Yearly, bulls and bears use short-term case research to forecast crypto armageddon or exponential development. And yearly, neither group is true.
Some notable occasions this 12 months: Ethereum’s Dencun Improve, the U.S. election, crypto ETFs, Wyoming’s DUNA, the wBTC controversy, Robinhood’s Effectively’s discover, Hyperliquid’s close to $2 billion airdrop, Bitcoin hitting $100,000, and SEC Chair Gary Gensler’s January resignation announcement.
2024 was a 12 months with no main market shocks. And, although it didn’t herald an explosion of recent capital, it proved {that a} rising variety of firms within the crypto ecosystem are sustainable. Bitcoin is price $1.9 trillion and all different cryptos are price $1.6 trillion. The market cap of all crypto has doubled for the reason that begin of 2024.
The diversification of crypto has strengthened its skill to react to shocks. Funds, DeFi, gaming, ZK, infrastructure, client, and extra, are all rising sub-sections. Every of those now have their very own funding ecosystems, their very own markets, their very own incentives, and their very own bottlenecks.
This 12 months, at Pantera, we’ve invested in firms that focus on these ecosystem-specific issues. Crypto gaming firms face points adopting Web3 information evaluation instruments, so we invested in Helika, a gaming evaluation platform. Web3 AI merchandise typically face adoption challenges due to the fragmentation of the AI stack, so Sahara AI goals to create an all-in-one platform to permit permissionless contribution whereas maintaining a seamless Web2-like person expertise.
Intent infrastructure is messy and orderflow is fragmented, so Everclear standardizes the method by connecting all stakeholders. zkVM’s are sophisticated to combine, so Nexus makes use of modularity with a view to cater to clients who need solely components of their hyper-scalable layer. Constructing client apps faces the difficulty of attracting customers, so we made our largest ever funding in TON, the blockchain that straight plugs into Telegram’s 950 million month-to-month lively customers.
We enter 2025 on tailwinds of attainable regulatory readability, continued mainstream curiosity, and rising crypto costs. Even after a little bit of a summer season droop this 12 months, crypto customers are coming into the brand new 12 months with robust optimism (or “greed”).
Evaluation of 2024 Predictions:
Earlier than we dive into 2025 predictions, let’s have a look again at how I did predicting 2024. I’ll rating myself with 1 being the least correct and 5 being probably the most correct.
- The resurgence of Bitcoin and “DeFi Summer season 2.0.” Accuracy: 4/5
- Tokenized social experiences for brand spanking new client use circumstances. Accuracy: 2/5
- A rise in TradFi-DeFi “bridges” reminiscent of stablecoins and mirrored belongings. Accuracy: 5/5
- The cross-pollination of modular blockchains and Zero Information Proofs. Accuracy: 4/5
- Extra computationally intensive purposes transferring on-chain, reminiscent of AI and DePIN. Accuracy: 2/5
- Consolidation of public blockchain ecosystems and a “Hub-and-Spoke” mannequin for app-chains. Accuracy: 2/5
2025 Predictions
This 12 months, I enlisted the assistance of traders on the Pantera group. I’ve break up my predictions into two classes: rising traits and new concepts.
Rising Traits:
By year-end, RWAs (excluding stablecoins) will account for 30% of on chain TVL (15% right this moment)
RWAs on-chain has elevated over 60% this 12 months, to $13.7 billion. Round 70% of RWAs are non-public credit score and nearly all of the remainder are in T-Payments and commodities. Inflows from these classes are accelerating, and 2025 might even see the introduction of extra complicated RWAs.
Firstly, non-public credit score is accelerating due to enhancing infrastructure. Determine accounts for nearly all of this, rising by nearly $4 billion price of belongings in 2024. As extra firms enter this house, there may be rising ease to make use of non-public credit score as a method to maneuver cash into crypto.
Secondly, there are trillions of {dollars} price of T-Payments and commodities off-chain. There may be solely $2.67 billion price of T-Payments on-chain, and their skill to generate yield (versus stablecoins, which permit those who mint the coin to seize the curiosity), makes it a extra engaging various to stablecoins. Blackrock’s BUIDL T-Invoice fund solely has $500 million on-chain, versus the tens of billions of presidency payments it owns off-chain. Now that DeFi infrastructure has totally embraced stablecoins and T-Invoice RWAs (integrating them into DeFi swimming pools, lending markets, and perps), the friction to undertake them has drastically decreased. The identical goes for commodities.
Lastly, the present extent of RWAs is proscribed to those primary merchandise. The infrastructure to mint and keep the RWA protocols has drastically simplified and operators have a significantly better understanding of the dangers and applicable mitigations that include on-chain operations. There are specialised firms that handle wallets, minting mechanisms, sybil sensing, crypto neo-banks, and extra, that means it might lastly be attainable and possible to introduce shares, ETFs, bonds, and different extra complicated monetary merchandise on-chain. These traits will solely speed up using RWA’s heading into 2025.
Paul Veradittakit is a speaker at Consensus Hong Kong Feb 18-20, 2025.
Bitcoin-Fi
Final 12 months, my prediction of Bitcoin finance was robust however didn’t attain the 1-2% of all Bitcoins TVL mark. This 12 months, pushed by Bitcoin-native finance protocols that don’t require bridging (like Babylon), excessive returns, excessive Bitcoin costs, and elevated urge for food for extra BTC belongings (runes, Ordinals, BRC20), 1% of Bitcoins will take part in Bitcoin-Fi.
Fintechs turn into crypto gateways
TON, Venmo, Paypal, Whatsapp have seen crypto development due to their neutrality. They’re gateways the place customers can work together with crypto, however don’t push particular apps or protocols; in impact, they’ll act as simplified entryways into crypto. They appeal to totally different customers; TON for its present 950 million Telegram customers, Venmo and Paypal for his or her respective 500 million funds customers, and Whatsapp for its 2.95 billion month-to-month lively customers.
Felix, which operates on Whatsapp, permits immediate cash transfers by way of a message, to be both digitally transferred or could be picked up in money at associate areas (like 7-Eleven). Below the hood, they use stablecoins and Bitso on Stellar. Customers can now purchase crypto on Metamask utilizing Venmo, Stripe acquired Bridge (a stablecoin firm), and Robinhood acquired Bitstamp (a crypto change).
Whether or not deliberately or due to their skill to help third-party apps, each fintech will turn into a crypto gateway. Fintechs will develop in prevalence and should maybe rival smaller centralized exchanges in crypto holdings.
Unichain turns into main L2 by transaction quantity
Uniswap has a TVL of just about $6.5b, 50-80k transactions per day, and quantity of $1-4 billion every day. Arbitrum has ~$1.4 billion of transaction quantity a day (a 3rd of which is Uniswap) and Base has ~$1.5 billion of quantity a day (a fourth of which is Uniswap).
If Unichain captures simply half of Uniswap’s quantity, it could simply surpass the most important L2s to turn into the main L2 by transaction quantity.
NFT resurgence however in a software particular method
NFTs have been meant as a device in crypto – not a method to an finish. NFT’s are getting used as a utility in on-chain gaming, AI (to commerce possession of fashions), id, and client apps.
Blackbird is a restaurant rewards app that integrates NFTs into buyer identification of their platform of connecting Web3 into eating. By integrating the open, liquid, and identifiable blockchain with eating places, they’ll present client habits information to eating places, and simply create/mint subscriptions, memberships, and reductions for purchasers.
Sofamon creates web3 bitmoji’s (that are NFTs), referred to as wearables, unlocking the monetary layer of the emoji market. They acknowledge the rising relevance of IP on chain and embrace collaboration with prime KOL’s and Ok-pop stars, for instance, to battle digital counterfeiting. Story Protocol, which lately raised $80 million at a $2.25 billion valuation, has the broader aim of tokenizing the world’s IP, placing originality again because the centerpiece of inventive exploration and creators. IWC (the Swiss luxurious watch model) has a membership NFT that buys entry to an unique group and occasions.
NFTs could be built-in to ID transactions, transfers, possession, memberships, however may also be used to symbolize and worth belongings, resulting in financial, probably speculative development. This flexibility is what brings NFTs energy. The use-cases will solely enhance.
Restaking launches
In 2025, restaking protocols like Eigenlayer, Symbiotic, and Karak will lastly launch their mainnets which might pay operators from AVS and slashing. Plainly via this 12 months, restaking misplaced relevance.
Restaking attracts energy as extra networks use it. If protocols use infra that’s powered by a specific restaking protocol, it derives worth from that connection, even when it’s not direct. It’s by this energy that protocols can lose relevance however nonetheless maintain enormous valuations. We consider restaking remains to be a multi billion greenback market and as extra apps turn into appchains, they harness restaking protocols, or different protocols which can be constructed on restaking protocols.
New Concepts:
zkTLS bringing offchain information on-chain
zkTLS makes use of zero data proofs to show the validity of information from the Web2 world. This new know-how has but to be absolutely carried out, however when it (hopefully) does this 12 months, it’ll herald new kinds of information.
For instance, zkTLS can be utilized to show that information got here from a sure web site to others. At present, there is no such thing as a method to do that. This tech takes benefit of developments made in TEE’s and MPC’s, and could also be additional improved to permit a number of the information to be non-public.
It is a new concept, however we predict that firms will step as much as start constructing this and integrating it into on-chain companies, like verifiable oracles for non-financial information or cryptographically secured information oracles.
Regulatory help
For the primary time, the U.S. regulatory surroundings appears crypto-positive. 278 pro-crypto home candidates have been elected versus 122 anti-crypto candidates. Gary Gensler, an anti-crypto SEC chair, introduced that he might be resigning in January. Reportedly, Trump is ready to appoint Paul Atkins to steer the SEC. He was beforehand an SEC Commissioner from 2002-2008 and is outspokenly supportive of the crypto business and an advisor to the Chamber of Digital Commerce, an establishment targeted on selling the acceptance of crypto. Trump additionally named David Sacks, a tech investor and former CEO of Yammer and COO of PayPal, to go the brand new function of “AI & crypto czar.” Trump’s announcement mentioned that “[David Sacks] will work on a authorized framework so the Crypto business has the readability it has been asking for.”
We hope for a winding down of SEC lawsuits, clear definitions of crypto as a specific asset class, and tax concerns.