Crypto Market Outlook: AI Bubble, Bitcoin's Dominance, and the Return of Infrastructure

The crypto market will undergo significant changes in 2025, with AI narratives, Bitcoin L2 ecosystems, and the return of infrastructure value becoming the market focus. The Delphi Labs team delved into these trends in the latest episode of the Hivemind podcast, and here are the key points overview:

AI Bubble

• In 2025, AI may become the biggest market narrative and may even achieve general artificial intelligence (AGI).
• The AI sector may witness one of the largest bubbles in financial history, with strong fundamentals but speculative sentiment also driving up valuations.
• Currently, the market value of AI-related projects is only 50 billion USD, with huge growth potential in the future.
• Existing AI projects like Virtuals and ai16z lack long-term moats, and better solutions will emerge in the future.

The Decline of OG Memes

• AI is essentially a larger Meme than WIF, making it easier to tell stories and ignite interest.
• In 2025, most capital flows may shift towards AI, while the traditional Meme coin market has become saturated.
• DOGE may be a good benchmark for assessing the overall meme coin market, as its trend has not yet peaked.
• In the long term, projects lacking actual business support may approach zero, except for a few.

Infrastructure Value Reversion

• The market is maturing, and investors are beginning to focus on projects that have real business support.
• Solana applications account for over 50% of the revenue in the crypto market, and may reach 80% by the end of the year.
• The bubble of infrastructure tokens, high FDV low liquidity tokens, and Meme coins is dissipating.
• 应用特定排序(app-specific sequencing)可能是未来发展趋势

Bitcoin Dominance

• The dominance of Bitcoin has steadily increased since 2022, currently around 58%.
• The traditional concept of "shanzhai coin season" may be outdated, and projects with strong fundamentals will stand out.
• The dominance of BTC may return to 62%-63% in 2025, and then start to decline.
• The Bitcoin L2 ecosystem could become a dark horse, and even a small percentage of adoption could have a huge impact.

Bitcoin L2 Prospects

• By 2025, we may see the real ZK L2 launch on Bitcoin, such as Citrea or Alpen Labs.
• The OP_CAT function is expected to officially launch in 2025, paving the way for trustless bridging.
• Starknet may become the dark horse of Bitcoin L2.
• Even if only 2.5% of Bitcoin flows into L2, it corresponds to a market size of 50 billion dollars.

Overall, the crypto market in 2025 is expected to present a more diversified and mature landscape. AI, Bitcoin L2, and infrastructure projects may become the main growth points, while traditional Meme coins and projects lacking practical applications may gradually lose market attention. Investors need to closely monitor the development of these trends and adjust their investment strategies accordingly.