Crypto industry predictions for 2025

Last week, we examined predictions and ideas from crypto industry reports for the upcoming year. This week, I offer my own predictions about where things are heading.

The major theme for 2024 was crypto’s newfound utility, which I think held up over the course of last year. Two predictions from last year that seem especially relevant to this year are the onchain movement and how Bitcoin continued to separate itself from other crypto assets in terms of its overall utility as a digital store of value and utility in global finance.

Brand and Narrative Predictions for the 2024 Hype Cycle

Every crypto hype cycle so far has been defined by narratives. Usually these narratives anchor on some kind of utility of talk about what’s coming next. This post provides some predictions about what the narratives for the upcoming hype cycle can (or maybe should) look like.

Daniel McGlynnDaniel McGlynn

For 2025 — at a high level — I think the industry and the market become more nuanced and more fragmented. This trend leads to opportunities for some sectors within the broader crypto industry but causes a retreat toward irrelevance for others.

Here are some interesting trends or topics that will be interesting in 2025.

NFTs become more important

But not how they were in the first wave.

The first wave of NFTs was all about collectibles or toying with the idea of digital scarcity. While this use case will still hold up over time, there’s less interest in speculating on expensive digital art.

The next wave of NFTs—and the resurgence is already underway—will be more closely aligned with digital utility. Use cases for NFTs will become more dominant, such as digital identity, community membership, or token-gating.

If that trend continues, it would make sense for NFTs to find more mainstream adoption, including uses like ticketing for major live events or gym memberships.

This shift will start to make sense for users. As managing identity-based payments and wallet-connected applications becomes more mainstream, it will make sense to reduce fraud and identity theft.

The shift toward NFTs to easily verify identity or membership will also make sense for brands and businesses. They’ll be able to have better interactions with individual users (offering tailored offers and incentives) and build more engaged communities.

Over time, it will make sense for NFT-based communities to become more of a driver of brand building than the current mass media-style social media and KOLs.

The crypto industry fragments further

Some sectors will thrive, while others will struggle to find the right product-market fit.

Not that long ago, getting into the crypto industry meant reading key newsletters or listening to a handful of industry-specific podcasts.

The key issues were simpler in a way. Experts would debate things like Bitcoin scaling strategies or the need for modular design in the Ethereum ecosystem.

Other issues that feel quaint now were degrees of decentralization or the right level of reserve transparency for stablecoin issuers.

But as the industry evolves and matures, it’s becoming much more challenging to track. Research is becoming more niche, brands and use cases are becoming more specialized, and the time needed to keep track of everything is increasing.

Over time, this specialization will make individual crypto sectors feel less related to one another. DeFi is already at this point. Crypto ETFs might be another example. Developer-centric layer 2 (like Base) might be another example.

The specialization of crypto isn’t a bad thing — it’s essentially a byproduct of maturity, but it will make it more complicated to stay aware of what’s going on.

Similarly, there will be more division among blue chip crypto and all other assets. The idea of “alt season” will be replaced by a more mature market favoring utility and TVL over speculative hype, except maybe for memecoins, which will become a big deal in 2025.

IPOs of major crypto firms and new crypto ETFs

The crossover between crypto and traditional finance becomes more pronounced.

Several big crypto firms, mainly consumer wallet companies and stablecoin providers, will likely IPO in 2025. While this is a strong signal for the industry overall, it also adds another wrinkle to its complexity.

Not long ago, the crypto industry was defined by young upstarts challenging the status quo. But as the industry matures, it changes. We saw signs of this in the most recent election cycle in the US, during which the crypto lobby had a noticeable influence.

The trend of becoming part of the establishment will continue creating new kinds of tensions and opportunities for industry operators.

The big takeaway is that the ideas that got the crypto industry this far aren’t necessarily the same things that will propel it forward.

The robots are coming

Automation brings a new level of crazy.

The arrival of AI agents for memecoin trading (and other crypto activities) will bring new ways to get completely rekt. In short, the trend will trigger significant losses, possibly with cascading effects.

We have seen (somewhat recently) that algorithmically controlled finance can create significant issues. AI agents designed for creating and trading assets feel related.

Hopefully, the issues will be systemic, and the losses will remain contained among the people using AI agents in their trading setups. Still, if history is any teacher, that’s not what will happen.

While this will create issues in the short term, in the long term, there will eventually be a role for AI agents and automated finance that allows machines to control payments and assets to accomplish programmable and delegate tasks.

Launching AI agents that trade memecoins is probably just the first version of this kind of technology.

The regulatory road isn’t as smooth as predicted

The legacy system will continue to side-eye the crypto industry.

The current crypto market hype is based on the idea that more favorable regulatory conditions are on the horizon.

Again, taking a lesson from recent history, I don’t think this will play out in a way that aligns with market sentiment.

While there will likely be some regulatory improvements, the road to absolute clarity or even “acceptance” will likely still take some time.

Crypto started as a protest movement, and it will take time for it to completely fold into the traditional financial system. Also, significantly, it’s important to remember that crypto is a global movement that extends way beyond presidential politics in the United States.

2025 big picture

To say that crypto is at a crossroads feels overly dramatic and inaccurate.

However, some current trends suggest that there will be many sectors within the crypto industry. A growing sense of a crypto establishment will likely create new kinds of competitive dynamics between old-school crypto companies and younger startups.

It will also be interesting to watch as the crypto part of crypto becomes less critical to the overall utility of decentralized digital assets for Open Money. The coming year is getting set up to create interesting use cases for essential uses like digital identity or community management.

If nothing else, 2025 will be interesting. It will be another dynamic year for the industry (and hopefully for this newsletter).

Wishing you a happy and prosperous New Year.