Original title: After the Casino| My “Bearish” 2025 Crypto Plan
Original author: poopmandefi, a researcher at IOSGVC
Original compilation: ChatGPT

Editor’s note:This article discusses the possible direction of the cryptocurrency market in 2025, especially in the light of a lack of innovation, where market demand for stablecoins may increase. The author believes that if the market continues to be bearish, income-generating stablecoin products may account for 20-30% of the stablecoin market. As the stablecoin market grows, more developers and new DeFi innovations are likely to emerge. In addition, Trump’s policy of supporting cryptocurrencies will help the development of the U.S. crypto industry, and investors should pay attention to the potential of U.S. crypto tokens.

The following is the original content (the original content has been compiled for ease of reading and understanding):

Disclaimer: This is just the author’s personal view of the market for two cents.

What is mentioned in the article:

·Cryptocurrency market in 2024

·What is the next step after MEME coin

·What I will focus on if the market remains bearish

2024, the year of Bitcoin and Solana

2024 is cruel, unless you are a loyal supporter of BTC or a warrior fighting on the front lines. Venture capital, liquidity, diamond hands and true believers have all been destroyed, and with the explosion of AI, the future of cryptocurrency markets looks even darker.

·Solana, a tokenization platform. At its peak, SOL’s daily trading volume reached US$36 billion, approximately 10% of NASDAQ’s average daily trading volume, which is huge for cryptocurrencies. Trends in MEME and AI coins have contributed to all this.

·Hyperliquid is the BBH in this market. They took a bold move by rejecting venture capital funding, and their post-airdrop adoption demonstrated the strong need for non-KYC perpetual trading and “thick” platform liquidity.

·XRP, ADA, any Dino coins. Uber drivers and the U.S. government seem to like them, so I give them an affirmation.

Other than that, I can’t think of any gains in this market that exceed 2 weeks.

2025, from casinos to new DeFi and U.S. cryptocurrencies. After Trump Trump fell, I observed that market profits did not flow back into AI tokens. So I converted everything except some SOL positions (stupid decision) into stablecoins.

It is becoming increasingly clear that after months of player versus game (PVP), people are tired of MEME coins and AI castles in the air. The entire AI field has been wiped out, with most tokens down by 70-80% from their peak, and the libra incident almost doomed the fate of this narrative.

In short, Pumpfun will go to zero.

So, where did all the money in MEME coins go?

Without a clear catalyst for MEME coins, the wealth effect is fading, leading to a downward spiral that pushes players away from MEME coins. At the same time, in today’s cryptocurrency market:

·Lack of breakthrough innovation

·Existing altcoins continue to stagnate and ETH is also in trouble

·Fundamentals suddenly become unimportant

·The old MEME coin has died

·Newly listed tokens have low survival rates, with only a few tokens lasting more than 2 weeks

That does sound bearish, right? In this case, I think investors will be more inclined to choose a “risk-averse” investment method, which is why I believe that most of the funds will flow into stablecoins backed by fiat currencies in 2025.

Some of them may want to use their assets to make some passive gains through stablecoins.

Therefore,”stablecoins” that generate revenue, such as USDe or USDS, will be very attractive to them.

·stablecoins are the new oil.

While the AI and MEME markets were destroyed, the total value of stablecoins continued to grow steadily, with a monthly growth rate of 3%. As of now, TVL has exceeded US$220 billion.

Those who want safety and security choose stablecoins backed by legal currencies. The USDT and USDC maintain their 90% market dominance almost unshakable thanks to their widespread adoption on different exchanges and payment platforms.

Those who want their stablecoins to work choose income-generating/decentralized stablecoins. For example, USDe, USDS, DAI, USD0, etc. So far, this segment has only accounted for more than 10% of the market, but they have actually had an amazing year with total TVL growth of more than 70%.

Okay, let me get this straight. The current market pattern is:

90% of fiat currencies support stablecoins

10% revenue-generating stablecoin

I believe there is still room for growth in income-generating stablecoins because:

1. “Low volatility options” combined with benefits will always be very attractive to people in the crypto world.

2. Innovation may emerge in new stability mechanisms and capital efficiency strategies to drive higher returns.

3. stablecoins have found a product-market fit in cryptocurrencies, and are both currency and investment tools.

Therefore, this also formed my 2025 cryptocurrency plan.

My 2025 “Bear” Cryptocurrency Plan

If there are no innovations or new narratives in 2025, I believe the market will go in two directions:

·New DeFi innovations driven by the growing stablecoin market

·Policies that support cryptocurrencies promote “Made in America” cryptocurrencies

1. stablecoins and new DeFi innovation

Over the next 3-6 months, more and more stablecoins will be introduced as dollar-based tokenization strategies, designed to generate competitive benefits through different types of collateral or strategies.

Given the composability and “price stability” of stablecoins, they can easily work with different DeFi protocols and create synergies between each other.

Examples of existing DeFi integrations include:

Interest rate swap-related products such as pendant fi and spectra finance are great designs that allow users to speculate on asset returns, effectively creating new markets for income-generating assets, including stablecoins.

Currency markets like MorphoLabs, 0xfluid and others also provide leveraged income farms that drive stablecoins ‘economic activity.

DEXs such as CurveFinance also provide a good place to launch the liquidity of stablecoin pairs.

Among all these innovations, my favorite are those that create new asset classes, such as Pendle’s YT-USDe, which creates a new market on top of the revenue Lego and provides stablecoin enthusiasts with an additional revenue layer.

In addition to revenue optimization, I would also like to see some innovations in CDP design, especially ideas that remove excessive collateral and minimize liquidation risks, which can give a new lease of life to decentralized stablecoins.

After all, I expect more innovation to emerge as the stablecoin market grows because this is where money will flow in.

2. Policies that support cryptocurrency promote U.S. cryptocurrency

Recently, Trump announced an attempt to promote a crypto strategic reserve plan that includes a basket of “Made in the United States” currencies such as SOL, XRP, etc.

Although there is still uncertainty about whether cryptocurrency reserves will be approved by the government, Trump’s impact on the cryptocurrency market cannot be ignored.

Here are a few examples of Trump’s support for cryptocurrencies:

1. Fire Gary Gensler immediately.

2. Keep all bitcoins confiscated by the United States and create a “strategic country bitcoin reserve”(for example, Bitcoin on the Silk Road is an example).

3. Launched the WiFi DeFi Fund and launched Trump Coin, which is very consistent with the native attributes of cryptocurrency.

4. The U.S. Securities and Exchange Commission (SEC) has dropped charges against exchanges and crypto projects such as coinbase, Uniswap, krakenfx, etc.

In addition, the Trump team is likely to support the domestic cryptocurrency industry. Therefore, we can expect more regulatory policies that will benefit U.S. local cryptocurrencies.

This is not investment advice, but I will pay close attention to these tokens because Trump has a lot of influence.

Summary:

As mentioned earlier, this is just a brainstorming and intuitive discussion, and the above views are not supported by statistics. So please don’t use it as investment advice.

Given the lack of innovation in cryptocurrencies and the downturn in the market, if the market remains “bearish” in 2025, I expect demand for stablecoins to increase. Assuming investors want their stablecoins to generate yields, I estimate that income-generating stablecoins products could account for 20-30% of the stablecoin market in the long term (similar to stETH).

This growing stablecoin market will attract more developers and builders, potentially leading to the birth of new DeFi infrastructure in the ecosystem, and Trump’s pro-cryptocurrency policy will have a positive impact on the market in the long run.

At the same time, his policies may benefit the development of local cryptocurrencies. Therefore, it makes sense to pay attention to U.S. local cryptocurrency tokens, because some “news” is enough to cause token prices to soar.

“Original link”