Author: Paul Veradittakit, Managing Partner of Pantera Capital Source: veradiverdict Translation: Shan Ouba, Golden Finance

Last week, Coindesk released 8 of my predictions for 2025, and I wanted to publish the full version here, including an overview of the year, a review of my predictions for 2024, and predictions for 2025.

Every year, bulls and bears use short-term case studies to predict cryptocurrency destruction or exponential growth. But every year, neither group gets it quite right.

Some major events this year: Ethereum Dencun upgrade, US election, crypto ETF, Wyoming DUNA bill, wBTC controversy, Robinhood receives Wells notice, Hyperliquid recent $2 billion airdrop, Bitcoin breaking through $100,000, and SEC Chairman Gary Gensler announcing that he would resign in January.

There will be no major market shocks in 2024. While it didn’t bring in a ton of new capital, it proved that more and more cryptocurrency companies are sustainable. Bitcoin has a market capitalization of $1.9 trillion, and all other cryptocurrencies combined are worth $1.6 trillion. The total cryptocurrency market capitalization has doubled since the beginning of 2024.

The diversification of the crypto market increases its ability to respond to shocks. Fields such as payments, DeFi, games, ZK, infrastructure, and consumer applications are all growing, and each subfield has its own funding ecosystem, market, incentive mechanism, and bottlenecks.

This year at Pantera, we are investing in companies that address these ecosystem-specific issues.

•Crypto gaming companies are facing difficulties adopting Web3 data analysis tools, so we invested in Helika, a gaming analytics platform.

•Web3 AI products often face promotion challenges due to the fragmentation of AI technology stacks, so Sahara AI aims to create an all-in-one platform that enables permissionless contributions, while maintaining a seamless Web2-like user experience.

• Intent infrastructure was disorganized and order flow fragmented, so Everclear standardized the process by connecting all stakeholders.

•zkVM is complex to integrate, so Nexus takes a modular approach to meet the needs of customers who only need part of the hyperscale tier.

•Consumer applications face problems attracting users, so we made our largest ever investment in TON, a blockchain directly connected to Telegram’s 950 million monthly active users.

In 2025, we will enter the new year driven by possible regulatory clarity, continued mainstream interest, and rising cryptocurrency prices. Even though markets have been slightly subdued this summer, crypto users are heading into the New Year with a strong sense of optimism (or “greed”).

CoinMarketCap’s Fear and Greed Index

Last year, I made a prediction for this year. Here I rate myself with 1 being the least accurate and 5 being the most accurate.

1. The resurgence of Bitcoin and "DeFi Summer 2.0"

Accuracy: 4/5

•In 2023, Bitcoin prices rose from $16,000 in January to a high of $40,000 in December.

•The current price of Bitcoin has exceeded $90,000, and Bitcoin dominance has exceeded 60% this year.

•A Bitcoin DeFi summer has indeed emerged, but defining success depends on specific metrics.

•Less than 1% of Bitcoin is wrapped and used in DeFi, a weak increase compared to last year. Bitcoin ecosystems like Mezo, Stacks, and Merlin build communities, but has struggled with sustained user growth.

•I predicted that Ordinals, inscriptions, and staking might prompt 1% ​​of Bitcoin users to try DeFi, but this prediction did not fully materialize.

However, the launch of Babylon this year, which allows users to lock Bitcoin directly without packaging, has attracted about $2 billion in Bitcoin. The price increase also helped TVL reach $3.549 billion, which is 10 times higher than last year (TVL was about $300 million last year), but still short of my prediction of 1% or about 200,000 Bitcoins (currently worth $19 billion).

2. Tokenized social experience for new consumption scenarios

Accuracy: 2 /5

•If meme coins, prediction markets or gambling applications are not included, then this prediction is basically unsuccessful.

•The definition of tokenized social experiences has evolved this year, with the rise and success of on-chain gaming taking center stage.

•Games based on platforms such as TON (Telegram) and Arbitrum have performed well and have successfully integrated tokenization mechanisms into the games.

•Farcaster's growth (and frames) has plateaued. DePin projects such as Helium, Grass and Blackbird are still in their early stages.

But in terms of new consumption scenarios, there are few results. We invested in Morph, a global consumer layer, hoping it would be a leader in this.

3. The growth of "bridges" between traditional finance and DeFi, such as stablecoins and mirror assets

Accuracy: 5/5

•ETF buying continues to grow, with total Ethereum and Bitcoin ETFs reaching a record $119 billion.

ETH and Bitcoin ETF flows

RWA since the beginning of the year The number of stablecoins has increased by more than 60% to more than 13 billion US dollars, and the number of stable coins has also reached a record high of 192 billion US dollars.

RWA data

Mirrored Assets have become a hot topic, with Ethena, Ondo and M^0 leading the trend of mirrored assets. Like sUSDe The annualized return on assets (APY) is close to 30%.

Protocols such as Morpho and Pendle allow leverage and yield farming on these assets. farming), circular lending, etc.

Superstate and other protocols further strengthen the direct connection between traditional finance (TradFi) and decentralized finance (DeFi). /p>

4. Cross-fusion of modular blockchain and zero-knowledge proof (ZK)

Accurate Degree: 4/5

Zero-knowledge proof (ZK Proof) is an efficient verification or proof method that has been successfully integrated into multiple blockchains and protocols as an infrastructure component.

•Polygon, Conduit and OP Stack now integrate SP1 from Succinct.

•Nexus with QED and Caldera Waiting for the agreement to be reached, but it has not yet experienced explosive growth.

Although there has been progress, it has not yet reached the level of exponential growth.

5. More computing-intensive applications (such as AI and DePIN) are gradually coming to the chain

Accuracy: 2/5

Despite the price increase, in fact, there are very few computing-intensive applications that are actually on-chain.

•A handful of AI projects have yet to gain broad, permissionless market recognition beyond their token value.

: left;">•Helium is one of the few companies that has actually developed a product that is more competitive than the Web2 alternatives

Grass fits this trend to a certain extent, but Overall, the DePIN (decentralized physical infrastructure network) wave has not yet truly arrived.

6. Integration of public chain ecology and application chain (Appchain)" Hub and spoke model”

Accuracy: 2/5

Although some application chains choose the Hub-and-Spoke mode, we observed an interesting Trends:

• Applications choosing to create their own chains, often through Rollup as a Service (RaaS) providers or specific ecosystems (such as Arbitrum Orbit or OP Stack) Build. For example:

•Unichain adopts OP Stack.

•Unichain found that subscribing to a platform with built-in interoperability protocols and other features is cheaper than building your own hub-and-spoke chain is simpler and performs better

On the underlying architecture, many chains may use hub-and-spoke technology in some modules of the stack (such as messaging, propagation, and liquidity aggregation), but they do not adopt the hub-and-spoke pattern as the core design concept of the chain.< /p>2025 Forecast

The opinions expressed in this article are those of the author as of the date of publication and are subject to change. Forecasts are not guarantees of future results <. /p>

This year, I invited Pantera The team of investors will participate in the prediction.Measurements are divided into two categories: rising trends and emerging concepts.

1. Real World Assets (RWA) will account for 30% of the total locked volume (TVL) on the chain (currently 15%)

This year, RWA’s on-chain funds have increased by more than 60%, reaching $13.7 billion. About 70% of RWA is private credit, with most of the remainder being Treasury bills and commodities. Inflows into these categories are accelerating, with more complex RWAs likely to be introduced in 2025.

First, private credit growth is accelerating due to improvements in infrastructure. The numbers account for nearly all of this, with assets set to increase in value by nearly $4 billion by 2024. As more and more companies enter the space, it is becoming increasingly easier to use private credit as a means of moving funds into cryptocurrencies.

Secondly, there are trillions of dollars worth of U.S. Treasury bills and commodities off-chain. With only $2.67 billion worth of U.S. Treasury bills on-chain, their ability to generate yield (as opposed to stablecoins, which allow minters to earn interest) makes them a more attractive alternative to stablecoins. BlackRock’s BUIDL U.S. Treasury Fund only has $500 million on-chain, while it owns tens of billions of dollars in bonds off-chain. Now that DeFi infrastructure has fully embraced stablecoins and U.S. Treasury bill RWAs (integrating them into DeFi pools, lending markets, and perps), the resistance to adopting them has been significantly reduced. The same goes for commodities.

Finally, the scope of RWA is currently limited to these basic products. The infrastructure for creating and maintaining RWA protocols has been significantly simplified, and operators have a better understanding of the risks posed by on-chain operations and appropriate mitigation measures. There are dedicated companies managing wallets, minting mechanisms, witch inductions, crypto neobanks, etc., which means it is eventually possible and feasible to introduce stocks, ETFs, bonds, and other more complex financial products on-chain. These trends will only accelerate the use of RWA until 2025.

2. 1% of Bitcoins will participate in Bitcoin Finance (Bitcoin-Fi)

Last year, my predictions for Bitcoin Finance were more optimistic, but Bitcoin TVL did not reach 1-2% of all Bitcoins.

This year, it is expected that due to native Bitcoin financial protocols (such as Babylon) that do not require cross-chain bridges to be used, high Bitcoin returns, high prices, and increased demand for Bitcoin assets (such as Runes, Ordinals, BRC20) 1% of Bitcoins will participate in Bitcoin finance

3. Financial technology (Fintech) companies will become the entrance to cryptocurrency

TON, Venmo, Paypal, and Whatsapp have all seen the growth of cryptocurrencies due to their neutrality. They are gateways through which users can interact with cryptocurrencies, but do not push specific applications or protocols; in fact, they can Acts as a simplified entry point to cryptocurrencies. They attract different users; TON with its 950 million existing Telegram users, Venmo and Paypal with their 500 million payment users each, and Whatsapp with its 2.95 billion monthly active users. p style="text-align: left;">For example:

•Felix operates on WhatsApp, allowing instant transfers via messages, funds can be transferred digitally or in collaboration Cash withdrawals at partner stores (like 7-11)

•Felix uses stablecoins and Bitso on Stellar

•MetaMask now supports users to pass Venmo buys cryptocurrencies

•Stripe acquires stablecoin company Bridge and Robinhood acquires crypto exchange Bitstamp

Eventually, every fintech company will become a gateway to cryptocurrencies, whether intentionally or by supporting third-party applications. The popularity of fintech will likely be related to the popularity of crypto on small centralized exchanges (CEX) Holdings are comparable.

4. Unichain will become the L2 with the largest trading volume

Uniswap’s current total lock-up volume (TVL) is close to 6.5 billion U.S. dollars, daily trading volume of 1-4 billion U.S. dollars, 5-80,000 transactions. Arbitrum has a daily trading volume of approximately $1.4 billion (a third of which comes from Uniswap), and Base has a daily trading volume of approximately $1.5 billion (a quarter of which comes from Uniswap).

If Unichain can capture half of Uniswap’s transaction volume, it will easily surpass the currently largest L2 and become the king of transaction volume.

5.NFT will usher in a recovery, but mainly in specific application scenarios

NFT Considered a cryptographic tool, not an end in itself. NFTs are increasingly becoming useful tools in on-chain gaming, AI (for model ownership transactions), identity, and consumer applications.

Case:

•Blackbird is a dining rewards app that integrates NFTs into customer identities In the system, Web3 is connected to the catering industry. With NFTs, restaurants can provide consumer behavior data and easily create/mint subscriptions, memberships, and discounts.

•Sofamon develops Web3 BitMagic emoticon package (NFT) to unlock the financial aspect of the emoticon package market. They work with KOLs and K-pop stars to combat digital counterfeiting and reflect the growth in IP value on the chain.

•Story Protocol aims to tokenize global IP assets, with originality at its core. The project recently raised $80 million at a $2.25 billion valuation.

•IWC (Swiss luxury watch brand) launches membership NFT, providing holders with exclusive activities and community access.

NFTs can be used to identify transactions, transfers, ownership, memberships, and can also represent and value assets, allowing for monetization and potential speculative growth. This flexibility gives NFTs great potential, and use cases will only continue to grow in the future.

6. Restaking mainnet launch

2025, Eigenlayer, Symbiotic andRe-staking protocols such as Karak will be officially launched on the main network, and operators will earn income through AVS (active verification service) and punishment mechanism (slashing). However, the popularity of re-hypothecation seems to have waned this year.

Restaking’s influence grows as more and more networks use it. If a protocol uses the infrastructure supported by a certain restaking protocol, it can derive value from this connection even if there is no direct connection. Therefore, even if some protocols lose traction, they may still have huge valuations.

We believe that re-staking is still a multi-billion dollar market, and as more and more applications become Appchains, they will take advantage of Re-hypothecation agreement or other agreement built on the re-hypothecation agreement.

7.zkTLS: Introducing off-chain data onto the chain

zkTLS uses zero Knowledge proof (ZK Proof) to verify the data validity in the Web2 world. This new technology isn’t quite here yet, but it’s expected to introduce new types of data when it does (hopefully) this year.

For example, zkTLS can be used to prove that certain data actually comes from a specific website. Currently, there is no way to verify this. This technology leverages advances in Trusted Execution Environments (TEE) and Multi-Party Computation (MPC), and may be further improved in the future to allow some data to remain private.

Although zkTLS is still in the conceptual stage, we predict that companies will begin to develop and integrate it into on-chain services, such as:

• Cryptographically secure data oracles,< /p>

Provide a trustworthy external data source for on-chain applications.

8. Regulatory support

For the first time, the U.S. regulatory environment has shown a positive attitude towards cryptocurrency. In the latest election, 278 pro-cryptocurrency House candidates were elected, compared to just 122 anti-crypto candidates. Anti-crypto SEC Chairman Gary Gensler announced that he willResigned in January. Trump reportedly plans to nominate Paul Atkins to lead the SEC. Atkins, who served as an SEC commissioner from 2002-2008, is a public supporter of the crypto industry and an advisor to the Chamber of Digital Commerce. The agency is dedicated to promoting the legalization and popularization of cryptocurrencies.

Trump also appointed technology investor, former CEO of Yammer and former COO of PayPal David Sacks as the newly created "AI & Cryptocurrency Affairs Director" Czar" position. In Trump's statement, he mentioned: "David Sacks will work to develop a legal framework to provide the crypto industry with the clarity that the industry has long demanded."

We expect to see: A gradual reduction in SEC litigation, a clear definition of cryptocurrencies as a specific asset class, and further clarification on taxation.

2025 may become an important turning point in the development of the U.S. cryptocurrency industry.