2025 Crypto Market Investment Opportunities and Trend Outlook

Competitive Landscape of Smart Contract Platforms

With the arrival of a new bull market, Ethereum's market dominance is expected to further decline, with its market share potentially dropping to around 30%. This is mainly due to three reasons:

1. The number of new users entering the market in the new cycle will far exceed previous levels.
2. Incremental users bring diverse value orientations
3. Ethereum struggles to meet the demand preferences of all groups.

The Ethereum ecosystem places the "decentralization principle" at the highest priority, which creates a contradiction with achieving true "mass adoption." Not all scenarios require Ethereum-level decentralization; other value dimensions such as execution efficiency, compliance frameworks, and user experience may take precedence over decentralization.

This diversity of value orientation will continue to stimulate the market demand for other public chains besides Ethereum. It is almost impossible for a winner-takes-all situation to form in the field of smart contract platforms in the future.

The number of major public chains participating in the competition may decrease, but new frameworks and platforms will continue to emerge, and existing leading public chains will also continuously improve their infrastructure. Public chains like Solana and Injective, which build unique ecosystems based on their respective advantages, will ultimately gain greater market attention.

Innovation Opportunities in the DeFi Sector

The DeFi track has been validated by the market, but there is still huge room for innovation. Taking stablecoins as an example, if differentiated models can be constructed and historical risks can be avoided, it is completely possible to generate new market demand.

Ethena builds high yields through funding rates, forming essential innovations in its underlying architecture compared to USDT and USDC. In addition to the basic attraction of "high interest rates", it continuously expands the application scenarios of USDe, such as being integrated with Bybit to be used as collateral for trading perpetual contracts.

Projects like Hyperliquid are innovating the derivatives trading experience through an order book model, showcasing a similar innovative gene to Ethena. Such projects that "open up blue oceans in the red sea track" are always key subjects of observation.

New Ideas for Community Building

A real community cannot be built just by throwing money at it; people need to gain a sense of belonging through "shared experiences in adversity" beyond economic incentives. Besides economic incentives, the only thing that can spontaneously bring people together is an engaging narrative.

The reason Ethereum and Solana have strong communities is that they both experienced the DAO attack and the collapse of the FTX incident, but they rose from the ashes, forming a unique community narrative. In the NFT space, Azuki is one of the few projects that has built this "narrative."

Projects with a solid community base will perform exceptionally in the industry. After all, code can be forked, but a community cannot be replicated.

Development of the Bitcoin Ecosystem

In the bull market of 2024, the price of Bitcoin rose more than 2.4 times from the previous low. This is not only driven by the four-year halving cycle and political factors, but more importantly, by the gradual shift in public perception of encryption, the further development of the blockchain industry, and the involvement of traditional financial forces in perfecting the crypto ecosystem.

In 2025, capital is expected to be redistributed to other projects, such as Ethereum and other public chains, as well as L2. These projects have been quietly preparing under the shadow of Bitcoin, and with the influx of capital, they may shine brightly this year.

Continuous Growth of the Restaking Ecosystem

Restaking allows users to reuse staked assets, providing additional economic security for multiple public chains or applications, enabling the staked assets to be recycled, enhancing scalability and liquidity, while earning extra rewards. In 2024, the Restaking ecosystem achieved significant growth.

The keywords for Restaking in 2025 may be "the emergence of more participants" and "expansion to other L1 chains." Competition among Restaking providers within the Ethereum ecosystem will intensify, while the Restaking narrative may extend to other ecosystems like Bitcoin and Solana.

The Integration of AI and Encryption

The AI Agent occupies more than 70% of attention in the entire market, making it the most prominent narrative. The combination of encryption and AI Agent will continue to be a key topic, as AI is considered a keyword in almost all industries.

Projects that can survive are those that go beyond technical imagination and possess innovative ideas, while also having practical value. The Virtuals Protocol provides a launch platform for the AI Agent development framework and AI Agent tokens, offering integrated services that will ensure its unique position as the foundational layer of the AI Agent market.

The combination of DeFi and AI Agents seems to be the most reasonable path. As autonomous portfolio management tools, natural language-based user experience improvements, and automated trading tools, AI Agents are expected to become key use cases leading the integration of AI Agents with the crypto market.

The Revival of DeFi: The Rise of the Fee Switch Model

With the improvement of the regulatory environment, multiple cutting-edge DeFi protocols are actively considering the implementation of a fee switch model. This will tie the value of DeFi tokens to the actual revenue of the protocols, with the potential to drive a revaluation of DeFi tokens.

Unlike the DeFi Summer of 2020 driven by liquidity mining, this DeFi revival will prioritize sustainable models, continuous income generation, and the revaluation of DeFi tokens. DeFi protocols have the opportunity to consolidate their competitive advantage over traditional financial systems by providing decentralized solutions based on real economic benefits.

The Return of Community Financing Models

The success of Hyperliquid sets a precedent for the development trajectory of Web3 projects in the coming years. By ensuring equal opportunities for all participants and refusing to allocate tokens to private investors or market makers, the project directly challenges the common practice of inflating valuations through VC funding.

The revival of community financing models seems inevitable. In a clearer regulatory environment, the market may restore an atmosphere of mutual trust. The airdrop model is also expected to recover and may become one of the defining themes of 2025.

Hyperliquid's pioneering approach provides a blueprint for the future of Web3. Its principles of fairness, transparency, and product-first growth will influence the next generation of projects. The year 2025 may mark a significant step towards achieving the foundational ideals of decentralized value creation and equitable participation in Web3.