2024 was a momentous year for the cryptocurrency industry, with many significant events taking place. At the beginning of the year, the approval of the Bitcoin spot ETF injected strong momentum into the market, and by the end of the year, the price of Bitcoin broke through the $100,000 mark, reaching a new all-time high. During this period, key events included the Bitcoin halving, the approval of the Ethereum spot ETF, the booming TON/Telegram ecosystem, the surge in on-chain transactions, interest rate cuts, the election of Trump, the revival of value investing, the popularity of new AI agents, and the birth of DeSci - countless classic moments that are worth revisiting.
As we bid farewell to 2024, we stand at a new starting point, eagerly anticipating 2025. The upcoming interest rate cut cycle, accommodative monetary policy, friendly regulatory environment, and positive attitude towards cryptocurrencies are all factors that suggest 2025 could see the arrival of a massive bull market. We expect Bitcoin prices to reach new highs, potentially surpassing $200,000 per coin. Additionally, based on historical Altcoin Dominance data from past bull markets, the current Altcoin Dominance of around 57% indicates that there is still room for significant structural movements in the Altcoin market. We anticipate that in 2025, Altcoins will experience a notable rally, with Bitcoin Dominance potentially dropping below 50%, or even as low as 45%. At the same time, established cryptocurrency projects such as Ethereum, Solana, and Ripple are expected to break new historical highs. In an overall environment of ample liquidity, the entire cryptocurrency market, including Bitcoin, Altcoins, DeFi, RWA, MEME, AI-related projects, and public chains, is highly likely to reach new all-time highs in terms of total market capitalization.
Alongside the significant growth in market capitalization and prices, we firmly believe that the cryptocurrency industry will make even greater strides in terms of technology and innovation, deeply integrating with the policy environment and monetary trends of the new era. Whether in the fields of finance, social, or artificial intelligence, we look forward to cryptocurrencies playing a more extensive role and contributing more to the reshaping of the world.
Bitcoin and Its Ecosystem: A Continuous Journey of Mining and Building
With the continued inflow of Bitcoin ETFs, the frenetic financing and short-selling activities of Microstrategy, and the potential implementation of a national Bitcoin reserve strategy under the new Trump administration, the market prospects for Bitcoin are becoming increasingly promising. Its fixed total supply and the halving of block rewards have led to a low-inflation environment, while the monetary easing policies during the interest rate cut cycle have further fueled its momentum. The interplay of these factors suggests that in 2025, Bitcoin will not merely hover around the $100,000 mark, but is poised to reach even higher market capitalization. Bitcoin is often referred to as "digital gold," and its market capitalization ratio to gold has been steadily rising, from 2% to over 10% currently. In 2024, this ratio surged from 5% to 10%. Considering the various positive factors, we expect the Bitcoin-to-gold market capitalization ratio to further increase to 15% to 20%, implying a Bitcoin price range of $150,000 to $200,000.
Although Bitcoin itself has demonstrated immense influence, its ecosystem projects are still in the early stages of development. Among the top 100 projects by market capitalization, only Stacks has stood out, while the majority of Bitcoin ecosystem projects rank relatively low. Currently, the market capitalization of Bitcoin is around $2 trillion, while the total market capitalization of its ecosystem projects only accounts for 0.5% to 1% of Bitcoin's market value, or $10 billion to $20 billion. This low ratio suggests that the Bitcoin ecosystem is like an untapped treasure trove, brimming with vast wealth potential and endless opportunities. We expect that as ecosystem development progresses and resources are increasingly invested, this ratio could significantly increase from the current 0.5% to 1% to 2% or even 3%, implying a total market capitalization of $50 billion to $60 billion for the Bitcoin ecosystem.
Reflecting on 2023, the rise of Ordinals sparked widespread market attention and enthusiasm for the Bitcoin ecosystem. In the first half of 2024, the Bitcoin ecosystem experienced its first notable peak. During this period, the influx of capital and development resources was rapid, and numerous projects emerged and launched. Among them, Stacks, Merlin Chain, Bounce Bit, Solv, Babylon, UniSat / Fractal, RGB, Nervos, Bitlayer, and Mezo were particularly noteworthy, each showcasing their capabilities and injecting strong momentum into the ecosystem's prosperity. Furthermore, with the periodic Bitcoin halving event, the block rewards will gradually decrease, posing higher demands for network maintenance. To meet this need, miners will have to become more actively involved in ecosystem building to ensure the robust operation of the entire network.
Although the pace of decentralization has been relatively slow, the continuous influx of capital and development resources, coupled with the urgent need for network maintenance, are collectively driving the ongoing evolution of the Bitcoin ecosystem. As Bitcoin prices reach new heights, the ecosystem will require more liquidity to sustain its vitality. In the realm of critical technologies, OP_CAT and BitVM are gradually emerging, laying a solid foundation for the future development of the Bitcoin ecosystem. Looking ahead, after a one- to two-year construction period, we have reason to believe that the achievements of these projects will begin to manifest in 2025, and some of Bitcoin's key technologies may also be truly implemented, further propelling the Bitcoin ecosystem towards a more mature, stable, and prosperous new stage.
The Digitalization of Traditional Finance: Fully Embracing Digital Assets
With the rapid development of cryptocurrency technology, the traditional financial system is undergoing a profound transformation, as crypto assets are gradually moving from the periphery to the mainstream, becoming an undeniable part of the global financial system. The personal IP MEME coin issued by Trump, while to some extent impacting the price structure of past cryptocurrencies and projects, as the President of the United States, his family's every move in the cryptocurrency field undoubtedly carries immense influence. This influence is not only reflected in the fluctuations of market sentiment, but also in the far-reaching impact on the traditional financial system. Trump's MEME coin, although possessing a certain degree of entertainment and speculative nature as a new type of digital asset, the trend it represents cannot be ignored: traditional finance is accelerating its embrace of digital assets, and this trend will profoundly reshape the landscape of the financial industry.
The US government is about to introduce clearer and more friendly cryptocurrency regulatory policies, creating a more favorable environment for the development of digital assets. For example, the US may accelerate the compliance process for cryptocurrency exchanges, or introduce more policies to support blockchain technology innovation. As more traditional financial institutions and investors enter the cryptocurrency field, the price fluctuations of digital assets are increasingly correlated with the performance of traditional financial markets. For example, the price trend of Bitcoin has shown a certain correlation with traditional assets such as US stocks. This deep integration will further promote the cryptocurrency-ization of the traditional financial system, making digital assets an indispensable part of the global financial system. In the future, we may see more traditional financial institutions launch their own cryptocurrency products, or apply blockchain technology to their existing financial businesses. With the participation of more people and the entry of more traditional financial institutions, the application of cryptocurrencies in the financial field will become more extensive and in-depth. This trend will not only change the landscape of the financial industry, but also inject new vitality into the development of the global economy. The future of traditional finance cryptocurrency-ization is full of challenges, but also full of opportunities, and this is just the beginning.
AI Agent: The Newly Evolved Intelligent Entity
In 2025, the AI Agent sector is expected to usher in explosive growth, and its heat may even surpass the "DeFi Summer" of 2020. Similar to the DeFi wave back then, the development of AI Agent has also gone through a process from preliminary exploration to rapid rise. In the first stage, AI Agent attracted a lot of attention and capital investment due to its innovative applications in areas such as automated trading and intelligent analysis. However, with the rapid heating up of the market, the sector also experienced a wash-out process, and some projects experienced setbacks due to technical or market factors. However, the long-term development of AI Agent is still widely optimistic. In 2025, OpenAI launched a new generation of reasoning model o3, whose powerful reasoning ability and performance close to Artificial General Intelligence (AGI) injected new momentum into the development of AI Agent. The o3 model performs excellently in tasks such as mathematics and programming, and can conduct reasoning through "private thought chains", further enhancing the intelligence level of AI Agent. In addition, the application scenarios of AI Agent are constantly expanding, from DeFi to DAO governance, and it has shown great potential in optimizing trading decisions, improving user experience, and enhancing governance efficiency.
In the new cycle, AI Agent has evolved from a traditional AI model auxiliary tool to become the core driving force of the community ecosystem, completely transcending the limitations of the single "tool attribute". Now, its development model is led by "community-oriented" approach, focusing on the growth of AI Agent itself and the construction of the ecosystem, like building a fully autonomous community composed of robots.
Under the "community-oriented" model, ai16z and Virtuals can be considered as two major representatives. Virtuals has built a complete AI Agent creation and token issuance platform similar to the "Apple ecosystem", constructing a closed-loop ecosystem. ai16z focuses more on open-source frameworks and decentralized governance, and the two have their own characteristics in terms of technical architecture, token economics and market strategy, precisely meeting the different needs of users.
Currently, the AI Agent market is mainly divided into two major project categories: the "technical support layer" and the "scenario implementation layer". The "technical support layer" is committed to providing underlying technology and infrastructure support for AI Agent; the "scenario implementation layer" focuses on applying AI Agent to specific business scenarios to realize its actual value. As the infrastructure gradually matures and saturates, the coordinated development of infrastructure and applications will become the core theme of the next stage, driving the industry towards deeper integration. ArkStream points out that the current hot situation of AI Agent is obvious, and the FOMO sentiment has prompted various capital to rush in, trying to get a share. This rapid expansion pattern has led to the emergence of projects like mushrooms after the rain, but so far no single project has a market value exceeding $10 billion. This stage can be seen as the "primary stage" of the Web3 AI Agent track, with the core feature being time-oriented: market participants generally have a speculative mentality, striving to enter the market as quickly as possible.
ArkStream Capital predicts that the "second stage" will arrive in 2025, and the market focus will shift to product quality, followed by a major reshuffle - low-quality, speculative projects will be quickly eliminated by mainstream capital. With the continuous iterative upgrade of traditional AI technology, ArkStream Capital remains optimistic about the overall prospects of this track. The current heat is enough to demonstrate its potential development space, and it is expected that the first batch of AI Agent projects with a market value exceeding $10 billion will become an important milestone in the industry's development in the near future. The current market value of AI Agent has entered the range of $15 billion to $20 billion, and has shown strong growth momentum in the past few months, with an increase of over 30% in the past week. With the continuous maturity of technology and the widespread recognition of the market, AI Agent is expected to become one of the most promising sectors in 2025. Its market value is expected to continue to maintain rapid growth, and is expected to reach $50 billion or even higher by 2025. This growth trend is not only due to the progress of AI technology, but also stems from its widespread application and implementation in multiple fields.
RWA and Stablecoins: The Financial Bridge with Unlimited Prospects
RWA covers a wide range of asset classes, including stablecoins, private credit, US Treasuries, commodities and stocks. Among these assets, stablecoins can be viewed as an independent track due to their uniqueness and importance. For non-stablecoin RWAs, due to the complexity of asset standardization and the imperfection of policy and regulations, the scale is relatively small, so we will focus on the stablecoin field.
In the cryptocurrency market, since 2018, US dollar-pegged stablecoins have played a key role. They not only serve as the benchmark currency unit for transactions, but also act as shadow US dollar assets, active in scenarios such as remittance and payment. As of December 1, 2024, the total market value of stablecoins has increased to $193 billion, an increase of 48% year-on-year. Taking the on-chain daily transaction volume as an example, the current daily transaction volume is stable in the high range of $25 billion to $30 billion, and even during the market downturn, the data has not fallen below $10 billion. In terms of trading volume, referring to the industry data of CoinMarketCap, the monthly trading volume in November reached $60 trillion, which means that stablecoins accounted for 30% of the industry's centralized trading volume. This proportion does not include the on-chain stablecoin trading volume, which means that the actual proportion may be even higher. In addition to issuance volume, trading volume and transfer volume, stablecoins have also introduced assets with stable returns such as US Treasuries as underlying assets, providing stable and sustainable returns, bringing positive externalities to the industry, and further promoting the connection and integration of Web3 and reality.
In the stablecoin market, with the increase in market demand, various types of stablecoins have gradually emerged, including fiat-backed stablecoins, decentralized collateralized stablecoins, and algorithmic stablecoins. Among them, fiat-backed stablecoins have already occupied a large part of the market and the market size is constantly growing, but due to the continuous emergence of trading demands in the market, decentralized issued stablecoins have been exploring new paths. In this process, Ethena has stood out as a leader, and the USDe issued by Ethena, as a synthetic US dollar, has occupied a place in the DeFi field with its innovative financial solutions. The feature of USDe is that it adopts an advanced Delta hedging strategy to maintain its peg to the US dollar, which makes it stand out among traditional stablecoins. In just over a year, the issuance scale of USDe has steadily grown, successfully withstanding the test of the market downturn in Q2 and Q3, and has now risen to the third place, second only to USDT and USDC, and has re-entered a rapid development phase.
ArkStream Capital believes that Altcoins play a key role in navigating the crypto industry through bull and bear cycles, with strong growth momentum that will not stagnate. Whether in the payment or trading sector, Altcoin's various data indicators are expected to continue growing. With the arrival of the bull market, the issuance scale of Altcoins will expand along with the industry growth, and their market capitalization is expected to double, exceeding $400 billion. In this trend, decentralized Altcoins, with their advantages in transparency, decentralization, and yield, are significantly better than traditional Altcoins and are expected to capture a larger market share. It is expected that the market share of decentralized Altcoins will grow from the current $20 billion to over $60 billion, accounting for more than 15% of the entire Altcoin market. Ethena, as a leader in the decentralized Altcoin field, has built a number of innovative Altcoin products such as USDtb and iUSDe around USDe. These products further promote the market penetration of decentralized Altcoins through cooperation with traditional finance and asset management institutions.
DeFi: The Pillar of Continuous Development and Prosperity
In 2025, the DeFi sector will usher in unprecedented development opportunities. With the gradual relaxation of regulatory policies in the US, a large influx of traditional financial institution funds has significantly enhanced the industry's liquidity. With the eruption of capital, the DeFi sector's TVL is expected to soar, aiming to break through the previous high point towards $200 billion, becoming a shining highlight in the crypto finance field. Moreover, user activities in lending, DEX, and Altcoin markets will also increase significantly, with the number of daily active addresses and daily active funds likely to reach a new level of growth, driving another milestone in the appreciation of DeFi ecosystem assets. At the same time, major exchanges are actively promoting the popularization of Web3 wallets, which have made significant improvements in user experience, greatly reducing the operational threshold and allowing more users to easily participate in the DeFi ecosystem.
In addition, the on-chain economic activity has also been significantly enhanced by the on-chain activities organized by various DeFi projects in collaboration with exchanges. These activities not only attract a large number of users to participate, but also further promote the prosperity and development of the on-chain ecosystem. Against this backdrop, DeFi is gradually breaking away from its dependence on traditional finance or exchanges, presenting a new development landscape. In the new era, the development of DeFi will no longer be limited to traditional DEX, lending, and staking functions. In the future, DeFi will focus more on new key indicators such as on-chain daily active users (DAU) and capital activity. DeFi protocol product design will also closely revolve around users' rigid needs, such as security, ease of use, and user experience optimization.
In the past, DeFi has successfully attracted a large number of on-chain natives, and with the help of Web3 wallets, more and more users are pouring into the on-chain, continuously expanding the scale of on-chain natives. We believe that in 2025, the entire industry will see new breakthroughs in various on-chain data indicators. It is worth mentioning that the boundaries between DeFi and CeFi are gradually blurring, and the trend of their integration is becoming more and more evident. The liquidity between CeFi and DeFi has significantly improved, injecting more vitality into the entire financial ecosystem. At the same time, the diversified innovation of wallet-type products is also constantly stimulating user enthusiasm, injecting new momentum into the industry. It can be foreseen that in the future, DeFi will embrace a broader development space with a more open and integrated posture.
Meme: A Vivid Interpretation of the Attention Economy
In 2024, Meme experienced significant growth and evolution, especially in terms of total market capitalization, trading activity, theme diversity, and exchange support. From October to early December, the total market capitalization of Meme coins grew significantly, reaching a new historical high, and trading volume also increased substantially. The market witnessed the emergence of various new types of Meme coins, including AI Agent Meme (GOAT, ACT), art-related Meme (BAN) linked to Sotheby's art auctions, squirrel-themed Meme (PNUT) related to Trump and Elon Musk, and CHILLGUY that attracted a large number of Tiktok fans. The rise of these new Meme coins not only injected vitality into the market, stimulating the liquidity of on-chain funds, but also attracted a large number of new investors to enter the market, contributing to the prosperity and development of Meme and the crypto industry.
Compared to the new Meme, traditional Meme such as DOGE, PEPE, and WIF have also performed strongly in the market. Particularly, PEPE and WIF successfully listed on Robinhood in November 2024, not only highlighting the recognition of Meme by North American compliant exchanges, but also further expanding the market influence of these established Meme.
Combining the relevant data of the Meme sector over the past year, as of the end of 2023, the number of Meme in the top 500 by market capitalization was extremely limited, mainly including a few such as DOGE, SHIB, BONK, PEPE, FLOKI, and ELON, while most Meme had relatively low market capitalization. However, by the end of 2024, the number of Meme in the top 500 by market capitalization had grown significantly to 48, accounting for nearly 10%, with a total market capitalization of about $104.7 billion and a 24-hour trading volume of $7.4 billion. This all indicates that the recognition and market consensus of Meme are constantly breaking through.
Particularly in the fourth quarter, Meme became the focus of the crypto market, attracting a large number of investors' attention. With the return of value investment trends in November, some funds began to flow out of Meme, but some newly listed popular Meme, relying on their good market performance and large user base, were quickly listed on mainstream exchanges such as Binance and Upbit. Although the lack of relay capital inflow led to a significant correction from the highs for these Meme, ArkStream Capital believes that this correction is the perfect embodiment of the attention economy in the market, indicating that the inflow and outflow of Meme funds will change significantly with the fluctuation of market attention. Many Meme have seen their market capitalization rapidly grow to $100 million or even higher in a short period of time, so it is reasonable to experience corrections and time-tested validation. At the same time, some emerging sectors, such as DeSci (Decentralized Science), are attracting attention and resources through the form of Meme, which is more flexible and efficient compared to traditional research funding methods, and can quickly gather global financial support to provide timely funding for innovative and forward-looking research projects. In addition, the Meme serving as the carrier of DeSci can also stimulate the public's interest and participation in scientific research, creating a positive research atmosphere and promoting the transformation and application of research results.
Most notably, the newly elected US President Trump has released a Meme token named after his personal name (TRUMP), which has undoubtedly attracted a large number of outsiders' attention and capital inflows. Unlike traditional financial products, TRUMP completely bypassed centralized exchanges, relying on the power of on-chain and community, and achieved a market capitalization of hundreds of billions of dollars in a short period of time. This model not only sets an example for famous figures and enterprises to enter the crypto currency field, but also demonstrates the strong potential of decentralized finance. As a highly influential political figure, any move by Trump could have far-reaching impacts on the market. The issuance of the TRUMP token not only drove the explosive growth of the Meme sector, but may also trigger a chain reaction across the entire crypto currency industry.
For this reason, ArkStream Capital believes that MEME's prosperity in the industry is not a temporary phenomenon. As a bridge connecting Generation Z and the Web3 world, with their easy-to-understand and participatory features, they are expected to continue to exist and inject emotions and value into the market. With the successful issuance of Trump MEME, MEME will inevitably achieve deeper integration with traditional celebrities and well-known companies in the future, further expanding its influence and market potential. Therefore, ArkStream Capital is actively seeking opportunities to layout in the MEME sector. Among them, it pays special attention to and layouts two areas: one is the portal platform that provides token information and trading data, as well as the Bot products that provide trading convenience and strategy customization, and the new MEME launch platform like Pump Fun, which are the core infrastructure with actual sustainable revenue in the MEME field; the other is that MEME is gradually becoming an asset issuance method that carries the concept of fairness, many projects with actual value support are trying to use the MEME form to attract users, they adopt the concept of organic growth, low market value opening, this relatively healthy growth method also reflects the positive exploration and innovation of the primary market projects on MEME.
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