The AI Boom, Bitcoin's Dominance, and the Return of Infrastructure: 2025 Crypto Market Outlook

In early 2024, the crypto market experienced significant volatility. After the approval of the Bitcoin ETF, there was a "sell the news" pullback, but the overall trend remains positive. With Trump potentially being elected president again, expectations for crypto-friendly policies are heating up. Meanwhile, the AI narrative continues to evolve, becoming one of the main forces driving the market.

Is the AI bubble about to arrive?

Industry insiders generally believe that AI may become one of the biggest bubbles in financial history by 2025. Currently, while the fundamentals of AI-related projects are strong, valuations may already be too high. Some viewpoints suggest:

• AI itself will become the biggest narrative of 2025, possibly achieving general artificial intelligence (AGI).
• The best way for ordinary investors to participate in the AI narrative is through encryption AI projects.
• The current crypto AI market size is approximately 50 billion USD and may continue to grow in the future.
• The AI bubble has not really arrived yet, but it is almost inevitable.
• There is still a large amount of capital in the market that remains skeptical about AI and has not entered the market.

However, the moat of AI projects is not solid. Currently, the main moats are attractiveness and the ability to serve as a launch platform, but this advantage can be easily surpassed by new projects. In the future, there may be brutal capital rotations, and investors need to flexibly adjust their strategies.

End of the Meme coin Era?

With the rise of AI narratives, traditional Meme coins are losing their appeal. Experts believe that:

• Most of the funds in the crypto market in 2025 may flow to AI projects.
• AI agent Meme is superior to traditional Meme in some aspects.
• The market is tired of traditional Memes, and investors are more inclined towards projects with actual value.
• Some OG Meme coins like DOGE may still have room for growth.
• In the long run, apart from a few projects that have reached "escape velocity", it is difficult for projects lacking actual business support to sustain.

Infrastructure Value Reversion

As the market matures, investors are beginning to pay attention to projects that have real business support and reasonable fundamentals. Experts point out that:

• Infrastructure projects that can generate actual income are gaining more attention.
• Solana stands out in revenue metrics, accounting for 56.8% of the total income in the crypto market.
• If Solana can achieve 80% on revenue metrics by the end of the year, it may challenge the status of ETH.
• 应用特定排序(app-specific sequencing)可能是未来发展趋势
• Chain Abstraction ( While it enhances user experience, it cannot completely replace shared state.

L2 Ecosystem and Bitcoin Outlook

The Ethereum L2 ecosystem made significant progress in 2024, with the total locked value ) TVL ( growing from 22 billion to 40 billion US dollars. Looking ahead:

• In 2025, large financial institutions may launch their own L2.
• Bitcoin L2 may become a dark horse, bringing scalability and programmability.
• If the OP_CAT function is enabled, it can achieve trustless bridging of Bitcoin.
• The Bitcoin L2 market size may reach 50 billion USD.

Regarding Bitcoin's dominance, experts predict:

• Bitcoin may continue to outperform Ethereum in 2025
• If the price of Bitcoin reaches $125,000-$150,000, BTC's dominance may return to 62%-63%.
• The traditional concept of "shanzhai coin season" may be outdated
• Projects with strong fundamentals and a clear narrative will perform significantly.

Overall, the crypto market in 2025 will place greater emphasis on fundamentals and real-world applications. AI, infrastructure, and Bitcoin L2 may become major growth areas, while projects lacking substantial support may gradually lose market favor.