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As the world continues to burn in front of our very eyes (at least according to mainstream media), something transformative is happening in an evergrowing pocket on the outskirts of cyberspace.
Riding on the tailwinds of 2024’s glory, the tectonic plates of society are shifting right beneath our feet and ushering in a new era for the crypto industry!
From Trump’s victory and Trudeau’s resignment to Gensler's upcoming departure from the SEC and the radical actions of the South American presidential dynamic duo (Argentina’s Milei and El Salvador’s Bukele), the geopolitical state of the world has become/is becoming much more friendly to techno-economic experimentation.
While in the moment and on the surface, tremendous noise is disrupting signals that can momentarily derail us, the truth of the matter is that this cycle is VERY similar to previous ones, so much so that, in fact, it has fractal traces of them all, making its perception totally different.
Like a volleyball held underwater, it is only a matter of time before the confluence of bullish factors drive the market to new highs. A shorthand list of these factors include the FTX estate payouts (People need to throw that capital into something to recoup their losses, a new regulatory regime powered by speculation of QE & YCC (Trump’s policies for positioning dollar, tariffs, interest rates, and immigration), instability in other leading economies such as the UK and China (Citizen capital needs an outlet) all align to produce an epic finale to this cycle of crypto…
So, without further ado, let’s whip out the crystal ball and take a peek at what 2025 has in store for us:
Disclaimer:
* These are in no specific order.
** Nothing here is investment advice.
*** These are not to be used for making financial decisions.
Nothing is more accurate at expressing the state of the crypto industry than total Market capitalization.
Starting the year at $3.28 Trillion, with BTC representing $1.88 Trillion (~57.4%), stablecoins $220 Billion (~6.7%), and altcoins around ~$1.18 Trillion (~35.9%); it feels as though regardless of short-term volatility, we are on track for a clean 2x and beyond.
Similar to previous market cycles, it is best to assume that all three categories will expand in tempos similar to cycles past. Personally, I am anticipating the largest relative growth in Altcoins, followed by stablecoins, and lowest for BTC.
While the exact timing of when the growth happens may be near impossible to guesstimate, and the large, prolonged capital rotations between sectors and cabals causing irrational fluctuations will cause noise that discombobulates the charts and imposes psychological dismay, expectations for MCAP will tap the $7–10 Trillion range at some point is totally within reach.
Conclusion on Marketcap Expansion:
Bullish. Up and the right, with a lot of volatility in between.
HAH, Got eeeem.
Slamming across every Twitter feed, YouTube short, Instagram reel, TikTok stream, and even cover stories of mainstream media, Memecoins have blasted through the socio-financial stratosphere and made their way into the consciousness of the masses.
After all, 10,000% gains within 7 days are hard to ignore.
People have posited sophisticated theories of financial nihilism and credited memecoins as being a supernatural phenomenon materializing the financialization of culture.
These have been underscored by the incredible success of things like DOGE, PEPE, SPX6900, GIGA, and MOG, among a select group of others.
Some people have made life-changing money on them.
Some more shall do the same.
But almost everybody else will, in fact, lose money on them.
The fundamental value propositions of memecoins (or lack thereof), the surplus of anonymous actors, and opaqueness regarding responsibility result in a toxic nature of fast money. Which results in capital destruction.
I want to believe in the Memecoin SuperCycle… but I personally do not. Memecoins are here to stay, but they will not be the drivers of salvation they claim/many assume them to be; they are digitized lottery tickets.
After nearly capsizing with a 99% drawdown and the destruction of billions of speculator dollars, we fast-forward to today and see that NFTs as a category have matured tremendously since their boom times in 2021.
To be clear, a “return” of the NFT market does not mean that existing legacy collections of 10,000 monkey PFPs will rise to their hypomanic levels (although this is always on the table). However, we have already begun to see impulses in some outliers, such as Pudgy Penguins and their kin that have 2x’d in the last year alone while conducting arguably the most successful memecoin launch to an NFT community. But, generally speaking, a return of the NFT market refers to the type of assets that will begin to attract a lot of attention.
It could be 1-of-1s.
It could be AI-generated art.
It could be in-game items.
Possibly phygital goods.
The surface area is tremendous, and with the improvements of UX in wallets, the potential to attract resources here is endless.
As market capitalization of the broader industry rises and excess money begins sloshing around the hands of the mal-intentioned or inexperienced, rampant speculation will rear its head once again… and where else but the grayest of all sectors?
NFTs are still so far removed from regulation that they just so happen to be the perfect vehicle to create vaporware with the smallest chance of a potential legal recourse.
If/when NFT’s get their time to shine again, that would be a strong indicator of the cycle’s final chapter… Bullish for the Bears.
Insanely hyped at the moment, but long term, absolutely transformative to facets of life beyond just crypto; AI agents are the hottest narrative controlling the vast majority of mindshare at the start of the year.
Current platforms, such as Virtuals, Vvaifu, and Griffain, allow people to launch their own digital agents tithed to a token. Even though the narrative is very young, it has grown exponentially on the back of last year's AI hype and the pumpfun launch mechanism. Agents are coming online by the minute AIXBT, AI16Z, Aimonica, and so on.
While, at the moment, these tokens don't carry intrinsic value, they seem to be the stomping grounds for speculating on how humans can have AI agents generate value for them in the future.
The cycles Wild Card. The potential here is equal to, if not greater than, memecoins. Glorious pumps are very possible, as are incredible dumps. I wouldn't be looking for any long-term positions, but it might be worthwhile to find short-term solutions to bolster portfolio value.
This is a very touchy subject in the world of crypto. Some think regulation is good; others vehemently oppose it for being antithetical to crypto’s open nature, and yet others demand a balanced approach with varying degrees of regulation. Regardless of which side you take, regulation is inevitable.
Since the birth of Bitcoin, a series of cataclysmic events, from Mt. Gox to FTX, 3AC, and beyond, have brought to light the parasitic nature of humans to partake in fraudulent, mal intentioned, or just simply unintelligent behavior when operating with open systems. This has resulted in tremendous pain for market participants and caught the eye of regulators from all parts of the world.
Policy has been the leading topic of conversation for many years now, yet it continues to lack anything concrete. Given how fast the industry evolves, lacks universal standards, and how slow policy implementation generally is, this actually makes sense; in order to understand how to regulate something properly, one must first understand what that something is and how it actually works.
While some countries, such as the UAE, Hong Kong, El Salvador, and Singapore, among others, have been developing regulatory frameworks in an attempt to lead in this area, America continues to be the dominant force which the world follows.
Promises made by the incoming presidential candidate of a new regulatory regime free of the previous party’s SEC snake, Gary Gensler, is a step in the right direction. Coupled with the introduction of the presidential “Crypto Council” and the transfer of oversight from the SEC to the CFTC alongside potential deregulation, 2025 is shaping up to be very favorable on the policy front.
Goodbye, operation ChokePoint. Regulations passed for crypto in 2025 will be both extremely positive and permanent. Becoming the bedrock that shapes all future regulations and influences how other nations design theirs.
One of the most anticipated knock-on effects of regulatory clarity is the freedom for corporations and governments to enter the crypto game beyond facilitating transfers, trading, and custody.
Starting at the enterprise side of things we have Coinbase. In addition to a nearly 10x growth of their stock price from the bottom, the launch of the Base L2 network and its tremendous success last year highlighted the commercial upside for legacy corporations to build applications, communities, and even chains of their own.
Many entities caught on to this and are following suit, with Robinhood’s Web3 Wallet, Kraken promising its Layer 2 network, and a plethora of others looking for novel ways to get involved.
In addition to this new multi-dimensional form of adoption, there is an increased influx of desire from legacy financial institutions willing to experiment on-chain. Entities including the likes of Franklin Templeton deploying tokenized government bonds, Paypal launching a stablecoin, Bank of America using Ripple ledger for internal transactions, the smorgasbord of issuers creating ETFs (BlackRock, Fidelity, VanEck, et al.), and, of course, MicroStrategy continuing its Chad activities by blasting all the more BTC onto their balance sheets. These are all old news that have set the stage for newcomers. The amount of new capital from globally recognized and reviewed entities vying to get involved is growing exponentially. 2025 will be their year.
Building on the momentum of the expected increase of multi-dimensional participation from corporations in the Web3 space, 2025 is primed to be a year of unification.
Seeing early hints of this in 2024 with the acquisition of stablecoin issuer Bridge by payments giant Stripe and the trilateral fusion of AI crypto projects FETCH, OCEAN, and AGIX into ASI; Mergers and Acquisitions will be broadly applied across the board, on-chain intra-sector Layer 1’s, AI’s, and especially Layer 2’s, as well as off-chain hybrids including wallets and exchanges.
While some entities are plunging headfirst into the development of their own solutions, many others that lack the human resources (intellectual workforce or professional insights) but have the financial capability will attempt to speed up their go-to-markets by acquiring existing projects/products.
What seems to be the most “obvious” area for crypto-native mergers to take place is the Layer 2 space. Over the last 24 months, there has been a Cambrian explosion of L2s coming to market, most with EVM compatibility and most with their own native token. The arrival of all these L2s has shone light on two key byproducts: the unintended techno-economic burden of fragmentation data publishing by flooding the L1s with low-value blocks and questionable appetite for their tokens.
Regardless of what terminology is used, appchain, L2, side-chain, subnet, parachain, etc, the case is clear that performance improvements on the user’s end are needed, but the overwhelm of options makes little sense. The industry can consolidate/bundle these scaling solutions to aggregate liquidity better, reduce communicative overhead by minimizing the amount of cross-chain messaging, and turn its attention to other areas.
This one is a little bit further down the opposite assumption possibility curve, but its implications are profound.
After the launch of Ethereum’s ETF the markets have forever transformed and unlocked the potential for a much broader spectrum of alternative digital assets to enter the fray.
The most apparent contenders next in line for an ETF are SOL, LTC, XRP, and maybe LINK or DOGE. Given how small all of these names are in nominal Market cap terms relative to BTC and ETH, the associated capital inflows, even just the speculation about them, can result in face-melting price action.
Given that some jurisdictions (Brazil) have already launched altcoin ETF products (for Solana) and five major entities in the US (Grayscale, VanEck, 21Shares, Bitwise, and Canary Capital) have submitted their filings for 2025, it seems like the perfect time for the US to deploy its own.
Being the largest, oldest, most reliable and most valuable asset in the crypto verse, Bitcoin’s full economic potential has yet to be tapped. Its dominant designation as a store of value that isn’t subject to the same velocity as typical money makes BTC a truly pristine form of collateral for DEFI.
Layer 2 solutions such as Stacks, Merlin, and Rootstock are looking to extend the Bitcoin network with programmability and compatibility with adjacent networks. Lighting is looking to scale transactional throughput. Babylon is experimenting with a staking adaptation to bring BTC to other networks and generate yield without forfeiting custody and minimizing counterparty risks. Things like ordinals and inscriptions brought a semi-native form of NFTs to Bitcoin and pumped out crazy numbers, which bolstered transaction fees and presented a new vector for strengthening the security budget. The amount of innovation taking place to leverage the security of the Bitcoin network and/or the value of BitCoin’s BTC units has not been receiving the attention it deserves.
Perhaps the most important aspect of the BTC environment is that after his short 16 years of existence, this once-proclaimed worthless pet rock has broken through the fundamentally important, round, psychological price level of $100,000. In doing so, it has unlocked the potential for it to now move through the undiscovered 6-digit area without the public denying such a possibility.
With the maturation of technology, the decreasing relative return potential of BTC, and influence of prominent OG Bitcoiners, 2025 might finally be the year where things come together.
One of the strongest components in the speculation of crypto right now are the government strategic reserves.
Trump has been vocal about his support of the digital economy; after his confirmation of intentions to commit to the creation of the reserves (which he likened to a replication of Oil reserves), absolutely cosmic numbers began floating around. Forbes went so far as to proclaim a 15 Trillion Dollar Boom.
While the world waits for Trump to take office on January 20th, other governments decided to pounce on the opportunity to front-run the US government.
Kicking off the year with Bhutan officially launching its own government strategic reserve for BTC, BNB, and ETH, and rumors of other nations (including Russia, Brazil, Poland and Japan) now considering launching their own to compete with the US, crypto has transcended beyond a critical inflection point and become a serious asset class providing value to the world economy.
The when is now; it's simply a matter of how many governments will take action on this in 2025.
Since COVID, things have just been different.
From transformations of fundamental principles in monetary policies around the world to the impact of AI on human productivity to protectionist de-globalizations superimposing inter-jurisdictional trade friction, the economic logic that has previously been applied to business cycles has been radically disjointed. Data no longer produces the same predictable outcomes; society is beginning to ascribe value in unorthodox manners.
It is more likely than not that interest rates will remain higher than they were in the last 10/15 years, coupled with the realization that workforce distributions in emerging economies will exert pressures that are going to be radically misinterpreted; the crypto markets will experience an even greater level manipulation that it has ever before.
Barting charts, false signals, postponed announcements, and despicable levels of FUD without price impact are to be expected.
Yield curve un-inversion, macro wave five completion (as measured from 2009), power shifts, and the slew of previously mentioned macro factors are indicating that this will be the year to begin exiting.
How and when this happens is anybody’s guess. However, the infinite wisdom of cycles past should constantly keep people on their toes:
“Nobody ever lost money taking a profit”.
There are so many promising breakthroughs in so many niches/segments that to try and speculate on them all into a single thesis would create overwhelm. However, not paying any attention to them could absolve one of different insights into the evolution of the market. So here are five more interesting areas that deserve some consideration moving into 2025:
A lot of progress has been made with fHE & other ZK technologies, yet privacy as a narrative has not received much attention.
Soverngty die-hards uphold this as a fundamental human right.
Corporations and governments combat it under the guise of AML and KYC violations to protect citizens from terrorists, all the meanwhile abusing individual rights and overreaching into people's personal lives. To be “fair” here, some degree of “modular” privacy is being worked on by the likes of USDc to obfuscate the amount of information that hits the public ledger; although, the USDc contract deployers would still be able to harvest this data and in combination with ISP’s locating capabilities render that privacy irrelevant.
2025 could be the moment in time that once again sparks the desire for anonymity/pseudonymity and brings privacy into the limelight.
This one is also a very late signal to exit the markets as likely large sophisticated entities pump privacy for their own needs to clear out funds.
The term “Real World Assets” is somewhat of an oxymoron as it quite literally means the digitization of traditional instruments of value in the form of tokens.
Nevertheless, RWAs are enormous as a sector—so large that they would eclipse the entire value of the crypto industry by about 10–100x.
Surely, this is a slow-growing segment, but after bold statements by the likes of Black Rock’s Larry Fink, where he said the future of all finance is tokenized, it is anyone's guess when exactly but when it does, RWA will go straight verticle.
Also worth mentioning that this is the only sector of crypto with the capacity to flourish in bear markets!
Ending 2024 to the tune of MiCA regulations denouncing dollar-denominated stablecoins in an effort to bolster Euro-based ones and the incessant fudding of Tether, there has never been a more bullish moment for stablecoins as a whole.
From USDt, USDc, DAI and especially Ethena’s USDe; growth in stablecoins will happen unilaterally. Demand for them will arise from the demand for leverage as well as the demand by larger players for exiting their positions.
Being among the best-performing sectors of 2024, Decentralized Physical Infrastructure is a wildcard.
The nature of DePIN positions it as an aggregative category that overlaps a multitude of other sectors, including storage, VPN, and AI, all of which have further implications for tapping alternative applications such as data mapping and IOT, which contribute to the creation of more novel alternative user experiences/applications.
DePIN has a very high beta relationship to all of the other sectors it crosses, thus giving it a high likelihood of continuing to rise faster than the market index.
No prediction would be complete without an acknowledgment of what could go wrong… So, just to shake things up a bit and keep us grounded, let’s not forget that all cycles have a beginning, and all cycles have an end.
Some of the bearish overhangs and headwinds can help identify the cracks before they even show. First and foremost is the relative familiarity with crypto that broader society already has. The social saturation through mainstream media outlets and the rampant idiocracy of TikTok can accelerate the end. Next in line is the extraction of liquidity from the industry via vaporware and scams. Even though social media indicates the satisfaction of the population with Trump in office, ignoring the potential for a recession in the US would be blatantly irresponsible. The fact that many tech giants are stockpiling cash and industry giants like Jeff Bezos have already sold of sizeable portions of their equities should make one question things more deeply. Yield un-inversion is a real thing, a signal that pre-empts economic turbulence by 6–18 months; if they say, “This time it's different,” it might be worth double-checking who they are and what their incentives are.
The long and short of it is if you really want to make the most of 2025 financially and transform the state of financial life through crypto, it is quintessential not to get lost in the sauce.
Knowing when exactly something will happen is having the power of god (or, in the case of politicians, controlling facets of society they have no right to). Nevertheless, sitting on the sidelines while the future unfolds makes a man no greater.
You may no longer be early,
But you are not late.
The Best way to predict the future,
is to build it.
If they call you lucky;
Just smile at them and say yes you are.
See you on the other side anon. 🥂
Andrey Didovskiy
