By James Morgan
Compiled by: Vernacular Blockchain
Cryptocurrency is now at a more mature and clear stage than ever before. Although the market still has hype cycles, many areas in the industry have demonstrated product-market fit (PMF) and have real application value beyond speculation. Other areas are still in the experimental or problem stage, and unresolved challenges hinder their mass adoption.
This article will unpack the key drivers driving mass adoption, exploring the segments that have already seen success, as well as those that still face significant hurdles.
1. Core technology driving force: the cornerstone of cryptocurrency growth
1) Low-cost block space: L2 and high-throughput L1
A major breakthrough in the crypto industry is the significant reduction in transaction costs. The introduction of scalable Layer 2 (L2) Rollups and high-throughput Layer 1 (L1) blockchains has made it easier for developers to build efficient and easy-to-use applications.
L2 Scaling Solutions - Ethereum Rollup solutions such as Arbitrum (arbitrum.io), Optimism (optimism.io), and Polygon (polygon.com) provide faster and lower-cost transactions while maintaining a high degree of decentralization and openness.
High-throughput L1 alternatives — Solana (solana.com), Aptos (aptosfoundation.org), and Sui (sui.io) — use parallel execution and different decentralization tradeoffs to achieve high-speed, low-cost transactions.
Reasons for growth: Lower transaction costs reduce the entry barriers for developers and users, promoting the accelerated popularization of DeFi, games, and asset tokenization.
2) Wallet upgrade and seamless user experience (UX)
One of the biggest barriers to cryptocurrency adoption has been the complex onboarding process, but this has been greatly improved and will continue to be improved in the coming months.
Smart contract wallets - Smart wallets such as Safe (safe.global) and Coinbase Wallet (coinbase-smart-wallet) introduce gas-free transactions, automatic recovery, and multi-signature security mechanisms. They also support user gas fee payment and chain abstraction, greatly improving the user experience.
Social login and keyless authentication - With the help of tools such as Web3Auth and Privy, users can access their wallets directly through email or mobile phone numbers without the cumbersome management of mnemonics.
Crosschain Intents — Advanced wallets and DApps are integrating cross-chain infrastructure and supporting standards such as EIP-7683, enabling users to seamlessly manage multi-chain assets and perform transactions through an “intent mechanism”.
Reasons for growth: Lowering the threshold for interaction and making it easier for non-technical users to enter, the user experience of crypto applications is gradually moving closer to traditional financial technology, promoting wider adoption.
2. Crypto Industry Landscape in 2025: Bitcoin, a Proven and Highly Growing Crypto Use Case
ETFs: Catalyst for Institutional Entry
One of the most important financial milestones for Bitcoin was the approval and launch of a spot Bitcoin ETF in the United States, which triggered a large amount of institutional investment. For the first time, regulatory clarity did not hinder cryptocurrency, but promoted its development.
Institutional ETF layout - BlackRock, Fidelity, and Grayscale have now launched regulated Bitcoin and Ethereum ETFs, making it easier for hedge funds, pension funds, and retail investors to obtain compliant exposure to crypto assets.
Capital influx - These ETFs have attracted billions of dollars in inflows, further solidifying Bitcoin's position as a new asset class in the financial industry, especially in the current uncertain market environment.
Traditional finance acceptance - ETFs allow institutions to hold Bitcoin and Ethereum in a compliant, tax-efficient manner, similar to the adoption model of early gold ETFs. In the coming years, more cryptocurrency-based ETFs will inevitably be launched.
Reasons for growth: Bitcoin is now seen as "digital gold", while Ethereum may be compared to "income bonds". The widespread interest of institutions has verified its value as a long-term hedge against inflation and fiat currency instability. As the regulatory framework becomes clearer, the sense of security of institutional entry has increased, bringing more liquidity, wider adoption, and a deeper integration of the crypto industry with traditional finance.
3. Stablecoin: The “killer” application in the payment field
Stablecoins have become the most widely used financial product in the cryptocurrency field, effectively solving practical problems and inefficiencies in payments and cross-border remittances.
The circulation scale exceeds $220 billion - USDT (tether.to) and USDC (circle.com) dominate global crypto payment transactions.
Payments and Remittances - Applications such as Strike (strike.me) use stablecoins to achieve instant cross-border transfers with almost zero fees, greatly reducing the cost of international payments.
Traditional finance (TradFi) adoption - Coinbase connects TradFi and DeFi through Base, PayPal launched PYUSD, and major banks are also exploring the application of tokenized deposits.
Better payment network - SpaceX uses USDC to process payments for Starlink customers, especially in countries with large currency fluctuations, to avoid foreign exchange risks and optimize the payment process through stablecoins.
Reasons for growth: Stablecoins offer a faster, cheaper, and more efficient way to transfer funds, which has a natural advantage over the traditional banking system. Ultimately, users may not be aware of which payment network they are using, but stablecoins will undoubtedly replace traditional, slow, and inefficient payment infrastructure.
4. DeFi: The cornerstone of on-chain finance
Despite security breaches and market volatility, DeFi protocols remain a core pillar of on-chain finance and continue to grow. I remain a firm believer in the huge advantages of DeFi in permissionless, decentralized, and fair financial services.
On-chain lending — Protocols such as Aave and Compound provide instant, permissionless credit markets without the need for traditional financial institutions.
Automated Market Makers (AMMs) — Decentralized exchange protocols such as Uniswap and Curve process billions of dollars in transactions every day without the need for intermediaries, increasing market liquidity.
Tokenization of Real World Assets (RWA) - Ondo Finance and Maple Finance bring traditional financial assets onto the chain to achieve more efficient financial infrastructure.
Reasons for growth: DeFi has a faster, more efficient, and globally accessible financial system, while providing higher yields than traditional banks. Composable Money makes capital flows more flexible, promotes the emergence of innovative financial models, and can also integrate with existing financial concepts to create new growth points.
5. Tokenization of Real World Assets (RWA): The Future of Institutional Adoption
RWA is one of the areas of greatest interest to institutions. Major financial institutions are actively tokenizing assets such as bonds, real estate, and raised credit to promote the migration of traditional finance to the chain.
Raising credit & bonds - Companies such as Centrifuge (centrifuge.io) tokenize debt instruments, lowering the barrier to financing and making capital more accessible.
Fragmented ownership - Related platforms allow users to hold real-world assets such as real estate in shares, lowering investment barriers and improving market liquidity.
Collectibles as RWAs — Platforms such as Courtyard.io support the custody, tokenization, and trading of physical assets, making the collectibles market more transparent and tradable.
Reason for growth: Introducing traditional financial assets onto the chain makes the capital market more liquid, efficient and transparent, and creates new opportunities for institutional investors.
6. Memecoins: Turning speculation into a “function”
Despite the criticism, Memecoins remain the crypto market’s most enduring speculative asset and continue to attract funding and attention.
The rise of popular tokens - Memecoins such as PEPE, DOGE, SHIBA, etc. have a market value of billions of dollars, and thousands of new meme tokens emerge every day.
Trading volume exceeds "serious" tokens - In some periods, the trading volume of Memecoins even exceeds that of mainstream crypto assets, and even the president and his team have participated in it, boosting market sentiment.
Reasons for growth: Speculation is human instinct, and Memecoins cleverly combines virality, cultural resonance, and a "gambling" trading experience to make the crypto market more entertaining. "Meme Token" and "Meme Infrastructure" will continue to rise and fall in the market and become an indispensable part of the ecosystem.
7. Digital Product Passports (DPPs) and Product Tokenization
Luxury brands and businesses are leveraging blockchain-based verification systems to improve product authenticity and supply chain transparency.
DPP as a Service (DPPasS) — Platforms such as Arianee and Crossmint are driving the development of DPP solutions, and there are also multiple non-blockchain DPP service platforms (DPaS) joining the competition.
Luxury brands lead the trend - Luxury brands such as LVMH, Prada, Breitling, Cartier, etc. have taken the lead in adopting DPP technology and are driving the entire high-end consumer goods industry towards blockchain verification.
EU regulation drives mass adoption - The EU's DPP regulatory framework is an important driver of growth in this area. However, if the EU relaxes regulation, this process may be delayed. However, no matter how the regulation changes, blockchain remains an ideal technical support for product passports (DPP) in multiple scenarios such as authenticity verification and traceability.
Reasons for growth: Companies need transparent, counterfeit-proof product tracking systems, and upcoming regulations (such as the EU's DPP program) are accelerating the adoption of this trend.
8. Problem areas that remain
While some areas of the crypto industry have proven their value, there are still some tracks that are in an uncertain, over-hyped or early experimental stage. These areas face technical, regulatory or adoption challenges, and it will be difficult to achieve mass adoption until these problems are solved.
DAO (Decentralized Autonomous Organization) - Low governance participation, inefficient decision-making, and chaotic fund management are still the main pain points of DAO. Although DAOs such as ENS and Gitcoin operate well, most DAOs still find it difficult to find a balance between decentralization and governance efficiency. I am optimistic about the combination of AI and DAO as a possible solution - ironically, DAOs may need AI to truly demonstrate their value and even expose the true nature of decentralized governance.
AI & Crypto - In addition to speculation, the current practical application cases of AI + crypto are still limited. Although decentralized AI projects such as Bittensor and Render Network are interesting, they are still niche tracks, and most AI Token adoptions are still limited to low value-added applications such as Meme AI robots. The intersection of AI and crypto still needs breakthrough practical use cases to truly explode.
Gaming & Metaverse — Web3 games have yet to deliver on their promise, the Play-to-Earn model is almost dead, and blockchain integration has degraded the gaming experience. The hype around the Metaverse has cooled, and the failure of some high-profile projects (such as Meta’s VR strategy transition and Decentraland’s stagnation) shows that users are not willing to enter the virtual world just for the “Metaverse”. However, I still look forward to the development of AR (augmented reality) glasses, which may bring a hybrid “Meta-Metaverse” experience and promote a new round of exploration in the industry.
9. Final Thoughts: What’s Next?
As the crypto industry continues to evolve, the next wave of growth will likely be driven by a combination of major technological breakthroughs, regulatory changes, and emerging narratives. Here are some thoughts on the future…
On-Chain Finance will expand further - Stablecoins are still growing rapidly, and RWA tokenization will integrate traditional capital markets with DeFi, which is expected to attract trillions of dollars of institutional funds. The key issue is the speed of regulatory progress, which will determine whether this change can be truly implemented.
Bitcoin’s role will change - as ETFs attract institutional investment, Bitcoin may gradually erode the global digital reserve asset market share, or it may remain just a value storage tool that lacks scalability and is replaced by more functional blockchains.
The ETH ETF that pledges collateral will disrupt traditional finance (TradFi) - once the ETF that supports staking income goes online, Ethereum may become the first cryptocurrency to be regarded as an "income-generating asset", changing the structure of investment portfolios and posing a direct challenge to the bond market.
Identity authentication will become a key area - With the explosive growth of AI deep fakes, fraud and robot activities, crypto-native identity solutions (zero-knowledge proofs, WorldCoin, DID standards) will either gain widespread adoption or become a regulatory nightmare. If the latter happens, we may become "digital puppets" of AI or governments and enterprises.
Tokenized products & consumer adoption - Can NFT break through the attributes of collectibles and integrate into real business scenarios? If brands and companies can successfully integrate DPP (digital product passport) in depth and create enough value for users, blockchain may quietly become the infrastructure in the field of retail e-commerce.
Memecoins and speculation will not disappear - Despite the controversy, Memecoins prove the essence of the crypto market: speculation, community-driven, and viral narratives. In the future, they may evolve into a new type of social finance, or they may just be an endless hype cycle. But in any case, I will not easily bet on the failure of the casino.
The next few years will determine whether cryptocurrencies are fully integrated into the global financial system or continue to exist as a "niche market" with high risk and high returns. Which narratives will dominate the next cycle? The answer is still being written.
