1.4 cardinal of transaction measurement a time (a 3rd of which is Uniswap) and Base has ~$1.5 billion of measurement a time (a 4th of which is Uniswap).
If Unichain captures conscionable fractional of Uniswap’s volume, it would easy surpass the largest L2s to go the starring L2 by transaction volume.
NFT resurgence but successful a exertion circumstantial way NFTs were meant arsenic a instrumentality successful crypto - not a means to an end. NFT’s are being utilized arsenic a inferior successful on-chain gaming, AI (to commercialized ownership of models), identity, and user apps.
Blackbird is simply a edifice rewards app that integrates NFTs into lawsuit recognition successful their level of connecting Web3 into dining. By integrating the open, liquid, and identifiable blockchain with restaurants, they tin supply user behaviour information to restaurants, and easy create/mint subscriptions, memberships, and discounts for customers.
Sofamon creates web3 bitmoji’s (which are NFTs), called wearables, unlocking the fiscal furniture of the emoji market. They admit the expanding relevance of IP connected concatenation and clasp collaboration with apical KOL’s and K-pop stars, for example, to combat integer counterfeiting. Story Protocol, which precocious raised $80 cardinal astatine a $2.25 cardinal valuation, has the broader extremity of tokenizing the world’s IP, putting originality backmost arsenic the centerpiece of originative exploration and creators. IWC (the Swiss luxury ticker brand) has a membership NFT that buys entree to an exclusive assemblage and events.
NFTs tin beryllium integrated to ID transactions, transfers, ownership, memberships, but tin besides beryllium utilized to correspond and worth assets, starring to monetary, perchance speculative growth. This flexibility is what brings NFTs power. The use-cases volition lone increase.
Restaking launches In 2025, restaking protocols similar Eigenlayer, Symbiotic, and Karak volition yet motorboat their mainnets which would wage operators from AVS and slashing. It seems that done this year, restaking mislaid relevance.
Restaking draws powerfulness arsenic much networks usage it. If protocols usage infra that is powered by a peculiar restaking protocol, it derives worth from that connection, adjacent if it is not direct. It is by this powerfulness that protocols tin suffer relevance but inactive clasp immense valuations. We judge restaking is inactive a multi cardinal dollar marketplace and arsenic much apps go appchains, they harness restaking protocols, oregon different protocols that are built connected restaking protocols.
New Ideas:
zkTLS bringing offchain information on-chain zkTLS uses zero cognition proofs to beryllium the validity of information from the Web2 world. This caller exertion has yet to beryllium afloat implemented, but erstwhile it (hopefully) does this year, it volition bring successful caller types of data.
For example, zkTLS tin beryllium utilized to beryllium that information came from a definite website to others. Currently, determination is nary mode to bash this. This tech takes vantage of advancements made successful TEE’s and MPC’s, and whitethorn beryllium further improved to let immoderate of the information to beryllium private.
This is simply a caller idea, but we foretell that companies volition measurement up to statesman gathering this and integrating it into on-chain services, similar verifiable oracles for non-financial information oregon cryptographically secured information oracles.
Regulatory support For the archetypal time, the U.S. regulatory situation seems crypto-positive. 278 pro-crypto location candidates were elected versus 122 anti-crypto candidates. Gary Gensler, an anti-crypto SEC chair, announced that helium volition beryllium resigning successful January. Reportedly, Trump is acceptable to nominate Paul Atkins to pb the SEC. He was antecedently an SEC Commissioner from 2002-2008 and is outspokenly supportive of the crypto manufacture and an advisor to the Chamber of Digital Commerce, an instauration focused connected promoting the acceptance of crypto. Trump besides named David Sacks, a tech capitalist and erstwhile CEO of Yammer and COO of PayPal, to caput the caller relation of “AI & crypto czar.” Trump’s announcement said that “[David Sacks] volition enactment connected a ineligible model truthful the Crypto manufacture has the clarity it has been asking for.”
We anticipation for a winding down of SEC lawsuits, wide definitions of crypto arsenic a peculiar plus class, and taxation considerations.
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