Investment themes to watch in the crypto space in 2025

Author: hitesh.eth

Compiled by: Deep Tide TechFlow

Purely practical insights, no false hopes.

Before you start reading, I hope you can temporarily set aside your preconceived notions and take a few minutes to carefully consider what I am about to share.

From a macro perspective, the investment themes in Web3 can be divided into two main categories: underlying infrastructure (infra) and application scenarios (apps).

Investments can essentially be categorized into two types: one that may seem unremarkable in the short term but could yield substantial returns in the long run; and another that is exciting in the short term but may ultimately be worthless.

Most cryptocurrency investors enter this market in pursuit of quick and substantial returns, and they are willing to take on the corresponding risks.

As a result, people tend to prefer cyclical investments—these investments are usually short-term and only effective during specific bull market cycles.

The year 2025 will become the "year of regulation" in the cryptocurrency space.

The United States and several other major economies plan to introduce relevant regulations domestically. The introduction of these regulations will not only enhance the trust of traditional investors (especially the older generation) but will also filter out a few truly promising cryptocurrencies—only those projects with solid fundamentals and stable cash flow will stand out.

We can foresee a wave of new traditional investors entering the market. These investors hold "old money" and will venture into the cryptocurrency space for the first time.

They will not blindly invest just because of market hype; instead, they will carefully study projects, read reports and data, and only make investment decisions when it makes logical sense.

In this context, decentralized finance (DeFi) will become a favored investment theme among traditional investors, along with the first-layer protocols (L1) of blockchain.

However, due to the lower market cap ceiling of DeFi projects, their growth potential is greater, and they are highly aligned with fundamentals and data. This year, some DeFi projects have already generated over $100 million in revenue, which will undoubtedly attract the attention of traditional investors.

Traditional investors have substantial capital, and ample funding is key to the market's healthy growth. Don't forget that many institutional investors are also led by traditional investors.

It is foreseeable that DeFi will ultimately become one of the key investment directions for top institutional investors.

BlackRock has already started collaborating with DeFi projects, and this trend is gradually taking shape.

DeFi is not a cyclical investment; it is more like a long-term investment, similar to how past investors viewed BTC and ETH.

The long-term potential of AAVE may be seen as comparable to that of ETH.

When you invest in blue-chip DeFi projects, you can focus on long-term development;

Whereas when you choose to invest in a brand-new DeFi native project, you might consider short-term gains, as these projects could also yield multiples or even higher returns.

In a DeFi-dominated crypto market, many emerging projects will appear one after another, while some established projects will regain attention. You will see waves of price increases surrounding these projects.

In the DeFi space, many blue-chip applications (like Uniswap) are planning to transform into underlying infrastructure projects. This transformation will further enhance the value potential of tokens, and next year, some projects may announce adjustments to their fee mechanisms, so you need to be prepared for this.

These changes will inject strong momentum into the narrative of DeFi's development.

I expect DeFi to dominate at least the first two quarters of next year, much like AI has this year.

As for AI, I believe that 2025 will be a year when AI faces widespread criticism in popular culture due to its rapid and uncontrolled expansion.

The discussion around "responsible AI" will become a focal point.

Market activities surrounding crypto AI infrastructure, AI agents, and Initial Agentic Offerings may enter an adjustment phase due to the narrative of "responsible AI."

But before that, I expect AI agents to experience a round of bubble-like growth.

Currently, there are 13,000 agents in the market, and I expect this number to grow to at least 100,000.

Subsequently, we may enter a bubble phase and see it burst the following year.

When exactly this will happen will depend on the timeline of AI regulatory events.

Regulation will also spark interest in privacy infrastructure, so major projects involving confidential DeFi, privacy computing, privacy storage, and privacy reasoning will receive more attention, and this attention will also be reflected in their asset performance (PA).

The meme market will remain active.

Although regulators may not support it, people will always find ways to enter, as complete prevention is impossible.

Speculators will continue to seek opportunities among the 100,000 new coins added daily.

However, some established memes, such as DOGE and PEPE, may attract the attention of more serious investors.

Even if you don't like memes, you should consider allocating a portion of your investment exposure to them.

The year 2025 will also be a year when mobile Web3 wallets and super applications emerge.

Recently, a Web3 wallet company named Exodus went public on NASDAQ with a valuation of $1.2 billion, which may drive a speculative frenzy next year around tokens related to Web3 wallets with strong revenue performance.

AI and DeFi will become the two core narratives of next year:

• DeFi is expected to dominate;

• AI agents may enter a bubble phase;

• Meme speculation will attract more participants;

• Privacy and DePIN (Decentralized Physical Infrastructure Networks) will emerge in a certain quarter;

• Web3 wallets will gain more attention and drive mainstream adoption through more user-friendly guidance and higher-quality experiences.

That concludes my sharing.

Please note that I am neither an astrologer nor an expert in the cryptocurrency field. I am just an ordinary person with some random thoughts about the market, so don't take my views too seriously.