What Will Happen in Crypto in 2025?

No one can predict the future, but that doesn’t mean it’s completely unpredictable. Even with Bitcoin crossing $100,000 and XRP soaring in 2024, Phemex has stuck to its strategic plan throughout the past year.

Despite the uncertainty and the need to seize immediate opportunities during changing market conditions, the leading hybrid futures exchange has thrived in the past year by spotting and anticipating the trends that have emerged in the space in recent times. Phemex is in the best position to make a successful prediction for 2025.

Memes and Other Thematic Trends

One of the leading trends in the crypto space has been the resurgence of meme coins, which Phemex predicts will continue into 2025 and beyond. As an example, PEPE, which is associated with a popular meme, is one of the most famous coins, with a market cap of over $8 billion.

“Meme coins are likely to be around for some time,” says Phemex CEO Federico Variola. “Their popularity is due to viral marketing and community activity, which is currently gaining momentum.”

The fast-moving nature of meme coins makes it difficult for exchanges to list them quickly. Timing is key. By listing PNUT early on Phemex, users were able to reap tangible benefits, as Phemex traders who joined the campaign early saw their profits increase by 10x, and the token’s market cap skyrocketed. Phemex is rightly considered one of the leading exchanges that has been most effective and insightful in listing trending coins.

However, even meme coins require some kind of utility protocol in the background to ensure that they can be traded according to the specific rules set by the crypto space. Until recently, this coin was ETH. However, Ethereum now has serious competition from Solana and its SOL token, which is gaining popularity among retailers.

“A large part of Solana’s success is due to its functions as a hub for new trends like meme coins,” Variola said. “Its ability to handle large volumes of low-cost transactions attracts users and facilitates the launch of meme coins. This has proven to be a much better user experience compared to the L2s sharding that Ethereum chose to solve its scaling problems.”

Another trend change, according to Phemex, is the decline of venture capital dominance in cryptocurrency, as leading opinion leaders and content makers become more established. Venture-backed tokens have underperformed, according to Variola, prompting a re-evaluation of investment strategies.

But the most significant outlook for 2025 may be the growing challenges facing centralized exchanges. The first of these challenges is the constant quest for liquidity. This is especially true for meme tokens, whose market price may not accurately reflect their true, rather fuzzy value.

Some tokens are backed by special market makers hired by the token team, which can create conflicts of interest, unreliable liquidity, and unfair price action. While exchanges must adapt to trends like meme coins, they also serve as gatekeepers of user funds. So choosing the right exchange with high liquidity is critical.

Phemex prioritizes liquidity without sacrificing security. The cold wallet system reliably protects users' funds, and stable liquidity ensures uninterrupted trading. In addition, Phemex's Proof of Reserves tool allows users to verify the security of their assets. It is the first exchange to publish documents confirming both reserves and solvency.

A separate obstacle for CEX, in addition to liquidity, is the lack of effectiveness of tokens with classical funding. As meme tokens gain popularity, traditionally funded utility tokens lose their appeal, which may lead to a reorientation of investors.

“As exchanges, we strive to find the right balance to meet the diverse interests of investors. By offering a wide range of utility and meme tokens on both spot and contract markets, we meet these needs,” Variola notes. “We currently offer a wide range of 335 contracts and 398 spot trading pairs, with more constantly growing. To accommodate changing narratives and trends, we have also implemented tools such as iceberg orders, multiple watchlists, and basket orders designed to enhance user control and mitigate risk.”

Looking ahead

Perhaps Variola’s simplest prediction for the new year is the continued dominance of Bitcoin, specifically BTC.

“BCH and BSV have struggled to achieve the same level of adoption and recognition as BTC,” he noted. “While they have supportive communities, their market performance has been modest compared to BTC’s recent surge to surpass the $100,000 mark.”

Phemex also expects a DeFi renaissance. Regulatory changes, especially after the US elections, could spark a resurgence of DeFi protocols.

“The election of a crypto-focused administration is expected to spur a more favorable regulatory environment for digital assets,” Variola continued. “This includes potential legislative changes, greater institutional adoption, and the introduction of Bitcoin-backed financial products. This could increase the integration of digital assets into the global financial system, potentially leading to greater stability, adoption, and market growth.”

Phemex expects two key investment strategies to shape the company’s growth through 2025. The first is a bifurcation in the blockchain ecosystem. On the one hand, institutional chains like Ethereum will likely focus on real-world asset integration and centralized infrastructure. On the other hand, retail-focused chains like Sui and Solana could thrive thanks to their appeal to meme enthusiasts and casual traders.

Hybrids in Action

Finally, Phemex predicts that its recipe for success will serve as a model for others in the crypto exchange space.

According to Variola, exchanges will increasingly move operations on-chain, and platforms will expand their user base.

However, CEXs are not going anywhere either. A significant segment of the market favors them due to their deep liquidity, user-friendly interface, margin trading capabilities, and other features. They attract the attention of both beginner and institutional investors by providing customer support and complying with KYC and anti-money laundering regulations. Still, Phemex sees an inevitable pivot toward DeFi, though not quite yet.

“We saw this need early on and established ourselves as a hybrid exchange back in 2022,” Variola recalls. “As hybrid platforms continue to grow, Phemex will remain committed to expanding our online offerings, allowing users to enjoy the benefits of decentralized governance combined with centralized efficiency.”