- Original Article: 8 Predictions For Crypto in 2025
- Author: Paul Veradittakit (Pantera Partner)
- Translator: Zombit
Every year, both the bulls and the bears use short-term events to predict the collapse or explosive growth of the crypto market, but each year these two camps fail to fully hit the mark.
Some notable events this year include: the Dencun upgrade of Ethereum, the US election, crypto ETFs, the DUNA bill in Wyoming, the wBTC controversy, Robinhood's Wells notice, Hyperliquid's nearly $2 billion airdrop, Bitcoin breaking $100,000, and SEC Chairman Gary Gensler announcing his resignation in January.
2024 was a year without major market disruptions. While this year did not see a flood of new capital inflows, it proved that more and more companies in the crypto ecosystem are sustainable. The market capitalization of BTC reached $1.9 trillion, and the total market capitalization of all other cryptocurrencies reached $1.6 trillion. The total crypto market capitalization has doubled since the beginning of 2024.
The diversification of the crypto market has strengthened its resilience to market shocks. Sectors such as payments, Decentralized Finance (DeFi), gaming, Zero Knowledge (ZK), infrastructure, and consumer applications are all seeing continued growth. These sectors now each have their own independent financing ecosystems, markets, incentive mechanisms, and bottleneck issues.
This year, Pantera invested in companies focused on solving these ecosystem-specific problems. Game crypto companies faced challenges in adopting Web3 data analytics tools, so we invested in Helika, a gaming analytics platform. Web3 AI products often face adoption challenges due to the fragmentation of the AI technology stack, so Sahara AI created a comprehensive platform that allows users to contribute without permission while retaining a smooth Web2 user experience.
Intent infrastructure is chaotic, and order flows are highly fragmented, so Everclear standardizes the entire process by connecting all relevant parties. zkVM is complex and difficult to integrate, so Nexus uses a modular approach to meet the needs of customers who only require its high scalability layer. Building consumer applications faces the challenge of attracting users, so we made the largest investment in TON, a blockchain directly connected to Telegram's 950 million monthly active users.
We welcome potential regulatory clarity, continued mainstream attention, and rising crypto prices in 2025. Although the market was slightly sluggish this summer, crypto users are greeting the new year with a strong sense of optimism (or "greed").
Table of Contents
Toggle2024 Prediction Review
Before looking ahead to predictions for 2025, let's review the accuracy of my 2024 predictions. I will rate myself on a scale of 1 to 5, with 1 being the least accurate and 5 being the most accurate.
- The return of BTC and "DeFi Summer 2.0": 4/5 accuracy
- Social token experiences for new consumer use cases: 2/5 accuracy
- Increased "bridges" between traditional finance and DeFi, such as stablecoins and mirrored assets: 5/5 accuracy
- Cross-application of modular blockchains and Zero Knowledge Proofs: 4/5 accuracy
- More computationally intensive applications migrating on-chain, such as AI and DePIN: 2/5 accuracy
- Integration of public chain ecosystems and a "hub-and-spoke" model of application chains: 2/5 accuracy
2025 Predictions
This time, I invited the investment team at Pantera to discuss the predictions together. I've divided the predictions into two categories: continuing trends and new ideas.
Continuing Trends:
- By year-end, RWA (excluding stablecoins) will account for 30% of on-chain TVL (currently 15%)
On-chain RWA grew over 60% this year, reaching $13.7 billion. Currently, about 70% of RWA is private credit, with the remainder mostly coming from US Treasuries and commodities. Inflows into these asset classes are accelerating, and 2025 may see the introduction of more complex RWA.
First, private credit is growing rapidly as the infrastructure continues to improve. Figure nearly dominates the entire market in this space, adding nearly $4 billion in assets this year. As more companies enter this space, private credit is gradually becoming a convenient tool for channeling funds into the crypto market.
Second, there are trillions of dollars in Treasuries and commodities held off-chain. Currently, the value of Treasuries on-chain is only $2.67 billion, but they can generate yield (unlike stablecoins, whose yields are mostly captured by the issuers), making them a more attractive alternative to stablecoins. The BlackRock BUIDL Treasury fund has only $500 million on-chain, while its off-chain government bond holdings are in the tens of billions of dollars. Now, DeFi infrastructure has fully embraced stablecoins and Treasury RWA (integrating them into DeFi liquidity pools, lending markets, etc.), significantly lowering the adoption threshold.
Finally, the scope of RWA has so far been limited to these basic products. The minting and management infrastructure for RWA protocols has been greatly simplified, and operators have a deeper understanding of the risks of on-chain operations and how to address them. Companies specializing in wallet management, minting mechanisms, witch detection, and crypto-native banking have emerged, meaning that it is now possible to bring more complex financial products such as stocks, ETFs, and bonds onto the chain. These trends will accelerate the adoption of RWA towards 2025.
- Bitcoin-Fi
While my prediction for Bitcoin finance last year was accurate, it did not reach the 1-2% level of BTC TVL. This year, due to Bitcoin-native financial protocols (such as Babylon) that do not require cross-chain bridges, high yields, high Bitcoin prices, and increased demand for more BTC-denominated assets (such as Runes, Ordinals, and BRC20), it is expected that 1% of Bitcoin will participate in Bitcoin-Fi.
- Financial technology becomes a gateway to crypto
The reason why TON, Venmo, Paypal, and WhatsApp are growing rapidly in the crypto field is that they maintain neutrality. These platforms allow users to interact with cryptocurrencies, but do not particularly promote specific applications or protocols, becoming a simplified crypto gateway.
For example, Venmo and Paypal each have 500 million payment users, and WhatsApp has 2.95 billion monthly active users. Felix runs on WhatsApp, allowing instant money transfers through messages, and funds can be digitally transferred or withdrawn at partner locations (such as 7-11). Behind the scenes, it uses stablecoins and Bitso on the Stellar network.
In this trend, every fintech company will become a crypto currency portal and may compete with small centralized exchanges in terms of crypto asset holdings.
- NFT revival but more application-oriented
NFTs are no longer just speculative tools, but have become practical tools in on-chain games, AI, identity verification, and consumer applications. For example, Blackbird has integrated NFTs into a restaurant rewards application, providing membership and consumption discounts. Sofamon has created a Web3 version of Bitmoji (NFT wearable items) and collaborated with KOLs and K-pop stars to combat digital counterfeiting.
- Redeposit protocols launched
In 2025, redeposit protocols such as Eigenlayer, Symbiotic, and Karak will officially go live. Although the topic of redeposit has cooled down this year, it is still a multi-billion dollar market.
New ideas
- zkTLS will bring off-chain data on-chain
zkTLS uses zero-knowledge proofs to prove the authenticity of data from the Web2 world. This new technology has not yet been fully realized, but is expected to see breakthroughs this year, bringing new types of data.
For example, zkTLS can be used to prove that data comes from a specific website. Currently, there is no way to do this. This technology leverages advances in trusted execution environments (TEEs) and multi-party computation (MPC), and may be further improved in the future to allow partial data to remain private.
This is a new concept, but we predict that companies will start building this technology and integrating it into on-chain services, such as verifiable oracles for non-financial data or oracles for encrypted secure data.
- Regulatory support
The regulatory environment in the United States has shown signs of being favorable to cryptocurrencies for the first time. 278 pro-crypto House candidates were elected, compared to only 122 anti-crypto candidates. SEC Chairman Gary Gensler, who is anti-cryptocurrency, has announced that he will resign in January. Reports indicate that Trump will nominate Paul Atkins to lead the SEC, who served as an SEC commissioner from 2002-2008 and publicly supported the crypto industry, and also served as an advisor to the Digital Chamber of Commerce.
In addition, Trump appointed technology investor and former PayPal COO David Sacks to the newly created position of "AI and Crypto Czar". Trump stated that David Sacks will "develop a legal framework for the crypto industry, providing the long-needed clarity".
We expect SEC litigation to gradually decrease, clear definitions of crypto asset classes, and tax considerations.
