2025 Investment Outlook in the Encryption Field: DeFi and AI as Core Themes

Investments in the cryptocurrency field can be broadly divided into two categories: infrastructure and applications. Investors often pursue short-term high returns and tend to favor cyclical investments. However, 2025 may become a landmark year for cryptocurrency regulation, as major economies like the United States plan to introduce relevant regulations. This will not only enhance traditional investors' confidence but also filter out truly promising projects.

With a new wave of traditional investors entering the market, Decentralized Finance (DeFi) and Layer 1 blockchain protocols (L1) will become popular investment themes. Among them, DeFi may be more favored due to its lower market cap, significant growth potential, and strong alignment with fundamental data. Some DeFi projects have generated over $100 million in annual revenue, which will undoubtedly attract the attention of traditional investors.

Decentralized Finance is gradually becoming one of the important layout directions for top institutional investors. Some well-known asset management companies have begun to collaborate with DeFi projects, and this trend is taking shape. DeFi investment can be seen as a long-term strategy, similar to how past investors approached Bitcoin and Ethereum. The long-term potential of some blue-chip DeFi projects may be comparable to Ethereum.

In a DeFi-dominated market, emerging projects will continue to emerge, and some established projects may also regain attention. Many blue-chip DeFi applications are planning to transform into infrastructure projects, which will further enhance the value of their tokens. Next year, some projects may announce adjustments to their fee mechanisms, and investors should remain vigilant about this.

Decentralized Finance is expected to dominate at least two quarters of 2025, with performance potentially similar to the hype surrounding artificial intelligence in 2024. However, AI may face criticism in 2025 due to its rapid and uncontrolled expansion, making the discussion of "responsible AI" a focal point. Market activities surrounding encryption AI infrastructure, AI agents, and initial agent releases may consequently enter an adjustment period.

However, before that, AI agents may experience a round of bubble growth. Currently, there are 13,000 agents in the market, and this number could increase to over 100,000. It may then enter a bubble phase and burst the following year. The specific timing depends on the progress of AI regulatory events.

Regulation will also spark interest in privacy infrastructure, with projects involving confidential Decentralized Finance, privacy computing, storage, and reasoning likely to receive more attention.

The Meme market is expected to remain active. Although regulators may not support it, speculators will still look for opportunities among the large number of new tokens. Some well-known Meme tokens may attract the attention of more serious investors.

2025 may also be the year when mobile Web3 wallets and super apps emerge. Recently, a Web3 wallet company went public on Nasdaq with a valuation of $1.2 billion, which could drive a speculative frenzy next year related to Web3 wallet tokens with strong revenue performance.

Overall, the core theme of the cryptocurrency market in 2025 is expected to be:

1. Decentralized Finance可能占据主导地位
2. AI agents may enter a bubble phase.
3. Meme speculation will continue to attract participants.
4. Privacy and Decentralized Physical Infrastructure Networks (DePIN) may emerge in a certain quarter.
5. Web3 wallets will receive more attention, driving mainstream adoption.