This article is from | Multicoin Capital
Compiled | Odaily (@OdailyChina)
Translator | Azuma (@azuma_eth)
Editor's Note: Multicoin Capital is perhaps one of the most controversial yet most convincing VCs in the industry.
At the end of 2024, Mike Dudas, founder of 6th Man Ventures and former founder of The Block, revealed that Multicoin Capital has achieved a 18.6x return since the market bottomed out in 2022.
Hasseb Qureshi, a partner at the well-known VC Dragonfly Capital, also gave extremely high praise to Multicoin Capital. Hasseb even hailed Multicoin Capital's co-founder Kyle Samani as the best investor in the cryptocurrency field: "As competitors, Dragonfly and Multicoin are always at odds, but an expert recognizes an expert, investing is like a sport, and Kyle is the all-time leading scorer, unmatched by anyone."
In the following, several partners of Multicoin Capital recount their perspectives on the 2025 narrative, which may conceal the next market-igniting opportunity.
2025 will be a pivotal year for the cryptocurrency industry. The first regulatory framework supporting cryptocurrencies is about to be introduced, and the maturation of Layer 1, DeFi, DePIN, and stablecoins will create fertile ground for the next wave of frontier innovation.
Consistent with our tradition, we will share the ideas and opportunities that most excite us in the coming year.
Narrative One: DePIN Robotics, Zero-Employee Companies
Recommended by: Kyle Samani (Multicoin Capital Co-founder)
DePIN Robotics
There have been rumors that the incoming Trump administration will attempt to push autonomous driving (AD) regulations from the state to the national level, creating a unified standard for AD companies. With GPU clusters exceeding 100,000 H100s, transformer-based autonomous driving will soon be ready for the real world. After that, I expect DePIN-based robotics to experience explosive growth. Many startups have already raised funds from non-crypto VCs, but have not yet truly commercialized. I am optimistic that many of them will adopt the DePIN model, distributing risk from the company's balance sheet to robotics professionals and professional consumers around the world. Many early adopters of these robotic products will capture data critical to developing autonomous robots. To my knowledge, there is currently a company called Frodobots in this field, and I look forward to more companies joining in. Our portfolio company Hivemapper, while not an explicit robotics company, is also exploring similar ideas.
Zero-Employee Companies
The foundation of zero-employee companies is AI. With OpenAI's o3 and other more advanced chain-of-thought reasoning models, AI models are gradually achieving the ability to think, plan, execute, and self-correct. This lays the foundation for AI agents to perform all tasks within a company. For a zero-employee company to function normally, it will certainly require human guidance, as AI will inevitably make mistakes and likely encounter situations beyond its capabilities. However, over time, I expect AI to continuously improve its self-correction capabilities and expand its work scenarios, reducing the degree of human guidance. I believe the governance of these zero-employee companies will likely be implemented through DAOs, and I expect the cryptocurrency capital markets to provide autonomy to those ambitious zero-employee companies.
Startups often succeed where large companies fail, as large companies are always constrained. I believe that zero employees equals zero constraints, which will bring some incredible breakthroughs in actual business operations.
Trend Two: On-Chain Securities
Recommended by: Tushar Jain
With the inauguration of the Trump administration and the Republican sweep of Congress, the time has finally come for on-chain securities to shine.
Transactions on blockchains like Solana can be completed almost instantly, eliminating the waiting times common in traditional finance. Faster capital flow can improve capital efficiency and enable more effective price discovery.
Blockchains can ensure all participants have a real-time, immutable record of transactions. This transparency and security contrasts sharply with the opaque, sometimes risky centralized databases in traditional finance. The transaction costs on blockchain networks are significantly lower than traditional banking systems, as evidenced by the cost of sending stablecoins on Solana (0.001 USD) versus the cost of a bank wire transfer (30 USD). Today, Solana's token programmability can provide the precise granular control needed for tokenized securities, allowing issuers to restrict holders to whitelisted addresses, recall tokens upon court order, and comply with other securities laws or transfer agent requirements.
Undoubtedly, the near-instant finality, low transaction costs, and transparency of blockchains can provide a better settlement mechanism than the slow, expensive, and opaque transaction systems. The only real barrier is the regulatory issue, and a more innovation-friendly SEC can open the door for security token issuance.
I don't think public equity will be the first tokenized security to see mass market adoption. More likely, some less liquid, opaque markets will first benefit from tokenization, such as startup equity. When blockchains can manage your cap table for free, there's no reason to pay Carta or Angelist anymore. Additionally, the first to tokenize may be fixed-income instruments like Figure has been researching for years, or LP interests in funds.
Trend Three: Buy Now, Pay Never, Portfolio Consumption, Portfolio Margin
Recommended by: Spencer Applebaum
Building on Tushar's ideas, when all assets can be programmed and traded on-chain, we will start to see interesting new products emerge. Let me give a few examples.
Buy Now, Pay Never
Affirm and Klarna have popularized the "buy now, pay later" concept, and I'm sure you've seen this feature on Amazon and other merchant sites. Today, on-chain users can earn around 8% on SOL and 15% on stablecoins. What if users didn't have to pay a subscription fee upfront, but instead deposited tokens with merchants (from Web2 companies like Netflix to Web3 companies like Dune Analytics), and the merchants could then earn yield/lending rewards on those tokens over time? The user's tokens would be locked up for a period to guarantee payment. We think there's an interesting consumer psychology game here, where this model may be more palatable to consumers than upfront payments.
Portfolio Consumption
When all assets are tokenized and aggregated in one place (a Web3 wallet), users can use their portfolio to pay for some larger and medium-sized purchases. Imagine Alice has $10,000 in BTC, $10,000 in yield-generating USDC, $10,000 in TSLA stock, and $10,000 in gold. Now she wants to buy a $4,000 couch. Instead of converting USDC to fiat, paying through the bank, and then reversing the process to rebalance her portfolio, a better approach is to sell $1,000 from each of the four assets on-chain and immediately pay the seller. She can still maintain her existing portfolio allocation without worrying about rebalancing.
Portfolio Margin
In 3-5 years, as crypto prime brokers and unified super-protocols emerge, users should be able to use all of their assets as cross-margin. For example, Alice should be able to use her AAPL stock as collateral to short BTC and borrow USDC on-chain; or collateralize her tokenized whiskey and then buy tokenized bonds on-chain. We're starting to see this synthetic approach (e.g. Ostium has brought FX trading on-chain), but this pattern will become clearer as physical assets get tokenized.
Trend 4: Verifying On-Chain State Off-Chain
Recommended by: Shayon Sengupta
Ledgers like Bitcoin and Solana are the "0 to 1" moments of crypto. These systems are fundamentally about money -- they enable value to be stored and transferred globally in a permissionless way. We're now seeing the cryptographic primitives that make these systems possible start to cross-pollinate with non-ledger systems in a way that unlocks entirely new markets. Over the next 12 months, cryptography will become a verification layer for data and computation in three new ways: "web proofs", "privacy-preserving data processing", and "identity/content provenance verification". I see this as a convergence of monetary cryptography and verification cryptography -- the coordinating layer will enable new economic primitives and incentive structures.
zkTLS refers to building zero-knowledge proofs on top of the TLS signatures of webpages, to verify arbitrary data points on the internet (like your Equifax credit score or your Strava activity history) in a completely imperceptible and tamper-proof way. Many teams have already deployed zk proofs on network sessions to build tamper-resistant and fraud-proof applications. Our investments in p2p.me and ZkMe are early examples. p2p.me is an Indian cash access platform that uses web proofs to bypass the fragmented market infrastructure in the region. ZkMe is a sovereign verification system for KYC credentials, allowing apps to verify user identity in a privacy-preserving way. The same underlying principles can extend to dozens of new markets -- ticketing, reservations, and other systems where fraud is a key friction to liquidity.
Secondly, fully homomorphic encryption (FHE) is poised to enter its golden age. As the returns to training AI systems on public datasets diminish, private or confidential environments for late-stage training and fine-tuning will become increasingly critical. This creates an entirely new design space for coordinating access to otherwise inaccessible datasets as model inputs -- especially as a vast trove of valuable enterprise and consumer data continues to migrate from on-premises to cloud systems. At this layer, token-based incentives will be crucial, and breakthroughs in this field will push state-of-the-art foundation models to new levels.
Third, identity and content provenance verification systems will become a fixture in post-AI era consumer applications. As the cost of generating content approaches zero, the proliferation of synthetic content will make proving the authenticity of content and identity a strong requirement. Early systems like Worldcoin, Humanity Protocol, and Humancode use cryptographic proofs of personhood based on biometrics or state-issued credentials, with token incentives as the primary call-to-action to mobilize participants at scale. Similarly, standards like C2PA mark content at the hardware layer to establish provenance and distinguish authentic from AI-generated content, but their widespread adoption at the application layer may require some form of token coordination, as consumer inertia means these tools will play a critical role in addressing the information risk of an AI-saturated consumer internet.
Trend 5: Trading Goes Multiplayer, Full-Stack Media Companies
Recommended by: Eli Qian
Trading Goes Multiplayer
Sharing financial gains and losses, collective speculation is a deeply human and highly viral behavior. People love to talk about how much money they've made (or lost) in stocks, sports betting, memecoins, and more. Yet, most popular crypto, stock, and sports betting trading platforms are designed for individual experiences. Robinhood, FanDuel, BONKBot, and the like don't focus on the collective trading experience. Nevertheless, the demand for "trading + social" is undeniable. Today, users create ephemeral social experiences through online forums and group chats, and much of the content on Crypto Twitter revolves around these discussions.
One of crypto's biggest advantages is permissionless liquidity. It opens the door to building any-to-any crypto asset multiplayer trading tools. By 2025, I'd love to see someone leverage the viral spread properties of "trading social" to create better multiplayer trading experiences. Such a product could let users share their trading outcomes, compete on leaderboards, and "pile in" with a click. The design space for this is vast, from Telegram bots to Twitter Blinks to Discord mini-apps. 2023 and 2024 saw the rise of individual trading tools like BONKBot and BullX, and 2025 will be the year trading goes multiplayer.
Full-Stack Media Companies
There have been many attempts to use tokens to optimize media and content, but few have fully realized their potential. However, we're starting to see the rise of media companies that vertically control content production end-to-end. These "full-stack" media companies have the ability to push crypto's fundamental primitives to a higher level.
Karate Combat is an example. Karate Combat didn't build a product around existing UFC fighters, but built a new fighting league from scratch, giving them more control over the rules, distribution, and athletes. While the token utility for UFC fighters is limited, Karate Combat can let token holders vote on fighter training regimens, match equipment, or anything else -- all possible because Karate Combat controls both the token design and the fighter contracts.
Future live streams, sports leagues, podcasts, and reality TV shows will deeply vertically integrate around content, distribution, tokens, and human capital. I'm excited to invest in and consume media that uses tokens to enable iteration.
Trend 6: The Rise of "Alpha Hunters"
Recommended by: Vishal Kankani
A few key things happened in 2024 that portend some interesting things to come in 2025.
First, anyone can launch a new token for roughly $0 and without permission. This led to an astounding number of token launches in 2024, most of which were meme tokens with half-lives measured in hours.
Second, the market sentiment in 2024 shifted towards "high liquidity, low FDV, fair distribution" token launches -- reminiscent of the 2017 ICO era. In this type of market, CEXes struggle to keep up with the pace of new entrants, and we expect this to accelerate in 2025 (due to their listing processes), driving more liquidity towards DEXes. As a result, over the next year, DEXes will continue to eat into CEX market share. With the explosion of tokens and DEX activity, active traders will need more powerful tools and models to identify emerging tokens, analyze sentiment and on-chain metrics, detect vulnerabilities, manage risk, and execute trades efficiently -- all in real-time.
This brings us to the third thing that happened in 2024: the explosion of AI agents. So far, we've seen AI agents create content on social media to drive attention to their respective tokens. I expect the next generation of AI agents to be "alpha hunters" that can trawl for alpha opportunities and trade autonomously in real-time.
Trend 7: The Institutionalization of Mania
Recommended by: Matt Shapiro
We are just at the beginning of the institutionalization of crypto, which will happen at a dizzying pace.
Over the past 5+ years, the crypto industry has made tremendous strides through major technological advancements, product-market fit, and substantial improvements in UI/UX, but institutional adoption of crypto has stagnated. The combination of regulatory risk and career risk has prevented many financial institutions from effectively entering the space, or even providing the most basic crypto products to their clients. With crypto-friendly governments taking office in the US, and the record-breaking success of BTC ETFs, we are about to see institutions that have been sitting on the sidelines for 5 years now scrambling to catch up and find ways to support crypto as quickly as possible.
In 2024, there was $35 billion in BTC purchase demand, but this demand could not or did not want to be met through Coinbase's purchase of cryptocurrencies. As most asset management firms and major securities firms have not yet fully opened up, in 2025 there will be more US dollars accessing cryptocurrencies. We will see a large number of ETFs launched to meet and explore this demand. This includes not only ETFs for new cryptocurrencies such as SOL, but also ETFs with a variety of cryptocurrencies, as well as other ETFs that combine cryptocurrencies with traditional assets such as gold, stocks or credit. There will also be leveraged ETFs, inverse ETFs, volatility suppressed ETFs, and staking ETFs. Basically, every possible combination of packaging cryptocurrencies for institutional and retail investors will be explored.
We will see major financial companies competing to provide basic financial products around cryptocurrencies. Every financial institution should explore and create product lines that allow customers to trade cryptocurrency products. Financial institutions should seek to custody cryptocurrency assets and lend against these assets, just as they support other traditional assets today. We may also see a significant increase in stablecoin issuers. Any bank that accepts deposits should seek to issue stablecoins. In my conversation with Cuy Sheffield of Visa at the 2024 Multicoin Summit, I mentioned that every company needs to develop a stablecoin strategy. In the past, companies focused on "e-commerce", and now stablecoins will also move in this direction.
These are just the tip of the iceberg, and although this is not the most technologically ambitious part of the cryptocurrency field, the distribution range and scale of funds involved will be huge.
