Author: @Web3_Mario
Thank you all for your support over the past year. I apologize for the late arrival of my year-end summary, as I was delayed in handling some matters. I've given a lot of thought to which perspectives I should use to share my insights from the past year, and ultimately decided that sharing the perspective of an ordinary Web3 entrepreneur still in the trenches would be the most authentic. Overall, looking back on 2024 and ahead to 2025, I believe four phrases can aptly summarize the landscape: from grassroots to universal, from chaos to order, from recession to bubble, and from conservatism to revolution. In the following, I will share some of my thoughts and outlook using what I consider to be representative events.
From Grassroots to Universal: The Approval of the BTC Spot ETF Ushered in the Universalization of Crypto Assets
Reflecting on 2024, I believe the most extraordinary transformation the crypto world has experienced is the upgrade from a niche subculture group to a universally valuable asset class. This journey can be traced back to two landmark events: first, the approval of the BTC spot ETF on January 10, 2024, after a three-month battle; second, the successful election of the crypto-friendly Trump as the 47th US President on November 6, 2024. These two events can be seen in the corresponding BTC price movements, with the former driving BTC from the $30,000 range to $60,000, and the latter contributing greatly to the surge from $60,000 to $100,000.
The most direct impact of this transformation is on liquidity. The increased liquidity naturally benefits the performance of risk assets, but the process and motivation of attracting liquidity differ from the 2021 bull market. Reflecting on the 2021 crypto bull run, the core driving force was the decentralized nature of crypto assets, which enabled higher capital efficiency in capturing the excess liquidity from the Biden administration's $1.9 trillion economic stimulus package.
However, in the current bull market starting in 2024, the transmission process has undergone a transformation. The "influential capital" attracted during the 2021 bull market, along with the newly formed vested interest groups, are actively exerting greater political influence, not limited to the many crypto lobbying groups and massive political donations. I have previously analyzed this in depth in my article on the value of World Liberty Financial: A new choice under Trump's campaign funding disadvantage.
The most direct impact of this is that the universal value of cryptocurrencies can now be efficiently promoted through political means. As a result, the discourse on the value of crypto assets is evolving, with more traditional elites and mainstream media now self-identifying as "crypto-friendly." This transformation from "grassroots" to "universal" has also profoundly influenced the motivation for attracting liquidity. In addition to speculation, terms like "store of value" and "inflation hedge" have crept into the BTC buying rationale, which will reduce the cyclicality and volatility associated with the speculative nature of crypto assets and provide more solid value support. Of course, only a few blue-chip assets like BTC are currently benefiting from this positive change, but the multiplier effect will benefit the entire crypto market to varying degrees. A visual illustration of this transformation may be more intuitive.
In addition to the impact on the upper echelons, this evolution has also brought about a significant positive mental shift for many practitioners like myself. A tangible example is that when non-industry acquaintances inquire about your work, you no longer have to nervously explain that you are not a criminal or a speculator, but can proudly introduce your profession or business. This mental shift will also make the inflow of talent more positive, as the frictions in processes like startup partnerships, talent recruitment, and traditional industry collaborations will be greatly reduced. Therefore, I am full of confidence in the future development of the industry.
Finally, I would like to mention some perspectives on the narrative path. By mid-2025, the discussion around the value of BTC as a representative crypto asset will be more positive. As analyzed in previous articles, this refers to BTC's store of value and its role as the core of stock market growth, replacing AI. Therefore, it is necessary to be sensitive to relevant information, which may include the following aspects:
l Progress on national, regional, organizational, and corporate-level Bitcoin reserve-related legislation;
l Statements or views expressed by key figures with political influence;
l The allocation of BTC on the balance sheets of US-listed companies.
From Chaos to Order: The Global Sovereign States' Crypto Industry Regulatory Framework Will Be Further Improved, Providing a Basis for Web3 Business Scenarios to Break Through
My second observation path is "from chaos to order." We know that for a long time, a core narrative in the crypto industry has been the anti-censorship capability brought by decentralization and anonymity. You can find similar arguments in the majority of Web3 applications in the previous cycle, and this has made an important contribution to establishing the value proposition for the Web3 industry in its early stages, but it has also caused considerable harm to the industry, such as fraud and money laundering.
However, I believe the industry's development will iterate in this direction. It's not about completely abandoning Web3 fundamentalism, but from a pragmatic perspective, the current crypto industry will undergo a transformation from chaos to order, and this transformation will come with the further improvement of the global sovereign states' crypto industry regulatory framework. We know that the transition of the SEC chair Gary Gensler in 2024 was a focus of attention among the "crypto regulatory hotspots." Under Gensler's leadership, the SEC has sued a large number of US crypto companies, such as Ripple and ConsenSys, causing bottlenecks in their business development and expansion. In my previous article on the improvement of the regulatory environment, I clearly analyzed the progress in this direction using Lido as an example.
However, with Trump's inauguration and his deregulatory policy preferences, coupled with Gary Gensler's transition, a more lenient and inclusive, crypto-friendly regulatory framework is worth anticipating. Recent developments in related cases, such as Ripple and Tornado Cash, suggest that this framework will not be too far away.
The most direct benefit of this change is that it will provide a basis for Web3 business scenarios to break through without bearing significant legal risks. In 2025, I will pay close attention to the progress of such events, and everyone should also be sensitive to information such as the outcomes of other litigation cases, the introduction and advancement of relevant legislation, changes in SEC personnel appointments, and the statements and views of key decision-makers. As for potential breakthrough business scenarios, I am particularly interested in two aspects:
Here is the English translation of the text, with the specified terms preserved:l Ce-DeFi Scenario: Connecting traditional financial instruments with on-chain tools such as crypto assets to solve for capital efficiency and reduce transaction friction costs. The flow of funds can be divided into two main categories: one from the traditional financial world to on-chain crypto assets, such as MicroStrategy's financial innovation; the other from on-chain crypto assets to the traditional financial world, specifically referring to bond-based RWA, on-chain financing channels like Usual Money, and the TradeFi domain of stablecoins.
l DAO Scenarios in Offline Business Management: This direction is a bit off the cuff. Due to the relaxation of crypto-related regulatory measures under the Trump administration, and the boost in domestic demand from the "America First" policy, there may be more offline-oriented organizations or companies choosing to adopt the DAO model for internal governance to access cheaper financial services. For example, someone wanting to open a Chinese restaurant could choose to operate it through a DAO and integrate a stablecoin-based payment system, with all cash flows being transparent. If regulations are further relaxed, the company's financing and dividend distribution can also be handled through the DAO.
From Recession to Bubble: The Focus of Traditional Web3 Business Development on Three Axes - More Innovative Grand Narratives, More Robust Business Revenue, and More Balanced Profit-Sharing Models
The third observation path of the author is "from recession to bubble". We know that in the middle of 2024, the traditional Web3 business hotspot has undergone a relatively large transformation, from the LRT market represented by EigenLayer in the first half of the year, which mainly exhibited the characteristics of an industry recession. Due to the lack of widespread profitability, in the context of stock competition, capital has formed a warm cluster, choosing to gather in the relatively few potential large-scale Infra sectors, using time to exchange space, by inflating valuations and coupling with "point strategies" to avoid dilution of equity, thus exploiting users, which has been analyzed in the author's previous article 《Web3 Oligarchs Are Exploiting Users: From Tokenomics to Pointomics》.
However, with the improvement of the market environment in the middle of the year, and the unsatisfactory price performance of the LRT sector tokens, the hotspot has gradually transitioned to the application layer represented by TON Mini App. Compared to Infra, the application layer, with more target options, lower development costs, shorter landing cycles, and more controllable iterative benefits, has been favored by capital. At this point, the market has quickly emerged from the gloom of the recession.
Entering the second half of the year, with the Federal Reserve entering a rate-cutting cycle and the FUD around VC coins, the traditional capital exit path has been disrupted, and the market has quickly entered a bubble, with capital chasing Meme coins with shorter exit cycles to pursue higher capital turnover rates. In addition to Meme coins themselves, platforms like Pumpfun representing launch pads, as well as tools with updated narratives such as AI Agents, are also being pursued by the market.
Looking ahead to the next year, the author believes that traditional Web3 business will develop according to the bubble cycle:
l More Innovative Grand Narratives: We know that capital likes to chase high-growth tracks, the core reason being the huge imagination potential and tolerance for current delivery, allowing the valuation bubble to be inflated even further. It is also easier to attract market traders and new capital to enter, making it easier for investors to exit through the secondary market at the right time. Therefore, regardless of whether a certain track is recognized for its long-term value, as long as it is logical, it can become a target for capital to speculate on during the bull market bubble period, and from the perspective of pursuing capital gains, everyone should maintain sensitivity.
l More Robust Business Revenue: For some tracks that have gone through a round of iteration, the valuation model will return to a reasonable range, and the pursuit of real revenue will become the main theme of industry iteration, which puts forward higher requirements for the extraction of commercially viable demand. But if a certain scenario can be truly explored, the market potential will be limitless. Here, the DeFi track or the Ce-DeFi track is specifically mentioned, and the author is particularly interested in the interest rate trading market and welcomes fellow partners with similar ideas to discuss with the author.
l More Balanced Profit-Sharing Models: We know that the current traditional VC coins are suffering from FUD, and the more pressing issue is that the current traditional financing model has led to a prisoner's dilemma between project parties, first-round VCs, and secondary market investors, with each prisoner thinking the other may betray, and thus choosing to betray (to ensure their own release or reduced punishment). Therefore, in the new environment, whether a better model can be found is also worth attention, and the author believes that HyperLiquid may have discovered some of the secrets, which is also a focus of the author's future research.
From Conservative to Revolutionary: The Rare Opportunity for Risk Asset Escape Caused by Extreme Uncertainty
The author's fourth observation path is "from conservative to revolutionary". It needs to be explained that the conservatism and revolution here are both neutral words, where conservatism means conforming to existing rules, while revolution means breaking them. The main theme of 2025 will definitely be the great changes in the economic and cultural fields triggered by political changes, a process full of the collapse of the old order and the resulting uncertainty. For example, the uncertainty of the US-China government debt crisis, the uncertainty of monetary policies in various countries, the uncertainty of changes in mainstream social values, and the uncertainty of international relations.
And the result of these uncertainties is the huge volatility of the risk market. Of course, if the sector rotation makes the industry in a positive driving state, this volatility will be a good thing, otherwise it will be the opposite. A recent news item has also sparked the author's interest in this direction, which is that the FTX restructuring plan will take effect on January 3 and will allow users to start receiving repayments.
We know that in the previous cycle, the mainstream political spectrum in the tech industry was still relatively biased towards the Democratic Party, so it is believed that many of the big shots who entered the market in the last bull run will not fare well after Trump's return. Therefore, it is understandable to use the window period before his formal inauguration to hype up the relevant prices as much as possible, and to hedge their own holdings of risk assets, triggering an escape. Here, a little conspiracy theory can be added, that some Deep State capital has suffered huge losses due to the FTX bankruptcy and the collapse of the crypto industry, and therefore, at the cost of using various political means, they have pushed the prices of crypto assets to an exaggerated level, allowing some already dilapidated balance sheets to be resurrected and avoiding their own losses.
From the FTX case, the author has also gained some insights, and is therefore quite interested in the development of the NFT track in 2025, as it seems to have some similarities with the FTX case, and combined with the new speculative narratives such as AI Agents, a second spring for the NFT market is not impossible.
