The State of Crypto 2025

The State of Crypto 2025

Amid stubborn inflation, economic uncertainty, habitual ‘Everything’s great!’ government pronouncements, one industry keeps building and growing: crypto. A new report by prominent venture capital firm Andreessen Horwitz, details how crypto keeps expanding its footprint beyond cypher punks and day traders into realms that spark innovation and aid the world’s poorest.

Some highlights from the report:

  • Crypto activity has hit an all-time high
  • In September, 220 million addresses interacted with a blockchain at least once, more than triple the end of 2023
  • Estimated 617 million estimated global crypto owners
  • Monthly mobile crypto wallet users hit an all-time high of 29 million

Low transaction fees have spurred this activity among a number of prominent Layer 1 blockchains. Ethereum and Solana continue to lead in development and energy, including a number of Layer 2 apps that work on top of Ethereum.

The State of Crypto 2025: The Rise of Stablecoins and DeFi

Two other important aspects of the crypto boom are stablecoins and decentralized finance (DeFi). Stablecoins have experienced a meteoric rise since Tether first emerged in 2014. Stablecoins are digital assets pegged to a stable monetary value almost exclusively the US dollar. They have become a critical pillar of the crypto ecosystem. As the report notes, “By enabling fast, cheap, global payments, among other uses, stablecoins have become one of crypto’s most obvious ‘killer apps.’” Indeed, the growth is astonishing. Stablecoin payments now dwarf Visa and PayPal and are starting to challenge ACH transfers.

But that’s just the start. Stablecoins are also starting to dollarize the global financial system—a phenomenon I wrote about in 2022, that benefits US citizens. But it’s not just Americans, by converting their holdings to stablecoins, the world’s poorest in places like Venezuela and Argentina can maintain their purchasing power despite central bank mismanagement of native currencies. (Of course, this assumes the US won’t follow these spendthrifts into oblivion.).

Source: https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/

Decentralized Finance (DeFi) has been another remarkable story. DeFi opens the heretofore, esoteric, closed, rent-seeking banking industry. Ironically, much of crypto’s bad rap comes from fraudsters like Sam Bankman-Fried recentralizing and closing crypto functions that DeFi make transparent. Finance can now be open-source, permissionless, censorship resistant, and decentralized. Conducting banking activities can now take place through a digital wallet on a transparent platform without traditional finance (tradfi) say so or interference. Moreover, DeFi introduces new forms of finance like staking that allow ordinary people to earn rewards on their holdings. DeFi protocols now have $169 billion in value locked in, this number will keep growing. The sector is also attracting a huge chunk of programmer talent.

Crypto’s Future is Bright in 2025 and Beyond

Like the first internet bubble in 2000, the hype around crypto and Web3 has attracted scammers, embellishers, hackers, and more. But the core promise of this new technology remains. Whilst asset prices fluctuate and overhyped projects fail, the developers keep working and new users keep onboarding. Governments cracking down, afraid of losing population control through central bank policies, is the only way crypto can be stopped. Smart regulation and free innovation are the way forward.

By Jossey PLLC

Schedule a free 30-minute consultation with my firm here: https://www.thecrowdfundinglawyers.com/cfl-scheduler/

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