As a seasoned crypto investor with a decade of experience navigating the rollercoaster ride that is the blockchain industry, I can confidently say that 2025 is shaping up to be the year of the great blockchain leap forward.
I remember back in 2023 when everyone was talking about private blockchains and how they were going to revolutionize the world. Fast-forward a couple of years, and it’s clear that the future belongs to public networks like Ethereum. The regulatory environment is becoming more favorable, interest rates are dropping, and DeFi tools are becoming more popular again. It’s like we’ve hit the crypto version of the 1990s internet boom!
Competition inside the blockchain ecosystem is already fierce, and it’s only going to get more intense in 2025. I’ve lost count of all the big firms that are jumping into the market, offering stablecoins, real-world assets, or even bitcoin and eth trading. It’s enough to make you wonder if these companies have been watching too many episodes of “Shark Tank”!
But with great opportunity comes great risk, and I predict 2025 could be a fabulous year for fraud. The carnival atmosphere of online trading combined with regulatory loosening is going to attract the same grifters that showed up during the last crypto boom. So, keep your wallets close and your eyes open!
In closing, I’d like to leave you with a little joke: How many blockchain developers does it take to change a lightbulb? None – they just tokenize the darkness and let the smart contract handle the rest! Happy New Year and have a great 2025!
On November 6th, I penned a memo to EY’s blockchain executive group, with the title that was straightforward: “Every private blockchain is obsolete now.” Since last November, the cryptocurrency and blockchain sectors have been marked by cautiousness and gradual recuperation. The trend has been steady and optimistic, but slow, particularly in 2023.
2024 marked a consistent, gradual buildup momentum in the crypto space. The year commenced with the introduction of Bitcoin’s exchange-traded fund (ETF), and this pace picked up steam as we moved forward with an Ethereum ETF and the implementation of the European Union’s Markets in Crypto Assets (MiCA) regulation.
Our trajectory was moving towards consistent worldwide regulations for various cryptocurrencies and digital assets, with guidelines established for all significant types. Simultaneously, we were progressing towards the widespread adoption of public blockchains. Bitcoin can be likened to digital gold, while Ethereum serves as a development ground for digital assets and related services.
Although the progression had been steady, it was cautious. Regularly, I’d hear individuals from significant financial institutions express interest in transitioning to public Ethereum, only to mention their hesitation due to regulatory restrictions. However, post the U.S. election on November 5, the potential for significant regulatory adjustments became a tangible reality. Any clarity about what regulators might permit or prohibit was swiftly lost, and there was an abrupt increase in speed towards public networks, suggesting a dramatic change in direction.
Based on my personal and professional experiences, I firmly believe that change is inevitable, especially when it comes to regulatory environments. As someone who has navigated through various economic cycles and regulatory shifts over the past few decades, I can attest to their transformative impact. In light of this, I am convinced that by 2025, we will witness a significant transformation in the U.S. regulatory landscape. This change will not only ripple through our domestic economy but also create a domino effect globally, albeit at varying paces across different regions.
Given the United States’ status as the world’s largest financial market, this shift holds immense weight and influence. As such, it is essential to remain vigilant, adaptable, and proactive in understanding these changes and their potential implications for both our businesses and personal investments. Preparing for the future means embracing change and being open to new opportunities that may arise as a result of this transformative period.
As an analyst, I find myself in agreement with the notion that Bitcoin has already proven itself to be a significant player in the financial landscape. It’s increasingly assuming the digital equivalent of gold, and by 2025, it might officially step into this role for countries and governments as they begin to strategically accumulate Bitcoins as reserves. In my previous projections, I predicted Bitcoin would continue its growth trajectory until it matches or surpasses gold’s current market cap of approximately $14 trillion. From my perspective, Bitcoin presents a more appealing investment proposition due to its scarcity-based nature. Unlike physical gold, the value of Bitcoin doesn’t lead to increased supply – making it an enticing choice for investors seeking assets with limited quantities.
In simpler terms, Ethereum is expected to be a major victor due to its successful transition to proof-of-stake, significantly reducing carbon emissions by more than 99%. Additionally, Ethereum has experienced substantial growth in capacity, with its network (consisting of the mainnet and Layer 2 networks) now capable of several hundred times the capacity it had during previous market bull runs. Transaction fees are currently low and are predicted to remain so for a while. The advantages of enormous scalability, low costs, exceptional security, and excellent uptime make Ethereum an attractive choice for most digital asset issuers.
In 2025, the most significant surge we might encounter could be centered on stablecoin transactions. The appeal and profitability of stablecoin transactions are already evident. Globally, individuals express a keen interest in having access to U.S. dollars, particularly for cross-border remittances. Stablecoins tied to the U.S. dollar were popular among crypto users earlier, but their availability and use cases are expanding at an accelerated pace. Companies like Circle collaborate with banks such as Nubank in Brazil to make USD Coin (USDC) transactions directly accessible to all account holders. Additionally, networks like Celo, associated with Ethereum, team up with Opera to integrate stablecoin transactions into Opera’s web browser, a platform optimized for low-cost smartphones prevalent in developing markets. As a result, Celo’s stablecoin transaction volumes have been experiencing rapid growth.
In the business world, transactions involving stablecoins are now gaining traction too. Companies such as EY, PayPal, and Coinbase have partnered with SAP to establish fully automated payments directly from within an enterprise’s ERP systems. This automation, which was previously limited to bank accounts, is now applicable to crypto-based payment rails. Given the importance of large-scale automation in businesses, this could potentially make these crypto payment options more appealing for enterprises. Additionally, when coupled with advanced privacy tools (and a more favorable regulatory environment), crypto-rails appear as less expensive alternatives for enterprise users.
2025 could very well mark a significant leap forward for Decentralized Finance (DeFi), a field that leverages software apps operating on blockchains to mimic essential financial service and banking functionalities.
In 2024, Decentralized Finance (DeFi) lacked significant advancements regarding regulatory clarity and, due to high real-world interest rates, wasn’t particularly appealing. However, by 2025, it’s predicted that the regulatory landscape will be more welcoming for DeFi, and if interest rates decrease, there might be a surge in seeking extra returns on digital platforms. Tools within DeFi, such as lending assets into pools for additional return (and increased risk), could regain popularity.
As an analyst, I find myself bracing for an unprecedented surge, where everything in the blockchain landscape will accelerate simultaneously. This isn’t about introducing something novel, but rather about rapid progress across all sectors. To borrow a term from music, we’re talking about cranking up the competitive intensity to maximum – think Spinal Tap’s iconic “11”!
In 2023, the scene was one of horror-stricken observation, followed by cautious stance in 2024. However, I predict a dramatic shift in 2025, where companies, banks, brokerages, insurance firms, and more will dive headfirst into this rapidly evolving landscape. The number of major players announcing plans to launch stablecoins, offer real-world assets, or start dealing in cryptocurrencies like Bitcoin and Ethereum is growing so fast I can barely keep track!
As a seasoned observer of the tech industry with over two decades of experience, I can confidently say that the blockchain ecosystem is more competitive than ever before. In my career, I have witnessed numerous market cycles and revolutions, and I must admit that the intensity within the blockchain sector is truly dialed up to 11. The year 2025 promises to be a particularly challenging one for those running blockchain networks and services.
Running a business in such a competitive environment can sometimes make one question whether it’s all worth it. But as someone who has seen numerous companies rise and fall, I believe that the key to success lies in perseverance and adaptability.
Within the Ethereum ecosystem alone, there are now more than 40 different Layer 2 networks vying for market share. The competition on transaction fees is fierce, and it seems that differentiation across these networks is scarce. To make matters worse, new competitors continue to enter the market.
I have seen many startups in my time struggle to find their niche and stand out from the crowd. However, I am confident that those who are able to innovate and offer unique value propositions will be the ones to succeed in this highly competitive landscape. The blockchain industry is still in its infancy, and there is plenty of room for growth and innovation.
For those running blockchain networks and services, it’s essential to stay focused on their core strengths, continuously iterate on their offerings, and be prepared to adapt quickly to changing market conditions. It won’t be an easy journey, but I am excited to see what the future holds for this rapidly evolving industry.
Despite its rugged nature within Ethereum, things might be even tougher outside for “alt-L1s” as they confront an integrated Ethereum ecosystem that appears scalable, secure, and consistently cost-effective. Networks such as Celo have already shifted their focus from competing with Ethereum to collaborating with it. I anticipate more networks will make this transition by 2025.
Running a private blockchain could be even more challenging than navigating fierce public competition from other blockchains. If your unique selling point is that it’s as similar to Ethereum as regulations permit, but those very regulations are being phased out, the situation looks particularly grim. I’ve already received inquiries from firms operating on private networks about how they can adapt quickly and efficiently.
To conclude, I anticipate 2025 might present an exciting period for fraudulent activities, much like a carnival or casino environment within digital trading. The relaxation of regulations and the lure of online trading could potentially attract unscrupulous individuals similar to those who surfaced during the previous cryptocurrency surge. However, it’s challenging to pinpoint where exactly this fraud may manifest. Typically, people tend to secure their defenses after a problem has occurred, so methods like hacking exchanges or misusing depositor funds could become less frequent due to improvements in auditing, regulatory oversight, and advanced security technologies. Nevertheless, the risk is not disappearing; instead, it might present itself in novel forms.
Happy New Year and have a great 2025!
Based on my personal experiences and insights gained throughout my career, I would like to express my perspective, which may not align with that of CoinDesk, Inc., its owners, or affiliates. My views are shaped by the countless hours spent delving into the world of cryptocurrencies and blockchain technology, navigating through its complexities and witnessing firsthand its transformative potential.
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2025-01-02 17:13