Author: everstake
Translation: Plain Language Blockchain
The blockchain world is becoming increasingly hot as it moves towards 2025! Institutional adoption is booming, innovation is thriving, and regulation is finally starting to catch up. At the same time, the launch of the spot Bitcoin ETF has become a game-changer, restoring market liquidity and confidence.
Our research team has analyzed the most impactful developments of 2024 and provided a comprehensive overview, revealing how these trends are shaping the industry. From the rise of liquidity staking and Layer 2 solutions, to the evolution of stablecoins and their growing importance in global finance, we will delve into the key events that are paving the way for 2025.
TL;DR
2024 was a transformative year for blockchain, laying the foundation for even greater developments in 2025. Institutional adoption has soared, regulation has become clearer, and groundbreaking innovations have reshaped the crypto landscape. Looking ahead, what trends will the blockchain world see in 2025?
Bitcoin ETF Leads the Charge: The spot Bitcoin ETF has become a major holder of Bitcoin, attracting institutional interest and redefining the narrative in the financial realm.
Ethereum Scaling Upgrades: Layer 2 solutions and the Dencun upgrade are significantly reducing costs, with over 200 projects exploring Zero-Knowledge (ZK) Rollups.
Liquidity Staking Frenzy: Protocols like EigenLayer and Babylon are redefining network security and efficiency, and the reStaking ecosystem is expected to grow rapidly.
Real-World Assets on Blockchain: The tokenization of real estate, bonds, and commodities is accelerating, bridging the gap between traditional finance and cryptocurrencies.
Solana's Resurgence: Private funding has hit new highs, user activity has surged, and the Solana network has solidified its market position through meme coin trading and NFT innovation.
AI and Blockchain Convergence: The combination of AI and blockchain is transforming data integrity, decentralized computing, and user experiences in finance and beyond.
Decentralized Physical Infrastructure and Storage: Infrastructure solutions are addressing real-world needs, improving efficiency, security, and energy optimization.
Seamless Cross-Chain Interoperability: Cross-chain interoperability has become the norm, with innovations like the Particle Network simplifying blockchain interactions.
DeFi Revival: With lower Ethereum fees and enhanced financial products, DeFi is becoming more accessible, ushering in the next wave of decentralized finance.
Global Regulatory Progress: The EU, UK, and Asia-Pacific are developing crypto-friendly regulatory frameworks, while the US anticipates potential positive changes under new leadership.
2025 will be a year of transformation, but before we look ahead to the upcoming trends, we first want to showcase how this year has taken us to new heights.
1. The 2024 Journey: From Recovery to Innovation
2024 was a pivotal year for the crypto industry, laying the groundwork for new growth and innovation. Following the mid-2023 bull market, the approval of the spot Bitcoin ETF in January 2024 was a watershed moment, restoring institutional confidence and market liquidity.
Let's dive deeper into the key highlights that defined this transformative year.
1) The Impact of the Bitcoin ETF
The launch and rapid adoption of the spot Bitcoin ETF became a game-changer in 2024. These financial products have made ETFs one of the largest holders of Bitcoin, collectively holding around 4.5% of the circulating supply. This surge in institutional interest has further solidified Bitcoin's reputation as a valuable and viable financial asset.
Notably, Bitcoin's growth has even sparked political discussions in the US, with some suggesting that Bitcoin could help address the $35 trillion national debt. While the actual feasibility of this proposal remains questionable due to the rapid accumulation of debt, it highlights Bitcoin's growing influence in mainstream economic discourse.
2) Progress and Challenges
In 2024, regulation saw substantial upgrades, paving the way for institutional adoption.
United States: With the anticipation of a more crypto-friendly policy under the 2025 new administration, the market has become increasingly optimistic. However, 2024 itself laid important groundwork for this transition. Discussions have focused on strategic Bitcoin reserves and stablecoin regulation, with stablecoin issuers becoming key players in the US financial system. Holding $125 billion in US Treasuries, they have become the 18th largest holder of US debt, highlighting the growing integration of digital assets and the traditional financial system.
European Union and United Kingdom: The EU and UK have taken the lead in developing regulatory frameworks for stablecoins and staking services. These initiatives underscored their commitment to fostering innovation while maintaining financial stability, solidifying their position as leaders in providing a structured, business-friendly environment for the crypto market.
Despite the significant progress, the industry still faces formidable challenges, including scalability issues, institutional exit liquidity, and global policy fragmentation.
3) The Rise of Liquidity Staking and reStaking
In 2024, liquidity staking and reStaking saw unprecedented growth. Protocols like EigenLayer, Symbiotic, Karak, and Babylon enabled validators to secure multiple networks simultaneously, improving efficiency and security.
The reStaking ecosystem is rapidly expanding, with an expected 400 Active Validator Services (AVS) by the end of 2025. However, many of these protocols are still in development and face key challenges, such as effective validator coordination and aligning actual user interests, which require further solutions.
4) Layer 2 Solutions
Layer 2 (L2) solutions have continued to thrive, providing scalable and efficient transaction processing for Ethereum. The Dencun upgrade has significantly reduced transaction costs, driving L2 adoption.
However, the high cost of Zero-Knowledge (ZK) proof generation has become a bottleneck, requiring innovative solutions to enable wider application. Currently, over 200 projects are actively developing ZK technology, emphasizing its crucial role in blockchain scalability.
5) Ethereum: Staking Goes Mainstream
Since Ethereum's transition to Proof-of-Stake (PoS), staking has seen rapid growth:
ETH Staked: From 14 million to 35 million, a 2.5x increase.
Validators: From 400,000 to over 1.1 million, more than a 2.5x growth.
As the crypto industry matures, staking has become a key strategy for institutional investors. Currently, around 28.38% of the total Ethereum supply (or 34.2 million ETH) is staked through over 1.1 million on-chain validators.
Institutional staking participation reached new heights in 2024, with 70% of Ethereum-holding institutions engaging in staking. Notably, over half of them chose liquidity staking solutions, reflecting the growing demand for flexible and yield-generating opportunities.
6) Solana: A Year of Growth
Solana had an impressive performance in 2024! Third-quarter private funding reached $173 million, with $103 million raised just in September. Major players like Hamilton Lane, Franklin Templeton, and BlackRock have participated in Solana's tokenized assets.
Active Addresses: Reached 7 million in November 2024, driven by the meme coin and NFT hype.
Here is the English translation of the text, with the specified terms translated as instructed:Low Fees, High Transaction Volume: The transaction fees reached $260 million within six months, with a transaction fee of only $0.02 per transaction.
In 2024, the activity of Decentralized Exchange (DEX) platforms surged, mainly driven by memecoins trading:
Q1 2024: Trading activity reached its peak.
Q4 2024: Activity saw a rebound.
Solana's Stablecoin Market Cap: Reached $3.8 billion, ranking fifth among all blockchain networks.
reStaking gained attention in the Solana ecosystem:
Jito is about to launch its reStaking platform, with a current Total Value Locked (TVL) of $50 million, covering three LRT protocols.
Solayer has gone live, with a TVL of around $390 million.
7) The Rise of the Asia-Pacific Region
The Asia-Pacific region is becoming a cornerstone of crypto development, thanks to its strong developer and investor communities. The region's blockchain adoption rate has surged, with Solana alone accounting for 100 million of the 220 million active blockchain addresses globally as of September 2024.
Projects in the region often customize their products based on local preferences, making flexibility and market research key to success.
2. Investment Landscape in 2024
In 2024, investment activity in the global crypto market increased significantly. The approval of Bitcoin and Ethereum spot ETFs provided the much-needed liquidity to the market and re-established market confidence. This fostered a closer connection between the primary and secondary markets, driving investor participation.
The financing trends in the first three quarters of 2024 reflected this revived optimism:
Q1 2024: Fundraising amount was $2.545 billion, an increase of 0.76% year-over-year.
Q2 2024: Investment rose to $2.75 billion, an 8.05% increase from the first quarter.
Q3 2024: Financing slightly declined to $2.406 billion, a 13% decrease from the second quarter.
Despite these fluctuations, the market demonstrated resilience, with an annual growth rate of 26.05%. This indicates that while short-term volatility persists, long-term confidence remains strong.
1) Top Venture Capital Firms
Leading venture capital firms in the crypto industry have played a crucial role in supporting innovation. Heavyweight firms like a16z, BN Labs, and Polychain have been at the forefront of the industry by backing projects in emerging areas such as Real-World Assets (RWA), Decentralized Finance (DeFi), privacy protocols, and cross-chain interoperability.
These firms not only provide financial support to projects but also actively drive innovation and influence the direction of the industry. Their strategic investments are likely to shape the trends we see in 2025, as they continue to identify and support the most promising technologies.
2) The Fourth Wave of Web3 Innovation
The crypto industry is experiencing the so-called fourth wave of Web3 innovation. The rise of non-EVM Memecoins, BRC20, AIGC, and Real-World Asset (RWA) assets mark the arrival of this wave.
Widespread application adoption has progressed slowly, preventing the primary market from reaching the heights of Bitcoin's performance. The key to growth lies in identifying assets that can attract both investors and retail users, as the latter are the primary drivers of capital inflow.
The trading structure of the crypto investment market reveals several key trends:
Over 54.9% of institutions remain inactive, indicating a cautious approach amid market uncertainties.
Only 12% of projects successfully secured two or more rounds of funding, highlighting the challenge of obtaining sustained financial support.
The average amount per funding round increased slightly by 0.62% (to $53,139) compared to 2023, reflecting a stagnation in capital inflow growth.
Despite these challenges, the primary market exhibits a clear "head-of-the-curve" effect, with most institutional investors opting to remain on the sidelines, waiting for clearer market signals or the emergence of more innovative projects before making significant investments.
3) Key Investment Highlights
In 2024, the crypto industry saw 1,459 financing events:
1 Funding Round: 1,283 projects.
2 Funding Rounds: 149 projects.
3 or More Funding Rounds: 27 projects.
Compared to the 2021-2022 period, these numbers declined by 27.7% to 30%. However, compared to 2022-2023, this trend showed positive growth, increasing by 7.6% to 86.3%.
The areas that received the most funding were:
Infrastructure Solutions: Raised over $4.2 billion.
Decentralized Finance (DeFi): Attracted over $1.4 billion in investments.
4) Leading Ecosystems and Projects
Multiple blockchain ecosystems performed exceptionally well in 2024:
Ethereum: Continued to dominate the market, with 2,562 active projects.
Solana: Strongly recovered from the FTX collapse, hosting 823 projects.
Bitcoin Ecosystem: Gained momentum with the emergence of 383 projects.
TON (Telegram Open Network): Demonstrated growth, with 141 projects.
Base: As the fastest-growing Layer 2 solution, launched 428 projects with a TVL of $3.6 billion.
These ecosystems reflect the diversity and evolving nature of blockchain development, with each ecosystem having its unique strengths and growth trajectories.
5) Notable Funding Rounds and Trends
In 2024, several significant financing transactions highlighted investors' confidence in the crypto industry:
Monad: Raised $225 million in April 2024, with a project valuation of $3 billion.
Celestia: Secured a $100 million funding round through an Over-the-Counter (OTC) transaction in September 2024.
These large-scale investments underscore a trend: infrastructure projects and innovative blockchain solutions continue to attract significant capital.
3. Outlook for 2025
A survey conducted by CoinFund provides insights into the ambitious plans of crypto companies for 2025. The survey shows that 70.5% of companies plan to raise funds, with 20.5% targeting fundraising of over $25 million, indicating that the industry is entering a phase of construction and expansion.
Key Highlights:
Nearly 79.5% of companies plan to expand their teams, focusing on hiring for product and engineering roles (88.6%), followed by business development and sales (82.9%).
Consumer applications, Decentralized Finance (DeFi), Web 3.0 adaptation, and Real-World Assets (RWA) are expected to lead the expansion of Web3 in 2025.
77.2% of founders believe that the crypto industry will launch a breakthrough application by 2025, with the most attention-grabbing areas including gaming, payments, and decentralized finance (DeFi).
This optimistic outlook underscores the transformative year ahead for the Web3 industry, which may redefine the industry landscape through disruptive innovation and strategic expansion.
4. 12 Crypto Trends to Watch in 2025
The crypto world is evolving rapidly, and keeping up with the latest trends is crucial to maintaining a leading position. As 2025 approaches, our expert R&D team led by Anna Petrenko has identified several exciting trends worth watching.
While areas like solutions, GameFi, and s may face challenges due to stagnation, other domains will see bright prospects. Let's explore the key areas that will shape next year's trends!
1) Bitcoin Ecosystem: The Rise of Staking and Liquid Staking
remains the cornerstone of the crypto market, and its ecosystem is continuously expanding through pioneering advancements:
ing : The launch of the Babylon introduced ing for holders, allowing them to earn additional rewards. Although still in the early stages, the first Babylon rewards are expected in Q1 2025.
Liquid ing: Emerging protocols enable holders to participate in and connect with other blockchain networks.
While the ing space for shows promising growth potential, many projects are still in development, indicating significant potential in this area by 2025.
2) Crypto-Traditional Finance Convergence: Fusion and Integration
The boundaries between traditional finance (TradFi) and decentralized finance (DeFi) are blurring. In 2025, more financial institutions are expected to incorporate crypto services, such as:
Crypto Custody: Banks providing secure storage for digital assets.
Crypto-Backed Lending: Providing loans collateralized by crypto assets.
ing Services: Offering institutional-grade ing services for institutional clients.
Visa and Mastercard have already started integrating crypto solutions, and this trend is set to accelerate. This convergence will make cryptocurrencies more accessible and seamlessly integrated into everyday financial activities.
3) Real-World Assets: Unlocking the Value of the Physical World
The tokenization of Real-World Assets (RWAs) is expected to become a dominant theme in 2025. Key drivers include:
Increased Adoption: Traditional financial institutions are exploring blockchain solutions to tokenize real estate, bonds, and commodities.
Regulatory Clarity: More robust regulations in major markets will attract institutional capital and enhance trust in RWAs.
With the growing interest of institutional investors and alignment with DeFi, RWAs are poised to transform the way we access and manage real-world value in the digital economy.
4) Fully Homomorphic Encryption (FHE): The Future of Confidential Computing
FHE, as a pioneering trend in confidential computing, is gaining attention. This technology enables direct computation on encrypted data, ensuring:
Privacy: Data remains encrypted throughout the entire process.
Security: Sensitive information is never exposed.
While similar to zero-knowledge proofs (zk), FHE offers unique functionalities that are crucial for widespread crypto adoption. By 2025, it is expected that more blockchain projects based on FHE will address real-world use cases and enhance privacy workflows.
5) AI and Crypto: A Perfect Match
AI became a focal point in 2024, accounting for 35% of US startup investments (Crunchbase). The convergence of AI and blockchain is solving major challenges. Here's how blockchain is enabling AI development:
Data Integrity: Ensuring the authenticity and tamper-resistance of data used to train AI.
Decentralized Storage: Providing a secure, low-cost alternative to centralized storage.
Decentralized AI Computation: Leveraging idle computing power to reduce costs.
As AI deeply integrates with DeFi, cybersecurity, and data privacy, the fusion of AI and crypto will drive the creation of new opportunities and solve existing challenges.
2025 will be a pivotal year for the crypto industry's transformation. From the expansion of the ecosystem and the tokenization of Real-World Assets to the convergence of AI and blockchain, these trends will reshape the market landscape.
6) DePIN: Physical and Digital Infrastructure
Decentralized Physical Infrastructure Networks (DePIN) leverage blockchain technology to create decentralized solutions for real-world applications. Despite facing regulatory hurdles and competition from Web2 companies, DePIN is gaining momentum:
In 2024, it received $568 million in funding support, and the market capitalization of over 1,500 projects exceeded $50 billion.
A. AI-Driven Projects:
In 2024, nearly half of the top-funded DePIN projects focused on artificial intelligence.
B. Global Hubs:
The US leads DePIN innovation, followed by Singapore and the UK.
C. DePIN: Addressing Growing Infrastructure Needs, Providing Robust Solutions for the Digital Economy
Decentralized Storage: Secure, Efficient, and Resilient
Centralized storage faces increasingly severe threats, with over 1 billion records breached in 2024 alone. Decentralized storage provides a resilient alternative:
No Single Point of Failure: Data is replicated across multiple nodes, reducing the risk of network attacks.
Energy Efficiency: Distributed storage consumes less energy compared to centralized data centers.
Advanced Security: Technologies like Multi-Party Computation (MPC) and Zero-Knowledge Proofs (ZKP) enhance data protection.
Innovative Dynamic Sharding: Real-time adjustment of data distribution to optimize performance and reduce the risk of data loss.
PayFi: Instant, Programmable Finance
Solana's PayFi enables instant settlement and automated payments through smart contracts. By leveraging RWAs and DeFi, PayFi allows users to:
Use income from lending protocols to pay for daily expenses.
Optimize capital utilization while protecting their primary assets. PayFi has the potential to revolutionize cross-border payments, DeFi applications, and real-world financial flows.
SocialFi: Monetizing Social Interactions
SocialFi combines social media with DeFi, allowing users to earn rewards through online activities. With a familiar Web2-like interface, SocialFi platforms provide a smooth transition to Web3.
Challenges include creating sustainable economic models and handling high transaction volumes, but advancements in decentralized infrastructure may drive its adoption.
Privacy and Verification: The Rise of ZKP
Privacy tools, such as Zero-Knowledge Proofs (ZKP), are becoming increasingly important in blockchain applications like payments, identity verification, and governance.
ZKP can verify data without revealing sensitive information, balancing transparency and confidentiality.
Cross-Chain Interoperability and Chain Abstraction
Seamless blockchain interoperability is becoming increasingly important. Projects like Particle Network provide account-level chain abstraction, allowing users to unify their account balances across multiple chains without the need for bridges. This innovation simplifies the user experience and supports the development of cross-chain applications.
DeFi revival and pre-confirmation
With the decline in Ethereum fees and changes in market conditions, DeFi is expected to regain momentum. Improved accessibility and emerging use cases will drive the next wave of decentralized finance services.
Pre-confirmation protocols, such as Primev, Luban, and Bolt, provide guaranteed transaction inclusion and MEV protection. These innovations bring increased transaction speed and security for traders and decentralized applications (dApps), while also achieving decentralization of block production.
5. Conclusion: Outlook for 2025
2025 will be a pivotal year for blockchain technology, driven by technological innovation, regulatory clarity, and institutional adoption. Analysis shows that 2024 saw several important developments, such as the rapid proliferation of Bitcoin ETFs, the expansion of Layer 2 solutions, and the growing role of stablecoins as a core component of the global financial system.
New frontier areas, such as decentralized physical infrastructure networks (DePIN), tokenization of real-world assets (RWA), and DeAI, are expected to transform the landscape. The convergence of artificial intelligence and blockchain holds the promise of enhancing scalability, security, and user experience, paving the way for mass adoption.
The European Union, the UK, and the Asia-Pacific region are leading in driving regulatory progress, boosting investor confidence. Meanwhile, the United States is expected to introduce crypto-friendly legislation under the new administration.
The competitive landscape is vibrant, with Solana, Ethereum, and Bitcoin revitalizing their respective ecosystems. Success in 2025 will depend on real-world applications, security, and user-centric solutions.
In summary, 2025 is filled with exciting opportunities and challenges.
Link to the article: https://www.hellobtc.com/kp/du/12/5603.html
Source: https://everstake.one/blog/blockchain-beyond-2024-trends-insights-and-predictions-for-2025
