Original Article Title: After the Casino | My "Bearish" 2025 Crypto Plan
Original Article Author: poopmandefi, Researcher at IOSGVC
Original Article Translation: ChatGPT

Editor's Note: This article discusses the possible trajectory of the cryptocurrency market in 2025, particularly highlighting the potential increase in stablecoin market demand in a scenario of lackluster innovation. The author suggests that in a continued bearish market, yield-generating stablecoin products may occupy 20-30% of the stablecoin market. With the growth of the stablecoin market, more developers and new DeFi innovations may emerge. Additionally, Trump's support for cryptocurrency policies is expected to aid the development of the U.S.-based crypto industry, and investors should pay attention to the potential of U.S.-based crypto tokens.

The following is the original article's content (reorganized for clarity):

Written by a cryptocurrency enthusiast who has also been fortunate with meme coins, this piece explores legitimate investment opportunities in 2025 as he aims to explain to his dad that he is involved in a serious industry.

Disclaimer: This is merely the author's personal two cents on the market.

Topics covered in the article:

· The 2024 cryptocurrency market

· What comes after meme coins

· What I will focus on if the market remains bearish

2024, The Year of Bitcoin and Solana

2024 was brutal, unless you were a die-hard BTC supporter or a warrior fighting on the front lines. Venture capital, liquidity, diamond hands, and true believers were all obliterated, and with the explosion of AI, the future cryptocurrency market looks even darker.

· BTC touched $100,000, an ETF was approved, BTC's market dominance reached 60%, and the adoption by traditional finance accelerated. 2024 truly belonged to Bitcoin.

· Solana, the tokenization platform. At its peak, SOL's daily trading volume hit $36 billion, about 10% of the NASDAQ's daily volume, which is massive for the cryptocurrency space. This was fueled by the trends of meme coins and AI coins.

·Hyperliquid is the BBH (Big Black Horse) in this market. They made a bold move by rejecting venture capital funding, and their airdrop post proved a strong demand for non-KYC perpetual trading and "thick" platform liquidity.

·XRP, ADA, any Dino coins. Uber drivers and the US government seem to like them, so I give them a thumbs up.

Other than that, I can't think of any coin in this market that has seen gains lasting over 2 weeks.

By 2025, from gambling to the new DeFi and US Cryptocurrency. After Trump's fall, I observed that the market's profits did not flow back into AI tokens. So, apart from a portion of my SOL holdings (stupid decision), I converted everything to stablecoins.

It is becoming increasingly clear that after several months of player vs. player (PVP) battles, people are tired of MEME coins and AI castles in the sky. The entire AI field has been wiped out, with most tokens down 70-80% from their peaks, and the Libra event has almost sealed the fate of this narrative.

In short, Pumpfun will reset.

So, where did all the money from MEME coins go?

In the absence of a clear catalyst for MEME coins, the wealth effect is fading, leading to a downward spiral that is driving players away from MEME coins. Meanwhile, in today's cryptocurrency market:

· There is a lack of breakthrough innovation

· Existing meme coins continue to stagnate, and ETH is also facing trouble

· Fundamentals have suddenly become unimportant

· Old MEME coins are dead

· Newly listed tokens have a low survival rate, with only a few tokens able to sustain for over 2 weeks

It does sound bearish, doesn't it? In this scenario, I believe investors will be more inclined to opt for a "risk-off" investment approach, which is why I think most of the funds will flow into fiat-backed stablecoins by 2025.

Some may wish to put their assets to work by earning some passive income through stablecoins.

Therefore, stablecoins that can generate yield, such as USDe or USDS, would be very attractive to them.

·Stablecoins are the new oil.

While the AI and MEME markets were being destroyed, the total value of stablecoins continued to grow steadily, with a monthly growth rate of 3%. As of now, the TVL has exceeded $220 billion.

Those looking for safety and stability choose fiat-backed stablecoins. USDT and USDC maintain a 90% market dominance that is almost unshakable, thanks to their widespread adoption across various exchanges and payment platforms.

Those wishing to put their stablecoins to work choose yield-generating/decentralized stablecoins. For example, USDe, USDS, DAI, USD0, and others. So far, this sector holds just over 10% market share, but they have actually had an astonishing year, with total TVL growing by over 70%.

Well, let me be blunt. The current market landscape is as follows:

90% fiat-backed stablecoins

10% yield-generating stablecoins

I believe there is still room for growth in yield-generating stablecoins because:

1. The combination of "low volatility option" plus yield is always attractive to the crypto crowd.

2. Innovations may arise in new stability mechanisms and capital efficiency strategies, driving higher yields.

3. Stablecoins have found a product-market fit in cryptocurrency, acting as both a currency and an investment tool.

Therefore, this also shapes my 2025 cryptocurrency plan.

My 2025 Bearish Cryptocurrency Plan

If there is no innovation or new narrative in 2025, I believe the market will move in two directions:

·New DeFi innovations driven by the growing stablecoin market

· Policy Support for Cryptocurrency Driving 'Made in America' Cryptocurrency

1. Stablecoins and New DeFi Innovations

In the next 3-6 months, an increasing number of stablecoins will be introduced as part of a USD-based tokenization strategy, aiming to generate competitive yields through various types of collateral or strategies.

Given the composability and "price stability" of stablecoins, they can easily collaborate with different DeFi protocols, creating synergies between them.

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 yields, effectively creating new markets for yield-generating assets (including stablecoins).

Currency markets like MorphoLabs, 0xFluid also provide leveraged yield farms, driving economic activity around stablecoins.

DEXs like CurveFinance also serve as great venues for launching stablecoin pairs liquidity, among others.

Of all these innovations, my favorite examples are those creating new asset categories, like Pendle's YT-USDe, which builds upon yield "legos" to create a new market and offer additional yield layers for stablecoin enthusiasts.

Aside from yield optimization, I also look forward to seeing some innovative CDP designs, especially ideas that can eliminate over-collateralization and minimize liquidation risks, revitalizing decentralized stablecoins.

After all, I anticipate more innovations to emerge as the stablecoin market grows, as this is where capital will flow.

2. Policy Support for Cryptocurrency Driving American Cryptocurrency

Recently, Trump announced an attempt to drive a cryptocurrency strategic reserve plan, including a basket of "Made in America" coins such as SOL, XRP, and others.

While there is still uncertainty about whether the cryptocurrency reserve will receive government approval, Trump's impact on the cryptocurrency market cannot be ignored.

Here are a few examples of Trump's support for cryptocurrency:

1. First-time firing of Gary Gensler.

2. Reserve all Bitcoin seized by the United States to establish a "Strategic National Bitcoin Reserve" (e.g., the Bitcoin from the Silk Road is an example).

3. Launch a WiFi DeFi Fund, introduce Trump Coin, in alignment with the native properties of cryptocurrency.

4. The U.S. Securities and Exchange Commission (SEC) withdraws charges against exchanges and crypto projects (such as Coinbase, Uniswap, Kraken, etc.).

In addition, the Trump administration is likely to support the domestic cryptocurrency industry. Therefore, we can expect more crypto-friendly regulatory policies benefiting American homegrown cryptocurrencies.

This is not investment advice, but I will be closely watching these tokens as Trump wields significant influence.

Summary:

As previously stated, this is merely a brainstorming and intuitive discussion, and the above points are not supported by statistical data. So, please do not take it as investment advice.

Given the lack of cryptocurrency innovation and the market downturn, if the market remains "bearish" in 2025, I anticipate an increase in stablecoin demand. Assuming investors wish to earn yield on their stablecoins, I estimate yield-generating stablecoin products may hold a 20-30% share 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 emergence of new DeFi infrastructure in the ecosystem, and Trump's pro-crypto policies are likely to have a positive impact on the market in the long run.

Simultaneously, his policies may favor the development of domestic cryptocurrencies. Therefore, it is meaningful to pay attention to American homegrown cryptocurrency tokens, as some "news" is already enough to cause token prices to soar.

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