Crypto market outlook for 2025: DeFi and AI as core investment themes

Web3 investment can be divided into two categories: underlying infrastructure and application scenarios. There are essentially two types of investing: long-term value and short-term stimulus. Most crypto investors tend to pursue short-term high yields and prefer cyclical investments.

! Core Investment Themes to Watch in Crypto in 2025: DeFi and AI

2025 may become the “first year of regulation” in the crypto space. Major economies plan to introduce regulations that will not only boost the confidence of traditional investors, but also screen out projects with real potential. It is expected that a new wave of traditional “old money” will enter, and they will pay more attention to project fundamentals and data analysis.

In this context, decentralized finance (DeFi) and blockchain layer 1 protocols will (L1) become the favored themes of traditional investors. DeFi is more attractive due to its low cap cap, large room for growth, and high alignment with fundamentals. Some DeFi projects have generated more than $100 million in revenue this year, which is bound to attract attention.

! Core Investment Themes to Watch in Crypto in 2025: DeFi & AI

DeFi is expected to become one of the important directions for institutional investors. A large asset manager has started working with DeFi projects, and this trend is taking shape. DeFi is more like a long-term investment, similar to the attitude that investors have had towards BTC and ETH in the past. The long-term potential of a lending platform may be seen as comparable to ETH.

In the DeFi-dominated market, new projects will continue to emerge, and some established projects will also regain traction. Many of the leading DeFi applications are planning to transform into infrastructure, which will further increase the value of the token. Next year, there may be projects that will announce adjustments to the fee mechanism, and investors need to be prepared for this.

! Core investment themes to watch in the crypto space in 2025: DeFi and AI

DeFi is expected to dominate the market for at least two quarters next year. As for AI, 2025 is likely to be criticized for its rapid expansion, and the “responsible AI” discussion will be in focus. AI agents may experience bubble growth, and the number may increase from the current 13,000 to more than 100,000, and then enter the bubble bursting stage.

! Core Investment Themes to Watch in Crypto in 2025: DeFi & AI

Regulation will also spark interest in privacy infrastructure, with projects involving confidential DeFi, privacy-preserving computing, storage, and inference receiving more attention. The meme market is expected to remain buoyant, and established meme coins are likely to attract more serious investors.

! Core Investment Themes to Watch in the Crypto Sector in 2025: DeFi & AI

In 2025, mobile Web3 wallets and super apps are expected to make their mark. The recent IPO of a Web3 wallet company at a valuation of $1.2 billion may drive a wave of speculation in related tokens.

! Core Investment Themes to Watch in Crypto in 2025: DeFi and AI

Overall, AI and DeFi will be the two core themes for next year. DeFi is expected to dominate; AI agents may enter the bubble stage; Meme speculation will continue to attract participants; The (DePIN) of privacy and decentralized physical infrastructure networks will outperform in a quarter; Web3 wallets will gain more traction, driving mainstream adoption.

! Core Investment Themes to Watch in Crypto in 2025: DeFi & AI