The continuously growing stablecoin market will attract more developers and builders, potentially leading to the emergence of new DeFi primitives from the ecosystem.
Author: Poopman, IOSG
Compiled by: Deep Tide TechFlow
The author of this article is a cryptocurrency enthusiast who has also had luck with Memecoins and is now exploring legitimate investment opportunities for 2025, so I can explain to my dad that I am engaged in a serious industry.
These are just my personal views on the market and do not represent the opinions of the team or IOSG Enterprises.
Things I will mention in the article:
The cryptocurrency market in 2024;
What comes after Memecoins;
Things I will focus on if the market remains bearish;
2024, the year of Bitcoin and Solana
2024 will be a brutal year unless you are a super player or trench warrior of BTC. Venture capital, liquidity, diamond hands, and true believers have been destroyed, and the future of cryptocurrency looks even bleaker as AI explodes.
BTC reaches $100,000, ETF approval, BTC dominance hits 60%, and TradFi adoption accelerates. 2024 is indeed the year of BTC.
Solana, the tokenized platform. At its peak, SOL's daily trading volume was $36 billion, accounting for about 10% of Nasdaq's average daily trading volume, which is huge for cryptocurrency. Memecoins / AI coins made this possible.
Hyperliquid is a dark horse in this market. They rejected venture capital, which is a bold move, and their approach adopted after the airdrop proved the strong demand for non-KYC perpetual trading and "thick" platform liquidity.
XRP, ADA, any Dino coins. Well, Uber drivers and the U.S. government seem to love them, so I’ll give them that.
Other than that, I don’t remember any pump in this market lasting more than two weeks.
2025, from casinos to new DeFi + U.S. cryptocurrency
After TRUMP's decline, I found that market profits did not flow back into AI tokens. Therefore, I converted all assets into stable assets except for a portion of my SOL position (which now seems a bit foolish).
It has become increasingly clear that after months of PVP, people are tired of Memecoins and AI virtual software.
The entire AI sector has been destroyed, with most tokens down 70-80% from their peaks.
The $LIBRA event actually determined the fate of this story.
In simple terms, Pumpfun is going to zero.
So where has all the Memecoin money gone?
Due to a lack of foreseeable catalysts, the wealth effect of Memecoins is gradually fading, creating a vicious cycle that drives players away from Memecoins.
Meanwhile, in today’s cryptocurrency market:
The crypto space lacks breakthrough innovations
Existing altcoins continue to stagnate, with ETH in trouble
Fundamentals suddenly no longer matter
Old Memecoins have perished
The survival rate of newly listed tokens is low, with only a few tokens able to last more than 2 weeks.
This sounds very pessimistic, right?
In this calm situation, I believe investors will prefer "safe-haven" investments, which is why I believe that by 2025, most funds will flow into fiat-backed stablecoins.
Some of them hope to leverage their assets to earn some passive income.
Thus, yield-generating "stable" options, such as USDe or USDS, are very attractive to them.
Stablecoins are the new oil.
https://app.rwa.xyz/stablecoins
Despite the AI and Meme markets being hit hard, the TVL of stablecoins continues to grow steadily, with a month-on-month increase of 3%, and as of the writing of this article, the TVL has exceeded $220 billion.
People want safety and reliability. They choose fiat-backed stablecoins. USDT and USDC maintain a 90% market dominance, largely due to their widespread adoption across various exchanges and payment platforms.
Those wanting to use stablecoins will opt for yield-generating/decentralized stablecoins. For example, USDe, USDS, DAI, and USD0. So far, this sector only occupies >10% of the market share, but they have actually had an amazing year, with total TVL growing by over 70%.
Well, I won’t ramble on. The current situation is:
90% fiat-backed stablecoins
10% yield-stable
I believe there is still room for new stablecoins (yield) to develop because:
1/ Yield-bearing "low-volatility options" are always attractive to cryptocurrency enthusiasts.
2/ New stable mechanisms and capital efficiency strategies can be innovated to improve yields.
3/ Stablecoins have found PMF in cryptocurrency, serving both as currency and as investment tools.
This is the outline of my 2025 crypto plan.
My 2025 "bearish" cryptocurrency plan
If there is no innovation/narrative in 2025, I believe the market will have two directions:
The growing stablecoin market drives DeFi innovation
Support for crypto policies, vigorously promoting "Made in America" crypto technology.
1. Stablecoins and new DeFi innovations
In the next 3-6 months, more stablecoins will emerge with dollar-based tokenization strategies aimed at generating competitive yields using different types of collateral or strategies.
Given their composability and stable "price stability," they can easily collaborate with different DeFi protocols and create synergies. Existing DeFi integration examples include:
Interest rate swap-related products like @pendlefi, @spectrafinance are great designs that allow users to speculate on asset yields, effectively creating new markets for YG assets (including stablecoins).
Money markets like @MorphoLabs, @0xfluid can achieve leveraged yield farming, contributing significantly to economic activity for stablecoins.
DEXs like @CurveFinance also provide a good place for guiding stable liquidity, etc.
Among them, my favorite innovations are those that create new asset classes, such as Pendle's YT-USDe, which creates a new market on top of yield "Legos," providing an additional layer of yield for stable yielders.
In addition to yield optimization, I also hope to see some innovations in CDP design, particularly ideas that can eliminate over-collateralization and minimize liquidation risks, allowing decentralization to become stable again.
After all, I expect to see more innovations emerge in the growing stablecoin market, as this is where more and more funds will flow.
2. Supportive crypto policies drive U.S. crypto development.
Recently, Trump announced an attempt to promote a crypto strategic reserve plan, which includes a basket of "Made in America" currencies like SOL, XRP, etc.
While it remains uncertain whether the crypto reserve will gain government approval, Trump's influence on the crypto market cannot be ignored.
Some examples of Trump's supportive stance on cryptocurrency include:
Firing Gary Gensler on the first day.
Retaining all BTC seized by the U.S. to establish a "national strategic BTC reserve" (for example, Silk Road BTC is one such case).
Launching the WiFi DeFi fund, introducing TRUMP, which is very suitable for crypto.
The SEC withdrawing charges against exchanges and cryptocurrency projects, such as Coinbase, Uniswap, Kraken.
Additionally, Trump's team may nurture the domestic cryptocurrency industry. Therefore, we can expect more favorable regulations for a basket of U.S. currencies or conspiracy groups.
NFA, but I will closely monitor these tokens as Trump's influence is significant.
Conclusion
As mentioned earlier, this is just a brainstorming and intuitive topic. These views are not statistically supported. So please do not take it as alpha.
In any case, here is a summary for those too lazy to read:
Given the lack of cryptocurrency innovation and market enthusiasm, if the market remains "bearish" in 2025, I expect demand for stablecoins to increase.
Assuming investors want to put their stablecoins to use, I estimate that yield-generating stablecoin products could occupy 20-30% of the entire stablecoin market in the long run (like stETH).
This growing stablecoin market will attract more developers and builders, potentially leading to the emergence of new DeFi primitives from the ecosystem.
In the long run, Trump's pro-crypto policies are favorable for the cryptocurrency industry.
Additionally, his policies may benefit the development of domestic cryptocurrencies.
Therefore, it makes sense to monitor U.S. crypto tokens, as some "news" can already push tokens to new heights.
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