The landscape of the crypto race in 2025: which are feasible and which are not?

Cryptocurrency is moving towards a more mature stage, with rapid development in areas such as on-chain finance, stablecoins, and RWA, but challenges remain in DAO governance, AI + crypto, and Web3 gaming. Future growth will depend on technological breakthroughs and regulatory evolution.

Author: James Morgan

Translation: Baihua Blockchain

Cryptocurrency is now in a more mature and clearer stage than ever before. Although there are still speculative cycles in the market, many areas within the industry have demonstrated product-market fit (PMF) and possess practical application value beyond speculation. However, other areas remain in experimental or problematic stages, with unresolved challenges hindering their widespread adoption.

This article will analyze the key drivers of mass adoption, explore successful subfields, and discuss those that still face 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 is the significant reduction in transaction costs. The introduction of scalable Layer 2 (L2) Rollups and high-throughput Layer 1 (L1) blockchains has made it easier for developers to build efficient and user-friendly applications.

L2 Scaling Solutions — Ethereum Rollup solutions, such as Arbitrum (arbitrum.io), Optimism (optimism.io), and Polygon (polygon.com), offer faster and lower-cost transactions while maintaining high levels of decentralization and openness.
High Throughput L1 Alternatives — Solana (solana.com), Aptos (aptosfoundation.org), and Sui (sui.io) utilize parallel execution and different decentralization trade-off strategies to achieve high-speed, low-cost transactions.
Growth Reason: Lower transaction costs reduce the entry barriers for developers and users, accelerating the adoption of 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 greatly improved and will continue to be optimized in the coming months.

Smart Contract Wallets — Smart wallets like 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 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 "intents mechanism."
Growth Reason: 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: Validating Successful and Rapidly Growing Crypto Use Cases

Bitcoin ETF: A Catalyst for Institutional Entry

One of the most important financial milestones for Bitcoin is the approval and launch of the U.S. spot Bitcoin ETF, which has triggered significant institutional investment. For the first time, regulatory clarity has not hindered cryptocurrency but rather propelled its development.

Institutional ETF Layout — 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 Influx — These ETFs have attracted billions of dollars in capital, further solidifying Bitcoin's status as a new asset class in the financial industry, especially appealing in the current uncertain market environment.
Recognition from Traditional Finance — ETFs allow institutions to hold Bitcoin and Ethereum in a compliant and tax-efficient manner, similar to the adoption model of early gold ETFs. In the coming years, more crypto-based ETFs will inevitably be launched.
Growth Reason: Bitcoin is now viewed as "digital gold," while Ethereum may be likened to "yield-bearing bonds." The widespread interest from institutions validates its value as a long-term hedge against inflation and fiat currency instability. As the regulatory framework becomes clearer, the sense of security for institutional entry increases, bringing more liquidity, broader adoption, and deeper integration of the crypto industry with traditional finance.

3. Stablecoins: The "Killer App" in Payments

Stablecoins have become the most widely used financial product in the cryptocurrency space, effectively addressing real-world problems 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 almost zero fees, significantly 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 to process payments for Starlink customers, especially in countries with high currency volatility, avoiding foreign exchange risks and optimizing payment processes through stablecoins.
Growth Reason: Stablecoins provide a faster, cheaper, and more efficient way to transfer funds, possessing inherent advantages over traditional banking systems. Ultimately, users may not even 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.
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, achieving a more efficient financial infrastructure.
Growth Reason: DeFi offers a faster, more efficient, and globally accessible financial system while providing higher yields than traditional banks. Composability allows for more flexible capital flows, driving the emergence of innovative financial models while integrating with existing financial concepts to create new growth points.

5. Tokenization of Real-World Assets (RWA): The Future of Institutional Adoption

RWA is one of the areas of greatest interest to institutions, as **major financial institutions are actively tokenizing assets such as *bonds*, real estate, and raised *credit*, driving the migration of traditional finance on-chain.

Raised Credit & Bonds — Companies like Centrifuge (centrifuge.io) are tokenizing debt instruments, lowering financing barriers and making capital more accessible.
Fractional Ownership — Relevant platforms allow users to hold shares of real-world assets like real estate, lowering investment thresholds 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 Reason: Bringing traditional financial assets on-chain makes capital markets more liquid, efficient, and transparent, creating entirely new opportunities for institutional investors.

6. Memecoins: Turning Speculation into "Function"

Despite criticism, memecoins remain the most enduring speculative assets in the crypto market, continuously attracting funds and attention.

Rise of Popular 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 Reason: Speculation is a human instinct, and memecoins cleverly blend viral spread, cultural resonance, and a "gamified" trading experience, making the crypto market more entertaining. "Meme tokens" and "meme infrastructure" will continue to rise and fall in the market, becoming an indispensable part of the ecosystem.

7. Digital Product Passports (DPPs) and Commodity Tokenization

Luxury brands and companies 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, with several non-blockchain DPP service platforms (DPaaS) 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 industry towards blockchain verification.
EU Regulation Driving Mass Adoption — The EU's DPP regulatory framework is a significant driver of growth in this field. 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 authenticity verification, traceability, and other scenarios.
Growth Reason: Companies need transparent and anti-counterfeiting product tracking systems, and upcoming regulations (such as the EU's DPP plan) are accelerating the adoption of this trend.

8. Areas with Ongoing Issues

Although certain areas of the crypto industry have proven their value, some sectors remain uncertain, overly hyped, or in early experimental stages. These areas face technical, regulatory, or adoption challenges, making large-scale proliferation difficult until these issues are resolved.

DAO (Decentralized Autonomous Organizations) — 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, there are still limited practical application cases for AI + crypto. While decentralized AI projects like Bittensor and Render Network are interesting, they remain niche, and most AI tokens' adoption is still limited to low-value applications like meme AI bots. The intersection of AI and crypto still requires breakthrough practical use cases to truly explode.
Gaming & Metaverse — Web3 gaming has yet to deliver on its promises, with the Play-to-Earn model nearly extinct, and the integration of blockchain has instead diminished the gaming experience. The hype around the metaverse has cooled, and failures of high-profile projects (such as Meta's VR strategic shift and Decentraland's stagnation) indicate that users are not willing to enter the virtual world 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 round of exploration in the industry.

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 thoughts on the future…

On-Chain Finance Will Further Expand — Stablecoins continue to grow rapidly, and RWA tokenization will merge traditional capital markets with DeFi, potentially attracting trillions of dollars in institutional funds. The key issue is the speed of regulatory progress, which will determine whether this transformation can truly take place.
The Role of Bitcoin Will Change — As ETFs attract institutional investment, Bitcoin may gradually eat into the global digital reserve asset market share, or it may still just be a value storage tool lacking scalability, replaced 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 bot activities, crypto-native identity solutions (zero-knowledge proofs, WorldCoin, DID standards) will either gain widespread adoption or become a regulatory nightmare. If the latter occurs, we may become "digital puppets" of AI or governments and corporations.
Tokenized Goods & Consumer Adoption — Can NFTs break through their collectible attributes and integrate into real business scenarios? If brands and companies can successfully integrate DPP (Digital Product Passports) deeply 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 have proven the essence of the crypto market: speculation, community-driven initiatives, and viral narratives. In the future, they may evolve into a new form of social finance or simply remain in an endless cycle of hype. Regardless, I will not easily bet on the failure of the casino. The next few years will determine whether cryptocurrency fully integrates into the global financial system or continues to exist as a high-risk, high-reward "niche market." Which narratives will dominate the next cycle? The answer is still being written.

Article link: https://www.hellobtc.com/kp/du/02/5677.html

Source: https://medium.com/blockchain-manchester/the-crypto-landscape-in-2025-whats-working-and-what-s-not-702ad3bf3783

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