Original title: After the Casino | My Bearish 2025 Crypto Plan
Original author: poopmandefi, researcher at IOSGVC
Original translation: BlockBeats
Editors Note: This article discusses the possible direction of the cryptocurrency market in 2025, especially the possible increase in the demand for stablecoins in the absence of innovation. The author believes that if the market continues to be bearish, yield-generating stablecoin products may occupy 20-30% of the stablecoin market. As the stablecoin market grows, more developers and new DeFi innovations may emerge. In addition, Trumps pro-cryptocurrency policy will help the development of the US native crypto industry, and investors should pay attention to the potential of US native crypto tokens.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
This is written by a crypto enthusiast who also had good luck with MEME coins and is now exploring legitimate investment opportunities in 2025 so that he can explain to his dad that I am in a serious industry.
Disclaimer: This is just the author’s personal two cents opinion on the market.
Content mentioned in the article:
Cryptocurrency Market in 2024
What’s next after MEME coin?
What I would watch if the market remains bearish
2024, the Year of Bitcoin and Solana
2024 is brutal, unless you are a loyal supporter of BTC or a warrior fighting on the front line. VCs, liquidity, diamond hands and true believers have all been destroyed, and with the explosion of AI, the future of the cryptocurrency market looks even darker.
BTC hits $100,000, ETFs are approved, BTC’s market dominance reaches 60%, and traditional finance adoption accelerates. 2024 is truly the year of Bitcoin.
Solana, a tokenized platform. At its peak, SOL’s daily trading volume reached $36 billion, which is about 10% of NASDAQ’s daily average trading volume, which is huge for cryptocurrencies. The trend of MEME coins and AI coins contributed to this.
Hyperliquid is the BBH in this market. They made a bold move by rejecting VC funding, and their post-airdrop adoption demonstrates the strong demand for non-KYC perpetual trading and “thick” platform liquidity.
XRP, ADA, any Dino coin. Uber drivers and the US government seem to like them, so I give them a thumbs up.
Other than that, I cant recall any gains in this market that were longer than 2 weeks.
From Casinos to New DeFi and US Cryptocurrency in 2025. After the Trump drop, I observed that the profits from the market did not flow back into AI Tokens. So I converted everything into stablecoins except for part of the SOL position (stupid decision).
It is becoming increasingly clear that after a few months of player versus player (PVP) battles, people are tired of MEME coins and AI castles in the air. The entire AI field has been wiped out, most tokens have fallen 70-80% from their peak, and the Libra incident has almost doomed the fate of this narrative.
In short, Pumpfun will go to zero.
So, where did the money in MEME coins go?
In the absence of an obvious catalyst for MEME coins, the wealth effect is fading, leading to a downward spiral that pushes players away from MEME coins. Meanwhile, in today’s cryptocurrency market:
Lack of breakthrough innovation
Existing altcoins continue to stagnate, and ETH is also in trouble
Fundamentals suddenly don’t matter
The old MEME coin is dead
Newly listed tokens have a low survival rate, 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-off investment approach, which is why I believe that most of the funds will flow into fiat-backed stablecoins in 2025.
Some of these people may want to leverage their assets to earn some passive income through stablecoins.
Therefore, stablecoins that can generate income, such as USDe or USDS, will be very attractive to them.
Stablecoins are the new oil.
While the AI and MEME markets are being destroyed, the total value of stablecoins continues to grow steadily, with a monthly growth rate of 3%. As of now, the TVL has exceeded US$220 billion.
Those who want safety and security choose fiat-backed stablecoins. USDT and USDC maintain a 90% market dominance that is almost unchallengeable, thanks to their widespread adoption across different exchanges and payment platforms.
Those who want to make their stablecoin work, choose yield-generating/decentralized stablecoins. For example, USDe, USDS, DAI, USD 0, etc. This space only accounts for a little over 10% of the market share so far, but they actually had an amazing year with total TVL growing by over 70%.
Well, let me get this straight. The current market situation is:
90% of fiat currencies back stablecoins
10% Yield Generating Stablecoin
I believe there is still room for growth in yield-generating stablecoins because:
1. Low volatility options plus returns are always attractive to people in the crypto circle.
2. Innovation may emerge in new stabilization mechanisms and capital efficiency strategies, driving higher returns.
3. Stablecoins have found product-market fit in cryptocurrencies, serving as both a currency and an investment tool.
So this also forms my 2025 cryptocurrency plan.
My Bearish Crypto Plan for 2025
If there is no innovation or new narrative in 2025, I believe the market will go in two directions:
New DeFi innovation driven by the growing stablecoin market
Pro-cryptocurrency policies drive “Made in America” cryptocurrencies
1. Stablecoins and new DeFi innovations
Over the next 3-6 months, more and more stablecoins will be launched as tokenized USD-based strategies designed to generate competitive returns through different types of collateral or strategies.
Given the composability and “price stability” of stablecoins, they can easily collaborate with different DeFi protocols and create synergies with each other.
Examples of existing DeFi integrations include:
Interest rate swap related products, such as Pendle Fi, Spectra Finance, are great designs that allow users to speculate on asset returns, effectively creating new markets for yield-generating assets (including stablecoins).
Money markets like MorphoLabs, 0x fluid, etc. also provide leveraged yield farms to drive economic activity in stablecoins.
DEX such as CurveFinance also provides a good place to initiate liquidity of stablecoin pairs.
Of all these innovations, my favorite examples are those that create new asset classes, such as Pendle’s YT-USDe, which creates a new market on top of yield legos and provides an additional layer of yield for stablecoin enthusiasts.
In addition to yield optimization, I also hope to see some innovations in CDP design, especially ideas that can remove over-collateralization and minimize liquidation risk. These ideas can give decentralized stablecoins new life.
After all, I expect more innovation to emerge as the stablecoin market grows because that’s where the money will flow.
2. Policies supporting cryptocurrencies drive cryptocurrencies in the United States
Recently, Trump announced his attempt to promote a crypto strategic reserve plan, which would include a basket of “Made in the USA” currencies such as SOL, XRP, etc.
Although there is still uncertainty about whether cryptocurrency reserves will receive government approval, Trump’s influence 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 build a Strategic National Bitcoin Reserve (for example, Bitcoins on Silk Road are an example).
3. Launching the WiFi DeFi Fund and launching the Trump coin are very consistent with the native attributes of cryptocurrency.
4. The U.S. Securities and Exchange Commission (SEC) withdrew its 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 are favorable to domestic cryptocurrencies in the United States.
This is not investment advice, but I would keep a close eye on these coins because Trump’s influence is so strong.
Summarize:
As mentioned before, this is just a brainstorming and intuitive discussion, and the above opinions are not supported by statistics. So please dont take it as investment advice.
Given the lack of cryptocurrency innovation and the sluggish market, I expect demand for stablecoins to increase if the market remains “bearish” in 2025. Assuming investors want their stablecoins to generate yield, I estimate that yield-generating stablecoin 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. Trumps pro-cryptocurrency policy will have a positive impact on the market in the long run.
At the same time, his policies may be beneficial to the development of native cryptocurrencies. Therefore, it makes sense to pay attention to the native US cryptocurrency tokens, because some news are enough to make the token price soar.
