Cryptocurrency is moving towards a more mature stage, with rapid developments in areas such as on-chain finance, stablecoins, and Real World Assets (RWA). However, challenges remain in DAO governance, AI+ crypto, and Web3 gaming. Future growth will depend on technological breakthroughs and regulatory evolution. This article is based on a piece by James Morgan, organized, compiled, and written by Baihua Blockchain.
(Previous Summary: Top Ten Predictions for the 2025 Crypto AI Track: Bittensor Revival, Utility is King, Synthetic Data Surpasses Human Data..)
(Background Supplement: BNB Chain 2025 Roadmap: Enhanced Transaction Speed, AI Priority, Support for Meme Coins)
Cryptocurrency is currently in a stage that is more mature and clearer than ever before. Although there are still speculative cycles in the market, many sectors within the industry have demonstrated product-market fit (PMF) and possess practical application value beyond speculation. In contrast, some areas remain in experimental or problematic stages, with unresolved challenges hindering their widespread adoption. This article will analyze the key drivers behind large-scale adoption, explore successful niche areas, and identify those facing significant obstacles.
1. Core Technological Drivers: The Cornerstone of Cryptocurrency Growth
1) Low-cost Block Space: L2 and High Throughput L1
A major breakthrough in the crypto industry has been the significant reduction in transaction costs. The introduction of Layer 2 (L2) Rollups and high-throughput Layer 1 (L1) blockchains has enabled developers to build efficient and user-friendly applications more easily.
L2 scaling solutions—Ethereum Rollup solutions like Arbitrum (arbitrum.io), Optimism (optimism.io), and Polygon (polygon.com)—offer faster and cheaper transactions while maintaining a high degree of decentralization and openness.
High throughput L1 alternatives—such as Solana (solana.com), Aptos (aptosfoundation.org), and Sui (sui.io)—utilize parallel execution and different decentralization trade-offs to achieve fast and low-cost transactions.
Reason for Growth: The lower transaction costs have reduced the entry barriers for developers and users, accelerating the widespread adoption of areas like DeFi, gaming, and asset tokenization.
2) Wallet Upgrades and Seamless User Experience (UX)
A significant barrier to cryptocurrency adoption has been the complex onboarding process, but this issue has been greatly improved and will continue to be optimized in the coming months.
Smart contract wallets—such as Safe (safe.global) and Coinbase Wallet (coinbase-smart-wallet)—have introduced gasless transactions, automatic recovery, and multi-signature security mechanisms, while also supporting user gas fee payments and chain abstraction, greatly enhancing the user experience.
Social login and keyless authentication—tools like Web3Auth and Privy allow users to access wallets directly via email or phone number, eliminating the cumbersome management of mnemonic phrases.
Crosschain Intents—advanced wallets and DApps are integrating cross-chain infrastructure and supporting standards like EIP-7683, enabling users to seamlessly manage multi-chain assets and execute transactions through an “intention mechanism.”
Reason for Growth: Lowering interaction barriers makes it easier for non-technical users to enter, and the user experience of crypto applications is gradually aligning with traditional fintech, driving broader adoption.
2. The Landscape of the Crypto Industry in 2025: Validated Successful and Rapidly Growing Crypto Use Cases
Bitcoin ETF: A Catalyst for Institutional Entry
One of the most significant financial milestones for Bitcoin has been the approval and launch of the U.S. spot Bitcoin ETF, which has triggered a surge of institutional investment. For the first time, regulatory clarity has not hindered cryptocurrency; instead, it has propelled its development.
Institutional ETF Deployment—BlackRock, Fidelity, and Grayscale have launched regulated Bitcoin and Ethereum ETFs, making it easier for hedge funds, pension funds, and retail investors to gain compliant exposure to crypto assets.
Capital Inflow—These ETFs have attracted billions of dollars in capital, further solidifying Bitcoin’s position as a new asset class within the financial industry, particularly appealing in the current uncertain market environment.
Recognition from Traditional Finance—ETFs enable institutions to hold Bitcoin and Ethereum in a compliant and tax-efficient manner, akin to the adoption model of early gold ETFs. In the coming years, more cryptocurrency-based ETFs will inevitably be launched.
Reason for Growth: Bitcoin is now viewed as “digital gold,” while Ethereum may be likened to “yield-bearing bonds.” The broad institutional interest validates its value as a long-term hedge against inflation and fiat currency instability. With increasingly clear regulatory frameworks, institutional confidence in entry rises, bringing more liquidity, broader adoption, and deeper integration of the crypto industry with traditional finance.
3. Stablecoins: “Killer” Applications in the Payment Sector
Stablecoins have become the most widely used financial products in the cryptocurrency field, effectively addressing real-world issues and inefficiencies in payments and cross-border remittances.
Circulation Scale Exceeds $220 Billion—USDT (tether.to) and USDC (circle.com) dominate global crypto payment transactions.
Payments and Remittances—Applications like Strike (strike.me) utilize stablecoins for instant cross-border transfers with nearly zero fees, greatly reducing international payment costs.
Traditional Finance (TradFi) Adoption—Coinbase connects TradFi with DeFi through Base, PayPal has launched PYUSD, and major banks are exploring the application of tokenized deposits.
Superior Payment Networks—SpaceX uses USDC for processing payments for Starlink customers, especially in countries with high currency volatility, evading foreign exchange risks and optimizing payment processes through stablecoins.
Reason for Growth: Stablecoins offer faster, cheaper, and more efficient ways of transferring funds, possessing inherent advantages over traditional banking systems. Ultimately, users may not realize which payment network they are using, but stablecoins will undoubtedly replace traditional, slow, and inefficient payment infrastructures.
4. DeFi: The Cornerstone of On-Chain Finance
Despite facing security vulnerabilities and market volatility, DeFi protocols remain the core pillar of on-chain finance and continue to grow. I firmly believe in DeFi’s significant advantages in permissionless, decentralized, and equitable financial services.
On-chain Lending—Protocols like Aave and Compound provide instant, permissionless credit markets without the need for traditional financial institutions’ involvement.
Automated Market Makers (AMM)—Decentralized trading protocols like Uniswap and Curve handle billions of dollars in transactions daily without intermediaries, enhancing market liquidity.
Tokenization of Real World Assets (RWA)—Ondo Finance and Maple Finance bring traditional financial assets on-chain, creating a more efficient financial infrastructure.
Reason for Growth: DeFi offers a faster, more efficient, and globally accessible financial system while providing higher yields than traditional banks. Composability enables more flexible capital movement, driving the continuous emergence of innovative financial models that can also integrate with existing financial concepts to create new growth points.
5. Tokenization of Real World Assets (RWA)**Tokenization: The Future Adopted by Institutions**
RWA (Real World Assets) is one of the areas of greatest interest to institutions, as major financial entities actively tokenize assets such as bonds, real estate, and secured credit, facilitating the migration of traditional finance onto the blockchain.
**Secured Credit & Bonds** — Companies like Centrifuge (centrifuge.io) are tokenizing debt instruments, lowering financing thresholds and making capital more accessible.
**Fractional Ownership** — Relevant platforms allow users to hold shares in real-world assets like real estate, reducing investment barriers and increasing market liquidity.
**Collectibles as RWA** — Platforms like Courtyard.io support the custody, tokenization, and trading of physical assets, making the collectibles market more transparent and tradable.
**Growth Reasons**: Bringing traditional financial assets onto the blockchain makes capital markets more liquid, efficient, and transparent, creating new opportunities for institutional investors.
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**6. Memecoins: Turning Speculation into “Function”**
Despite facing criticism, Memecoins remain one of the most enduring speculative assets in the crypto market, continuously attracting funds and attention.
**Emergence of Hype Tokens** — Memecoins like PEPE, DOGE, and SHIBA have market capitalizations reaching billions of dollars, with thousands of new meme tokens emerging daily.
**Trading Volume Surpassing “Serious” Tokens** — At certain times, the trading volume of Memecoins has even surpassed that of mainstream crypto assets, with involvement from presidents and their teams boosting market sentiment.
**Growth Reasons**: Speculation is a human instinct, and Memecoins cleverly blend viral dissemination, cultural resonance, and “gamified” trading experiences, making the crypto market more entertaining. “Meme Tokens” and “Meme Infrastructure” will continue to undergo cycles of rise and fall, becoming an undeniable part of the ecosystem.
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**7. Digital Product Passports (DPPs) and Commodity Tokenization**
Luxury brands and enterprises are leveraging blockchain-based verification systems to enhance product authenticity and supply chain transparency.
**DPP as a Service (DPPaaS)** — Platforms like Arianee and Crossmint are driving the development of DPP solutions, while several non-blockchain DPP service platforms (DPaS) are also entering the competition.
**Luxury Brands Leading the Trend** — Luxury brands such as LVMH, Prada, Breitling, and Cartier have been early adopters of DPP technology, pushing the entire high-end consumer goods sector towards blockchain verification.
**EU Regulation Promoting Mass Adoption** — The EU’s DPP regulatory framework is a significant driver of growth in this area. However, if the EU relaxes regulations, this process may be delayed. Regardless of regulatory changes, blockchain remains the ideal technological support for product passports (DPP) in various scenarios such as authenticity verification and traceability.
**Growth Reasons**: Businesses require transparent, anti-counterfeiting product tracking systems, and upcoming regulations (such as the EU’s DPP initiative) are accelerating the adoption of this trend.
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**8. Persistent Problem Areas**
Despite certain sectors in the crypto industry proving their value, some areas remain uncertain, overhyped, or in early experimental stages. These sectors face technological, regulatory, or adoption challenges, making large-scale mainstream adoption difficult until these issues are resolved.
**DAO (Decentralized Autonomous Organization)** — Low governance participation, inefficient decision-making, and chaotic fund management remain major pain points for DAOs. While DAOs like ENS and Gitcoin operate well, most DAOs still struggle to find a balance between decentralization and governance efficiency. I am optimistic about the combination of AI and DAOs as a potential solution — ironically, DAOs may need AI to truly demonstrate their value and even expose the true nature of decentralized governance.
**AI & Crypto** — Aside from speculative hype, current practical applications of AI + crypto are still limited. Although decentralized AI projects like Bittensor and Render Network are intriguing, they remain niche, and most AI tokens’ adoption is still limited to low-value applications like meme AI robots. The intersection of AI and crypto requires groundbreaking practical use cases for a true explosion.
**Gaming & Metaverse** — Web3 gaming has yet to deliver on its promises, with Play-to-Earn models nearly extinct, and the integration of blockchain has instead diminished the gaming experience. The hype surrounding the metaverse has cooled, and the failures of high-profile projects (such as Meta’s VR strategic shift and the stagnation of Decentraland) indicate that users are unwilling to enter virtual worlds merely for the sake of the “metaverse.” However, I still look forward to the development of AR (augmented reality) glasses, which may bring about a mixed “meta-metaverse” experience, driving a new wave of exploration in the industry.
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**9. Final Thoughts: What’s Next?**
As the crypto industry continues to evolve, the next wave of growth is likely to be driven by significant technological breakthroughs, regulatory changes, and emerging narratives. Here are some reflections on the future…
**On-Chain Finance Will Further Expand Its Suite** — Stablecoins continue to grow rapidly, and the tokenization of RWA will merge traditional capital markets with DeFi, potentially attracting trillions of dollars in institutional capital. A key issue will be the pace of regulatory progress, which will determine whether this transformation can truly materialize.
**The Role of Bitcoin Will Change** — With ETFs attracting institutional investment, Bitcoin may gradually encroach upon the global digital reserve asset market, or it may remain merely a value storage tool lacking scalability, eventually being supplanted by more functional blockchains.
**Staking ETH ETFs Will Disrupt Traditional Finance (TradFi)** — Once ETFs supporting staking yields are launched, Ethereum could become the first cryptocurrency viewed as a “yield-bearing asset,” altering portfolio structures and posing a direct challenge to the bond market.
**Identity Verification Will Become a Key Area** — With the explosive growth of AI deepfakes, fraud, and robotic activities, crypto-native identity solutions (zero-knowledge proofs, WorldCoin, DID standards) will either gain widespread adoption or become regulatory nightmares. If the latter occurs, we could become “digital puppets” of AI or governments and corporations.
**Tokenization of Commodities & Consumer-Level Adoption** — Can NFTs transcend their collectible nature and integrate into real business scenarios? If brands and enterprises can successfully deeply integrate DPP (Digital Product Passports) and create sufficient value for users, blockchain may quietly become the infrastructure of the retail e-commerce sector.
**Memecoins and Speculation Will Not Disappear** — Despite being controversial, Memecoins demonstrate the essence of the crypto market: speculation, community-driven dynamics, and viral narratives. In the future, they may evolve into a new form of social finance, or they may simply remain an endless cycle of hype. Regardless, I will not easily bet against the failure of the casino.
The next few years will determine whether cryptocurrencies fully integrate into the global financial system or continue to exist as a high-risk, high-reward “niche market.” Which narratives will dominate the next cycle? The answer is still being written.
