The Blueprint of Tomorrow 2025
1. Introduction
As we stand on the cusp of 2025, the landscape of crypto is slowly forming into a blueprint for the future of finance, governance, and technology.
With 617 million users now plugged into decentralized systems and $845 billion flowing through on-chain economies, we are witnessing the birth of a new global infrastructure. The transformation is inevitable; blockchains processing transactions 50x faster than ever, stablecoins acting as the backbone for 32% of all crypto activity, and DeFi reshaping the flow of capital across borders. This article spells the design for tomorrow where its a framework as the progress of cypto converge.
Hereby, I present to you 14 predictions into 2025 as the crypto space evolves.
Written with collaborators from Mckinsey Crypto. 🥳
Key highlights
Activate passive crypto users by simplifying access and reducing barriers.
Bridge the gap in on-chain activity versus ownership.
Crypto platforms should prioritize user-friendly mobile solutions and stablecoin offerings in high-inflation regions.
Political candidates should develop clear crypto policies to appeal to the growing electorate prioritizing digital asset regulation.
Leverage the growing adoption of stablecoins by ensuring strong regulatory frameworks.
Governments should accelerate the implementation of clear crypto regulations to boost institutional adoption.
Ethereum projects should leverage reduced fees to target cost-sensitive markets, particularly in developing regions.
Developers should capitalize on enhanced scalability to innovate new use cases, particularly in high-demand areas.
Leverage ZK technology to build privacy-focused, scalable decentralized applications focused on industries like finance and healthcare.
Focus on expanding stablecoin integration into traditional systems to accelerate global crypto adoption, especially in high-inflation and developing markets.
Leverage blockchain to enhance AI applications, in new market opportunities in sectors such as DeFi, supply chain management, and digital identity.
Capitalize on the shift toward DEXs by improving user experience, liquidity, and cross-chain trading.
Prioritize developer-friendly tools and infrastructure to attract and retain builders.
Prepare for 2025’s fifth wave of crypto adoption.
2. Current Size and Adoption of Crypto
The growth and adoption of cryptocurrency have been significant in 2024, with key metrics illustrating the increase in crypto ownership, active participation, and global trends. In particular, the industry has seen a marked rise in developing countries, while infrastructure improvements have set the stage for future mass adoption. This section delves into the current size of the crypto ecosystem, focusing on global ownership, active users, and mobile wallet adoption.
2.1 Activate passive crypto users by simplifying access and reducing barriers
Cryptocurrency ownership has expanded substantially in recent years, with millions of users holding crypto assets across various platforms.
Estimated Global Crypto Owners: As of 2024, it is estimated that there are approximately 617 million crypto owners worldwide. This figure represents about 12% of the total global internet user base, which is roughly 5 billion individuals.
While the crypto industry has reached a significant portion of internet users, it is still in its early stages of adoption. The majority of internet users are not yet engaged with cryptocurrencies, presenting an opportunity for further growth.
The data also indicates that many crypto holders are passive owners, meaning they hold digital assets but are not actively interacting with blockchain applications, such as DeFi protocols or decentralized exchanges.
Passive Ownership vs. Active Use: Many individuals holding crypto have not fully embraced the blockchain ecosystem beyond purchasing and holding assets. This signals an untapped potential market for developers and startups aiming to convert crypto holders into active participants by building applications that appeal to a broader audience.
Opportunity for Startups
There is an immense opportunity for crypto projects to focus on onboarding these passive users into the active ecosystem by simplifying access to decentralized applications (dApps) and reducing barriers such as high fees, complex user interfaces, and technical knowledge requirements.
2.2 Gap in on-chain activity versus ownership
Monthly Active Crypto Addresses
The number of monthly active addresses across various blockchain networks has reached an all-time high of approximately 220 million. However, it is essential to note that one user may control multiple addresses, so this figure does not directly correlate to the number of unique users.
Unique Monthly Active Users
After adjusting for users who hold multiple addresses, it is estimated that there are between 30 to 60 million unique active users interacting with blockchain networks on a monthly basis.
While the number of active addresses is impressive, the discrepancy between the number of addresses and unique users highlights that the crypto ecosystem is still relatively small compared to the overall number of internet users. This gap suggests that the industry has yet to reach mainstream adoption.
On-Chain Activity vs. Ownership: Despite the large number of individuals holding cryptocurrencies, active on-chain participation is much lower. This could be attributed to high transaction fees on some networks, lack of user-friendly interfaces, and limited real-world applications for crypto beyond speculation.
2.3 Crypto platforms should prioritize user-friendly mobile solutions and stablecoin offerings in high-inflation regions
Mobile wallets have become a critical entry point for crypto users, particularly in developing nations where traditional financial infrastructure is less accessible.
Leading Regions for Mobile Wallet Adoption:
Nigeria, India, and Argentina have emerged as key regions for mobile wallet usage, leading the way in terms of adoption and activity.
U.S. Share of Mobile Wallets: The share of mobile wallet usage in the United States has declined to less than 15%, reflecting a shift in adoption patterns toward developing markets.
Implications
The increasing reliance on mobile wallets in regions such as Africa, Asia, and Latin America reflects the practical use cases of crypto in these economies. In many of these areas, cryptocurrencies are used to hedge against inflation, transfer money across borders, and access financial services that would otherwise be unavailable.
Stablecoins in High-Inflation Economies: The surge in mobile wallet adoption in countries like Argentina highlights the role of stablecoins as a hedge against local currency devaluation. With annual inflation rates as high as 80%, stablecoins pegged to the U.S. dollar provide users in these regions with a more stable store of value.
3. Political Landscape and Regulatory Environment
As cryptocurrency continues to grow, its influence on the political landscape has become increasingly apparent, particularly in the United States. This section examines how crypto has emerged as a significant political issue, the role of stablecoins in maintaining U.S. dollar dominance, and recent regulatory developments shaping the industry.
3.1 Political candidates should develop clear crypto policies to appeal to the growing electorate prioritizing digital asset regulation
In the run-up to the 2024 U.S. presidential election, cryptocurrency has become a hot-button issue, particularly in key swing states.
Swing State Influence
Pennsylvania, Wisconsin, and Michigan have seen some of the most significant increases in crypto-related search interest from 2020 to 2024, positioning them as key battlegrounds where crypto policy could influence voter turnout and decisions.
Google Trends Data: A deep dive into search trends reveals that the interest in cryptocurrency in these states has risen dramatically, suggesting that a portion of the electorate sees crypto as an important issue.
The growing interest in crypto in politically critical states indicates that it could play a role in influencing the outcome of the 2024 election. With the rise of pro-crypto candidates and discussions surrounding the role of digital currencies in the U.S. economy, crypto could be a decisive issue in the election.
Politicians’ Positions: Both Democrats and Republicans have begun integrating cryptocurrency into their platforms, with discussions around innovation, regulatory clarity, and the economic benefits of embracing digital assets. This bipartisan interest in crypto signals its importance as a mainstream issue that transcends traditional political divisions.
3.2 Leverage the growing adoption of stablecoins by ensuring strong regulatory frameworks
As the global reserve currency, the U.S. dollar's position is of strategic importance to the United States. However, its dominance has come under pressure from other currencies and emerging digital assets.
Stablecoins as a Tool for Dollar Dominance:
USD-Denominated Stablecoins: Over 99% of stablecoins are pegged to the U.S. dollar, making them a crucial tool for maintaining U.S. dollar dominance in the global economy.
Strengthening the Dollar: With the rise of central bank digital currencies (CBDCs) from foreign nations, stablecoins offer the U.S. a means to retain its influence by becoming the digital standard for transactions across borders.
Key Metrics:
Stablecoins Holding U.S. Debt
Stablecoins are now ranked as the 20th largest holder of U.S. government debt, surpassing major economies such as Germany. As their adoption grows, stablecoins could continue to play a pivotal role in supporting the U.S. government's debt, potentially becoming one of the top holders in the future. This shift highlights the increasing influence of stablecoins in both the crypto and traditional financial ecosystems.
The widespread use of stablecoins as a digital extension of the U.S. dollar presents a unique opportunity for the United States to strengthen its economic influence globally, even as other nations experiment with central bank digital currencies (CBDCs). By embracing stablecoins, the U.S. can reinforce the dollar’s role in global trade and finance, while offering a more flexible, digital alternative to traditional banking systems.
Challenges Ahead: While stablecoins offer significant benefits, regulatory uncertainty and concerns about their systemic impact on traditional finance remain hurdles that need to be addressed. Ensuring stablecoins are well-regulated and backed by appropriate reserves will be critical to maintaining confidence in their use as digital dollars.
3.3 Governments should accelerate the implementation of clear crypto regulations to boost institutional adoption
The regulatory landscape for cryptocurrency has seen both progress and challenges in 2024, with governments around the world grappling with how to regulate this fast-evolving industry. The U.S. has made strides in developing a clearer regulatory framework for crypto, but challenges remain.
Bipartisan Support for Crypto Legislation:
The FIT-21 Bill: In a significant development, the U.S. House of Representatives passed the FIT-21 bill, which received broad bipartisan support. This bill outlines a framework for regulating cryptocurrencies and aims to provide clarity on issues such as taxation, consumer protection, and oversight of decentralized finance (DeFi) platforms.
Stablecoin Legislation: There has been growing bipartisan interest in crafting stablecoin legislation, with several lawmakers recognizing the importance of ensuring that stablecoins are regulated and operate within a safe and sound financial system.
The passage of the FIT-21 bill and the increasing focus on stablecoin regulation signal a positive step forward for the crypto industry in the U.S. Regulatory clarity is crucial for fostering innovation while ensuring that consumers are protected. However, it is still uncertain how quickly new laws will be implemented and what the final regulatory landscape will look like.
Global Regulatory Trends:
Europe and Asia: Several countries in Europe and Asia are also moving toward more comprehensive regulatory frameworks for crypto. The European Union’s Markets in Crypto-Assets (MiCA) regulation is an example of how regions are looking to formalize the industry and create a stable regulatory environment that encourages growth.
CBDCs and Crypto Regulation: As more countries experiment with or roll out central bank digital currencies (CBDCs), the interplay between national currencies and decentralized stablecoins will become an important regulatory focus. Governments will need to find a balance between promoting innovation and maintaining control over their monetary systems.
Clearer regulations will likely increase institutional adoption of cryptocurrencies, as businesses and financial institutions seek the security of operating in a well-defined regulatory environment. At the same time, regulatory clarity will help attract more users by providing safeguards and protections against fraud and abuse.
4. Infrastructure Developments
4.1 Ethereum projects should leverage reduced fees to target cost-sensitive markets, particularly in developing regions
The Ethereum network has undergone significant upgrades in 2024, with EIP-4844 (Proto-Danksharding) being one of the most impactful changes. This upgrade has dramatically reduced transaction fees on Layer 2 (L2) solutions and has improved the overall scalability of the Ethereum ecosystem.
EIP-4844 Implementation:
Proto-Danksharding: This upgrade introduced a new data availability layer to Ethereum, specifically designed to support the needs of rollups (Layer 2 scaling solutions). By allowing rollups to store data more efficiently, EIP-4844 significantly lowered the cost of using Ethereum for both developers and end-users.
Impact on Layer 2 Solutions:
Transaction Cost Reduction on ETH
The fees associated with using Layer 2 networks like Arbitrum or Optimism have dropped dramatically. For example, transferring stablecoins using Layer 2 solutions now costs less than a cent, compared to $12 on the Ethereum mainnet in 2021. This is a game-changer for users in developing countries, where high fees previously made many Ethereum-based services inaccessible.
The success of EIP-4844 is a critical milestone for Ethereum as it continues to address the challenges of high fees and network congestion. By making transactions on Layer 2 networks more affordable, Ethereum is better positioned to compete with newer Layer 1 blockchains that offer faster and cheaper transactions. This infrastructure upgrade also opens the door for new decentralized applications (dApps) that require low transaction costs to function effectively.
4.2 Developers should capitalize on enhanced scalability to innovate new use cases, particularly in high-demand areas
Blockchain scalability has been a primary focus for the industry, as networks need to handle an increasing number of transactions without sacrificing speed or security. In 2024, significant progress has been made in scaling blockchain networks across the board.
Transaction Throughput Growth:
50x Increase: Blockchain networks are now capable of processing 50 times more transactions per second (TPS) than they could four years ago. This improvement is due to advancements in both Layer 2 scaling solutions on Ethereum and the optimization of alternative Layer 1 blockchains like Solana, Tron, and Avalanche.
Contributors to Scalability:
Layer 2 Scaling: Ethereum's Layer 2 solutions, such as rollups, have played a key role in increasing the network’s transaction throughput without overloading the main chain. As more users move to Layer 2 networks, Ethereum’s capacity to handle dApp activity has grown exponentially.
Solana and Other Layer 1s: Platforms like Solana have focused on increasing the speed and efficiency of transactions at the base layer. Solana's proof-of-history (PoH) mechanism enables the network to process thousands of transactions per second, making it a popular choice for high-frequency trading and gaming applications.
These scaling advancements have made it possible for blockchains to support a wider range of applications, from DeFi to gaming, without experiencing the bottlenecks that plagued the industry during previous bull markets. As blockchains become more efficient and affordable, we are likely to see greater experimentation with decentralized applications that were previously infeasible due to high costs and slow transaction speeds.
4.3 Leverage ZK technology to build privacy-focused, scalable decentralized applications focused on industries like finance and healthcare
Zero-knowledge proofs (ZKPs) represent a breakthrough in cryptographic technology, offering solutions to some of blockchain's most pressing challenges: scalability, privacy, and interoperability.
What are Zero-Knowledge Proofs?
Zero-knowledge proofs allow one party to prove the validity of a statement to another party without revealing any additional information. In the context of blockchain, ZKPs can be used to verify transactions without exposing sensitive data.
Applications of ZKPs:
Privacy: ZKPs enable private transactions on public blockchains, preserving user confidentiality without compromising the transparency of the network.
Scaling: By allowing certain computations to be processed off-chain and verified on-chain, ZKPs can significantly reduce the amount of data that needs to be stored on the blockchain, improving efficiency.
Interoperability: ZKPs can facilitate cross-chain interactions by verifying data between different blockchains without exposing the underlying information.
Technological Progress:
ZK Virtual Machines (ZKVMs): The development of ZKVMs has been a major milestone in making zero-knowledge technology more accessible. ZKVMs allow developers to build decentralized applications that leverage ZKPs to enhance privacy and scalability.
Performance Metrics: ZKVMs are still in the early stages of development, with performance comparable to the early days of traditional computing. However, improvements are happening rapidly, and it is expected that ZK technology will play a significant role in the next wave of blockchain innovation.
ZKPs are a key area of focus for the future of blockchain technology. Their ability to address privacy concerns while improving scalability positions them as a critical innovation for the next generation of decentralized applications. As ZK technology becomes more mature, we can expect to see broader adoption across industries, from finance to healthcare.
5. Emerging Applications and Trends
5.1 Focus on expanding stablecoin integration into traditional systems to accelerate global crypto adoption, especially in high-inflation and developing markets.
Decentralized finance (DeFi) and stablecoins continue to dominate the crypto landscape in 2024. These two sectors represent the majority of on-chain activity and have become key drivers of the overall crypto ecosystem.
Usage Breakdown:
DeFi: Accounts for 34% of on-chain activity, making it the most prominent use case for blockchain technology.
Stablecoins: Stablecoins represent 32% of activity, largely driven by their use as a medium for transferring value, particularly in high-inflation economies and for cross-border remittances.
Infrastructure Services (Bridges, Oracles, Smart Contract Wallets): These make up 14% of blockchain activity, highlighting the growing importance of infrastructure solutions to connect different blockchain ecosystems and ensure seamless functionality of dApps.
Token Transfers: General token transfers account for 13% of usage, illustrating the ongoing movement of value across blockchain networks.
Other Categories:
Centralized Exchanges (CEXs): Only 3% of blockchain activity is related to centralized exchanges, showing a shift towards decentralized alternatives.
Gaming and NFTs: Together, these emerging sectors make up less than 3% of total activity, but they have significant growth potential in the coming years.
Social Applications: Still in their infancy, social dApps account for less than 1% of blockchain activity.
DeFi and stablecoins have proven to be the most robust and widely used applications of blockchain technology. DeFi’s success lies in its ability to offer financial services without intermediaries, allowing users to borrow, lend, and trade with ease. Stablecoins, on the other hand, provide a reliable medium for transactions and a hedge against volatile local currencies in high-inflation markets. These two sectors are expected to continue driving crypto adoption in 2025 as infrastructure improves and more users onboard to decentralized platforms.
Growth Potential:
DeFi: As the DeFi ecosystem matures, more sophisticated financial products such as derivatives, insurance, and cross-chain lending are expected to emerge, attracting institutional investors.
Stablecoins: Continued demand for stablecoins, particularly in developing nations and among institutional players, will likely drive further adoption. The integration of stablecoins into traditional financial systems, coupled with clearer regulations, could spur even greater use.
5.2 Leverage blockchain to enhance AI applications, in new market opportunities in sectors such as DeFi, supply chain management, and digital identity.
The intersection of artificial intelligence (AI) and blockchain has become one of the most exciting frontiers in 2024, with a significant overlap in user bases and emerging applications.
User Overlap:
High Correlation: Data indicates a high degree of overlap between users of AI technologies, such as ChatGPT, and active participants in the crypto space. This overlap suggests that crypto users are among the early adopters of AI and are likely to drive innovation at the intersection of these two technologies.
Applications and Synergies:
Authenticity and Verification: One of the most promising use cases for blockchain in AI is verifying the authenticity of AI-generated content. As deepfakes and AI-generated media become more prevalent, the need for trusted systems to verify the origin and accuracy of content will grow. Blockchain, with its cryptographic properties, can serve as a verification layer that ensures the legitimacy of AI outputs.
Data Ownership and Control: Blockchain can also address concerns about data ownership in AI applications. Decentralized systems enable individuals to retain control over their personal data, which can then be used to train AI models without compromising privacy or sovereignty.
Decentralized AI Agents: Blockchain can facilitate the creation of decentralized AI agents that operate independently of any central authority. These agents can be used in various applications, from automated trading to decentralized customer service, without the risk of censorship or tampering.
Many startups and established companies are beginning to explore how blockchain can improve the functionality and security of AI applications. The convergence of these two frontier technologies could unlock new markets and use cases that were previously impossible, particularly in areas like decentralized finance, supply chain management, and digital identity verification.
5.3 Capitalize on the shift toward DEXs by improving user experience and liquidity and cross-chain trading.
One of the most notable shifts in 2024 is the increasing market share of decentralized exchanges (DEXs) compared to their centralized counterparts (CEXs). This trend reflects a broader movement toward decentralization in the crypto ecosystem.
Market Share Trends
DEXes: In 2020, decentralized exchanges accounted for 0% of crypto trading volume. By 2024, DEXs have captured over 10% of the total crypto trading volume, with some estimates suggesting this figure could rise to 30-40% in the coming years.
CEXes: While centralized exchanges still dominate the market, their share has been gradually declining as more users seek decentralized alternatives for greater security, transparency, and control over their funds.
Advantages of DEXs:
Security: DEXs eliminate the need for users to trust a central authority with their funds, reducing the risk of hacking or fraud that has plagued many centralized exchanges in recent years.
Transparency: All transactions on DEXs are executed on-chain, meaning they are publicly visible and verifiable, which reduces the risk of market manipulation or opaque practices.
User Control: DEXs allow users to maintain custody of their assets throughout the trading process, mitigating the risk of loss due to exchange insolvency or mismanagement.
Prediction: As DEXs continue to improve their user experience and liquidity, they are expected to capture an even larger share of the market. The introduction of features like automated market makers (AMMs) and cross-chain trading has already made DEXs more competitive, and further advancements in decentralized finance infrastructure will likely accelerate this trend.
6. Prioritize developer-friendly tools and infrastructure to attract and retain builders
Developer interest in the crypto space is a key indicator of the industry's long-term growth potential. In 2024, there has been a significant increase in the number of builders focusing on crypto projects, driven by advancements in infrastructure and the potential for innovation.
Builder Energy Dashboard: A16Z’s proprietary Builder Energy Dashboard tracks developer activity across blockchains, categories, and geographies. This tool has shown that the number of active builders in the crypto space has grown year-over-year, reflecting the increasing sophistication and expansion of the ecosystem.
Platform Preferences:
Ethereum and Layer 2s: Ethereum and its Layer 2 solutions continue to capture the majority of developer interest, with a strong focus on scaling and improving user experience. The success of EIP-4844 and rollup solutions like Optimism and Arbitrum has attracted developers looking to build on top of these efficient, scalable platforms.
Base: A breakout ecosystem in 2024, Base has seen rapid growth in developer interest due to its performance and innovation in Layer 2 scaling.
Other Ecosystems: While Ethereum and its Layer 2s dominate, platforms like Bitcoin, Solana, and newer entrants continue to gain traction, particularly for applications requiring high throughput and low transaction costs.
Growth of Builder Energy: The increasing interest from developers signals a healthy and growing ecosystem. As more projects are launched and more tools are created for developers, the crypto space is becoming more accessible and innovative.
7. Trends for 2025
As the crypto industry continues to evolve, several key trends and predictions stand out for 2025. These are expected to shape the next phase of growth and innovation in the space.
Infrastructure Utilization: With the scalability improvements made in 2024, the stage is set for broader adoption of blockchain technology. More users and applications will enter the space as transaction fees decrease and network efficiency improves.
New Use Cases: The reduction in transaction fees will enable the development of more decentralized applications in areas such as social media, gaming, and supply chain management. These sectors, which are currently underrepresented in terms of on-chain activity, are likely to see significant growth as infrastructure becomes more robust.
Regulatory Clarity: Regulatory developments in the U.S. and around the world will play a crucial role in determining the pace of adoption. Clearer regulations will attract more institutional investors and bring greater legitimacy to the industry, while protecting consumers and ensuring market stability.
AI and Blockchain Integration: The convergence of AI and blockchain is expected to accelerate in 2025, with more use cases emerging at the intersection of these two technologies. From AI-driven decentralized finance applications to blockchain-based verification systems for AI models, the synergies between these technologies could unlock new opportunities for innovation.
Fifth Wave of Adoption
The crypto market is poised for a potential fifth wave of adoption, driven by the maturation of decentralized applications, increasing institutional involvement, and the global push for regulatory clarity. If the industry continues to build on its current momentum, 2025 could see the next major cycle of growth and innovation.
8. Conclusion
The year 2024 has been a transformative period for the cryptocurrency industry, characterized by significant infrastructural improvements, regulatory advancements, and the maturation of key applications. As blockchain technology continues to scale and become more affordable, the industry is expected to see broader adoption across multiple sectors, from finance to gaming and beyond.
While challenges remain—particularly in terms of regulatory clarity and user experience—the overall outlook for the industry is positive.
nice article. 👏