Author: Neuralnexus

As we bid farewell to 2024 and welcome a new year, the decentralized finance (DeFi) space is poised for significant growth. Several industry executives shared their insights with Cointelegraph, predicting that Bitcoin staking, real-world asset (RWA) tokenization, and agentic artificial intelligence will be major catalysts driving DeFi adoption in 2025.

Bitcoin Staking: Unlocking New Opportunities

In 2024, the price of Bitcoin surpassed $100,000 per coin for the first time, with investors pouring over $100 billion into spot BTC exchange-traded funds (ETFs). This milestone is expected to reignite interest in crypto from institutions and regulators alike, revitalizing the entire crypto sector in 2025.

"Bitcoin’s all-time high will spark renewed interest in crypto from institutions and regulators alike and should reinvigorate the entire crypto sector in 2025," said Dean Tribble, CEO of layer-1 network Agoric Systems. "The current state of affairs is a perfect storm for DeFi adoption."

Total value locked (TVL) in DeFi protocols has been steadily increasing, reaching $130 billion in December, nearing its all-time high of around $175 billion in 2021, according to data from DefiLlama.

"By 2025, DeFi infrastructure and blue-chip protocols like Aave, Maple, Maker will have been operating at scale for over four years," said Jacob Phillips, co-founder and head of strategy at Bitcoin staking protocol Lombard. "These platforms will become reliable venues where institutions and new users put Bitcoin to work."

Real-World Asset (RWA) Tokenization: Unlocking New Markets

The tokenization of real-world assets has been gaining momentum in recent years, with the market size estimated to reach $30 trillion globally.

"Tokenizing real-world assets like real estate and carbon credits will unlock unprecedented liquidity," said Raj Brahmbhatt, CEO of Web3 settlement platform Zeebu. "Advancements in payments will further streamline cross-border transfers."

The US Treasury Department has also highlighted the potential benefits of tokenization, including improved liquidity and reduced operational and settlement frictions.

Agentic Artificial Intelligence: Revolutionizing DeFi

In 2024, tokens linked to agentic AIs collectively bootstrapped nearly $10 billion in market capitalization, according to CoinGecko. Analysts expect the fusion of artificial intelligence and blockchain technology to transform Web3, creating a future where self-directed AIs build decentralized applications and transact with human users.

"Agentic AI has already proven central to the future of the industry," said J.D. Seraphine, CEO of AI protocol Raiinmaker. "AI agents are expected to take on a more prominent role within decentralized communities in 2025."

The Rise of Bitcoin Staking ETFs

Matt Hougan, head of research at asset manager Bitwise, predicts that Bitcoin staking ETFs may gain traction in 2025.

"There’s a lot of demand for Bitcoin yield," said Hougan. "Whether it makes it into an ETF structure in the United States, I’m not sure, but in Europe, definitely."

Liquid Staking Tokens (LSTs) and Their Growing Adoption

Liquid staking tokens represent claims on staked BTC and have been proliferating rapidly. As of December 19, Bitcoin LSTs command upward of $2.5 billion in total value locked (TVL), according to stakingrewards.com.

"We have spoken with dozens and dozens of large Bitcoin DeFi users and funds keen to put their Bitcoin holdings to work earning yield," said Alexei Zamyatin, co-founder and CEO of Build on Bitcoin.

The Future of DeFi: Opportunities and Challenges

As the DeFi space continues to evolve, it’s essential to consider both the opportunities and challenges ahead. With agentic AIs, RWA tokenization, and Bitcoin staking ETFs poised to drive growth, the next year is expected to be a pivotal moment for the industry.

"It’s OK if you don’t know exactly what’s going to happen," said Hougan. "As long as you know that something is happening that’s really potentially significant and you want exposure to it."

Conclusion

The decentralized finance (DeFi) space is on the brink of an inflection point in 2025, driven by Bitcoin staking, RWA tokenization, and agentic artificial intelligence. As we look ahead, it’s essential to consider both the opportunities and challenges that lie ahead.

With the potential for significant growth, now is the perfect time to explore the DeFi space and uncover new financial opportunities. Stay tuned for more insights and analysis from Cointelegraph as we continue to break down the latest DeFi developments.

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A Pro-Crypto President? Trump’s Administration Pledges Support for Digital Assets

As Donald Trump prepares to take office, his administration has shown a clear affinity for digital assets. The president-elect himself has acknowledged investing in cryptocurrencies, and several of his nominees have disclosed or discussed their exposure to these assets through asset ownership or business interests.

A Pro-Crypto Cabinet?

One of the most notable examples is Robert Kennedy Jr., Trump’s pick to be Health and Human Services secretary. Kennedy has been a long-time advocate for cryptocurrency and has spoken at numerous bitcoin conferences, including the Bitcoin 2024 conference in Nashville, Tennessee. According to federal filings, Kennedy owns between $100,001 and $250,000 worth of bitcoin.

Another nominee with ties to cryptocurrency is Howard Lutnick, who has been tapped to become Commerce secretary. As CEO of Cantor Fitzgerald, a Wall Street firm that manages the US Treasurys backing Tether’s stablecoin (USDT-USD), Lutnick has a clear conflict of interest in his nomination. However, he has pledged to divest his interests in Cantor and related companies "to comply with US government ethics rules."

Vice President-Elect JD Vance: A Crypto Enthusiast?

Vice president-elect JD Vance has also shown an affinity for digital assets. According to federal filings, Vance owns between $250,000 to $500,000 worth of bitcoin. While it’s not known if he still holds these assets, his enthusiasm for cryptocurrency is clear.

A Conflict of Interest?

While Trump and his nominees have pledged to support digital assets, their investments in these assets could create conflicts of interest. According to the Office of Government Ethics (OGE), government officials are required to divest any assets that present potential conflicts of interest central to their duties. This rule applies to digital assets, which could create a complex web of interests for Trump’s administration.

Trump’s Investment in Ethereum

In August, Trump disclosed owning between $1 million and $5 million worth of ethereum (ETH-USD), the world’s second-largest cryptocurrency. While this investment is not directly related to his duties as president, it suggests that he has a clear interest in digital assets.

The Trump Family Connection

Trump’s sons are also involved in promoting World Liberty Financial, a crypto project they have been touting on social media. In exchange for this promotion, a Trump family-owned limited liability corporation receives 22.5% of the project’s crypto token (WLFI-USD) along with 75% of any net revenues after World Liberty earns $30 million.

A Pro-Crypto President: Implications and Concerns

While Trump’s administration has shown a clear affinity for digital assets, there are concerns about potential conflicts of interest. According to Ian Katz, managing director with Capital Alpha Partners, "Certainly, you have a lot of people in this administration that are coming in that have interests in crypto. They have an interest in crypto doing well and thriving, even if they have to divest holdings."

A Look at Trump’s Nominees

Here is a list of Trump’s nominees and their connections to digital assets:

• Robert Kennedy Jr., Health and Human Services secretary nominee: owns between $100,001 and $250,000 worth of bitcoin
• Howard Lutnick

Powell’s Comments at the DealBook Summit

On December 4th, United States Federal Reserve Chair Jerome Powell reiterated his view that Bitcoin is a direct competitor to gold and not a threat to the US dollar. In an interview with The New York Times-hosted DealBook Summit in New York, Powell made it clear that people use Bitcoin as a speculative asset rather than a form of payment or store of value.

Bitcoin as a Speculative Asset

"People use Bitcoin as a speculative asset," Powell said during the summit. "It’s just like gold, only it’s virtual, it’s digital." This comment highlights the volatility associated with cryptocurrencies like Bitcoin and suggests that they are not a reliable store of value. The Federal Reserve Chair has made these comments before, comparing Bitcoin to gold during an event hosted by the Bank for International Settlements in March 2021.

The Rise of Bitcoin

Since Powell’s previous comments, Bitcoin has seen significant growth, soaring 70% compared to a 52% increase in gold over the same period. This rise can be attributed to various factors, including increased adoption and growing interest from institutional investors.

Bitcoin vs. Gold

Powell’s statement that Bitcoin is not a competitor for the US dollar but rather a competitor for gold has been met with mixed reactions. Some argue that the Federal Reserve Chair’s comments are an attempt to downplay the significance of Bitcoin as a potential threat to the US dollar. However, it’s essential to note that Powell’s comments were made in the context of comparing Bitcoin to gold, which is often seen as a hedge against inflation and market volatility.

Consumer Protection

During the summit, Powell also emphasized the importance of consumer protection when dealing with cryptocurrency companies doing business with banks. The Federal Reserve Chair noted that while they do not directly regulate this area, ensuring the health and well-being of these institutions is crucial for maintaining financial stability.

The Future of Cryptocurrency Regulation

Powell’s comments come at a time when the US government is undergoing changes, with President-elect Donald Trump selecting crypto advocates to lead key departments. Scott Bessent, a hedge fund manager, has been chosen to lead the Secretary of Treasury department, while Howard Lutnik, CEO of Cantor Fitzgerald, will head the Commerce department.

Trump’s Impact on Cryptocurrency

Donald Trump’s presidential election win in November has resulted in an overhaul of the US cabinet. The President-elect has reportedly been critical of Powell’s decision-making, but the Federal Reserve Chair has asserted that he won’t resign if Trump tries to push him out. Meanwhile, Trump selected crypto advocate Paul Atkins to become the new chair of the Securities and Exchange Commission after Gary Gensler announced his resignation when Trump is inaugurated on January 20.

The Rise of Ethereum and Solana

As Bitcoin continues to rally towards its all-time high, other cryptocurrencies like Ethereum and Solana are gaining attention. The price of Ethereum has surged in recent months, pushing it closer to surpassing the $100,000 milestone. Meanwhile, Solana has seen significant growth, with its price increasing by over 70% in the past month.

Conclusion

Jerome Powell’s comments at the DealBook Summit reiterate his view that Bitcoin is a direct competitor to gold and not a threat to the US dollar. The rise of Bitcoin and other cryptocurrencies like Ethereum and Solana highlights the growing interest and adoption of digital assets. As the US government undergoes changes, it will be essential to monitor the impact on cryptocurrency regulation and its potential effects on the market.

Related Articles

• Bitcoin Was Pronounced Dead 415 Times, Now It Battles for $100K
• Comeback 2025: Is Ethereum Poised to Catch Up with Bitcoin and Solana?

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The Promise of Bitcoin: Challenges and Opportunities

Bitcoin (BTChas always been touted as a revolutionary technology with immense potential to transform the global financial landscape. Its decentralized and trustless nature has garnered significant attention from developers, investors, and users alike. However, as its popularity grows, so do the challenges that come with it. One of the primary concerns is scalability – the ability of Bitcoin’s underlying infrastructure to handle an increasing number of transactions and users.

Scalability: The Achilles’ Heel of Blockchain

While the core layer of Bitcoin remains robust, the scalability issue becomes increasingly evident during testnets – simulated ecosystems designed to mimic real-world usage. Public testnets, intended for developer testing, often struggle to cope with high demand, exposing weaknesses in the broader blockchain infrastructure.

A recent event has underscored this scalability challenge. The testnet launch of Portal to Bitcoin, a bridgeless crosschain infrastructure, began as a controlled experiment but quickly turned into an unplanned stress test. Initially designed to handle a few thousand testers, the rollout attracted over 100,000 users in just 36 hours.

The Overwhelming Response: Bottlenecks and Challenges

While this overwhelming response demonstrated the platform’s appeal, it also exposed critical bottlenecks in the existing blockchain testnet infrastructure:

• Scalability limitations of current Bitcoin testnets: The inability to handle high demand and user growth.
• Lightning Network constraints: The inherent challenges posed by the Lightning Network, a second-layer scaling solution for Bitcoin.

Addressing Challenges: Lessons Learned

The Portal team effectively addressed these challenges through swift and innovative action, offering valuable insights and guidance for blockchain developers navigating similar obstacles. By forking infrastructure, managing faucets, implementing dynamic fees, and developing exchange protocols, browser extensions, and mobile applications, the team stabilized the testnet and maintained user engagement.

Lessons for the Blockchain Ecosystem

The testnet provided invaluable insights into the complexities of crosschain interoperability and the paramount importance of user experience. The community’s support was a key driver of this progress, with users instrumental in identifying bugs, suggesting features, and validating improvements.

In response to user feedback, Portal introduced a seven-day cohort program, addressing congestion issues while maintaining a balanced testing environment. This community-centric approach solved immediate scalability concerns and laid the groundwork for a more resilient and scalable mainnet launch.

Road to the Mainnet

By the end of the challenging testnet phase, Portal showcased its capability to execute fast, non-custodial swaps between major blockchains. The team made strides in enhancing transaction processing times through innovative optimizations and established a robust, feedback-driven development pipeline for continuous improvement.

Strengthened by the lessons learned during this intensive testing period, the team is focused on expanding blockchain support, improving the platform’s user interface, and conducting comprehensive security audits. The testnet experience has turned the crisis into an opportunity to learn and grow, and Portal is working toward a smooth transition to the mainnet.

The Broader Implications

The lessons learned during this ambitious testnet phase extend far beyond a single project, highlighting the broader challenges and possibilities within the blockchain ecosystem. As decentralized technologies evolve, they must address today’s demands while anticipating tomorrow’s exponential growth.

In conclusion, the promise of Bitcoin is accompanied by significant challenges that require innovative solutions. By addressing these challenges through community-centric approaches and robust development pipelines, projects like Portal to Bitcoin can pave the way for a more scalable and user-friendly blockchain ecosystem.

The data from Farside Investors indicates that the total net inflows into Ether exchange-traded funds (ETFs) have surpassed $2.6 billion in December, marking a significant milestone for these funds.

Ethereum vs Bitcoin: The ETF Competition Heats Up

In November and December, Ether ETFs experienced eight straight weeks of net inflows, with a record-breaking $2.2 billion in the week of November 26. This surge in popularity can be attributed to the growing adoption of Ethereum (ETH) as a viable alternative to Bitcoin (BTC). According to CoinShares data, Ether ETFs still lag behind BTC ETFs, which closed out 2024 with net inflows exceeding $35 billion.

Analysts Predict Reversal in Favor of ETH ETFs

According to analysts, this trend could reverse in 2025, especially if ETH’s price performance enhances ETF returns and regulators allow the funds to generate yields from staking. Staking is a process that enables users to earn rewards by holding and validating transactions on the Ethereum network.

Top Ether Funds: BlackRock Leads the Pack

Among the top Ether funds, BlackRock’s iShares Ethereum Trust (ETHA) led the pack with net inflows of over $3.5 billion in 2024. Fidelity’s Ethereum Fund (FETH) notched second place with $1.5 billion in net inflows. However, Grayscale’s Ethereum Trust (ETHE), which was launched in 2017 as a non-listed trust, saw net outflows of over $3.6 billion.

The Rise and Fall of Grayscale’s ETHE

Grayscale’s ETHE charges management fees of 1.5%. In July, the asset manager listed Grayscale Ethereum Mini Trust as a cheaper alternative. Despite this move, Grayscale’s ETHE continued to experience significant net outflows. This highlights the growing competition in the ETF market and the need for fund managers to innovate and adapt to changing investor preferences.

Will ETH Outperform BTC ETFs in 2025?

Since November, ETH has outperformed BTC in crypto spot and derivatives markets, according to a December report by Bybit, a leading cryptocurrency exchange. This trend could continue into 2025, especially if Ethereum’s network activity increases due to the proliferation of artificial intelligence agents.

Matt Hougan on Ethereum’s Potential

In an interview with Cointelegraph, Matt Hougan, Bitwise’s head of research, noted that sustained growth in network activity, including from AI agents, could further propel Ether’s performance. Ethereum and Base, an Ethereum layer-2 scaling network, are "where many AI agents are currently operating," according to Hougan.

VanEck Predicts ETH Price Surge

Asset manager VanEck estimates Ether’s spot price will reach $6,000 by the fourth quarter of 2025. This prediction highlights the growing optimism surrounding Ethereum’s potential for growth and adoption.

Conclusion

The surge in net inflows into Ether ETFs is a significant milestone for the cryptocurrency market. With sustained growth in network activity and increasing adoption, ETH could potentially outperform BTC ETFs in 2025. As regulators continue to allow staking yields from ETH funds, investors may find more attractive options in the Ethereum ecosystem.

Related Articles

• Staking may come soon for US Ether ETFs: Bernstein
• 5 real use cases for useless memecoins

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As the popularity of blockchain gaming continues to grow, several challenges must be overcome for the industry to remain viable in 2025. Tobin Kuo, CEO of blockchain gaming company Seraph, shared his insights with Cointelegraph on the hurdles that GameFi needs to tackle.

Sustaining Player Engagement

According to Kuo, over 60% of players disengage from Web3 games after only 30 days. The main reasons behind this problem are a lack of long-term incentives and poor gameplay mechanics. Kuo emphasized that game developers must prioritize player-centric design, focusing on immersive storytelling, skill-based rewards, and game mechanics that go beyond ‘earn-first’ models.

"As the attention economy accelerates, projects must prioritize player-centric design, focusing on immersive storytelling, skill-based rewards, and game mechanics that go beyond ‘earn-first’ models instead of relying on trend-based attention." – Tobin Kuo, CEO of Seraph

Adopting New Technologies

To overcome these challenges, building better blockchain games in 2025 requires integrating new technologies, such as generative AI. According to Kuo, projects that fail to integrate nascent tech typically record 30% to 40% reductions in player retention compared with those embracing new technologies.

Poll Results: Biggest Negative Impacts on GameFi

A poll of Web3 gaming professionals conducted by the Blockchain Game Alliance reveals the biggest negative impacts on the GameFi sector in 2024:

• Poor user experience (UX) and complex user interfaces (UI): 53%
• Complexities in setting up a crypto wallet: 11%
• Poor gameplay experiences: 33%

Building Sustainable In-Game Economies

Unstable in-game economies are a leading cause of project insolvency. Kuo emphasized the importance of building sustainable token models for Web3 games that control inflation and feature data-driven player rewards. Strategies such as dynamic loot distribution, staking-based rewards, and player-controlled economies via decentralized autonomous organizations (DAOs) are likely to emerge as best practices for sustainable GameFi development.

Case Study: Clicker Games

Clicker games like Hamster Kombat have captured headlines in recent months. The game surpassed 300 million users in less than five months but experienced an 86% reduction in active users following a token airdrop, which was considered the largest in crypto history. As of November, the game only had 41 million players compared with the 300 million peak levels recorded during the summer.

State of the Blockchain Gaming Industry in 2024

The Blockchain Game Alliance (BGA) recently released its ‘2024 State of the Industry Report,’ which polled 623 professionals from the Web3 gaming industry. According to the report, approximately 53% of respondents indicated that poor user experience (UX) and complex user interfaces (UI) present the biggest challenges to onboarding new players to Web3 games.

Key Findings: BGA’s 2024 Report

• Poor UX and UI: 53%
• Complexities in setting up a crypto wallet: 11%
• Poor gameplay experiences: 33%

The Importance of Abstracting Away Blockchain Features

Long Do, CEO of Anomaly, emphasized the importance of abstracting away blockchain features so players do not know they are interacting on-chain. This approach is key to driving adoption and making Web3 games more accessible to mainstream gamers.

A Glimpse into the Future: 2025 and Beyond

As the industry continues to evolve, it is clear that sustainability, innovation, and player-centric design will be crucial for GameFi’s success in 2025. With the rise of new technologies and the growing demand for immersive gaming experiences, the future of blockchain gaming looks bright.

Conclusion

Blockchain gaming faces several challenges in 2025, but with a focus on player-centric design, innovation, and sustainability, the industry can overcome these hurdles. By prioritizing user experience, integrating new technologies, and building sustainable token models, game developers can create engaging and rewarding experiences for players. As the industry continues to evolve, one thing is clear: the future of blockchain gaming holds immense potential.