2024 was an extremely strong year for the digital asset ecosystem, and not just because Bitcoin hit new all-time highs, making headlines globally. While mainstream recognition is nice to have, it isn’t the first time cryptocurrency prices have hit the newsfeed, and it certainly won’t be the last. The most important information lies within blockchain usage statistics and regulatory clarity.
Throughout the past year, we witnessed record DEX volume and onchain user growth, from Solana’s widely reported transaction spike during the meme craze and launch of Pump.fun, to the emergence of Coinbase’s blockchain (Base) as a home for AI agents and infrastructure. Regulatory clarity began to emerge as well, with the acceptance of spot Bitcoin and Ethereum ETFs and multiple marquee victories for digital asset companies against the SEC, most notably Ripple (XRP - a true retail favorite).
The incoming Trump administration is the first of its kind to speak on the importance of a clear and friendly regulatory framework for the crypto industry and to appoint pro digital asset cabinet members including David Sacks as ‘Crypto and AI Czar’. This regime shift gives a green light for US-based founders to access capital and talent to create a new wave of blockchain-enabled products.
However, the main reason 2024 was a historic year in the digital asset realm is the launch of the Digital Innovation Fund (obviously).
2025 Predictions and Market Theses
The total market capitalization of all digital assets on January 1st, 2025, sat at 3.35 trillion with Bitcoin dominance at 56%. For comparison, the market capitalization of $NVDA was 3.37 trillion. We point this out to underscore that, from a macro perspective, the ecosystem is still in its infancy when compared to the capital invested in individual companies, let alone entire markets.
Many of the inherent risks in prior cycles stemmed from the real possibility that digital assets would never be institutionally legitimized (see EOY 2022 post-FTX where widespread sentiment among traditional finance and government representatives was that the industry was dead). Now that it’s become clear the industry is resilient and here to stay, start-ups will flock to the blockchain as an attractive venue to raise capital and participate in the onchain economy.
For example, Base has grown to more than $5B in Total Value Locked (TVL) from less than $1B just a year ago, taking the number six spot for TVL. We believe Base will continue to experience volume inflows from the likes of Solana as onchain activity continues to expand. Base offers low fees, aggregated UX features, and ease of onboarding through Coinbase interconnectivity. Building on Base will become an attractive option for US-based start-ups as it evolves into a hub for DeFi and AI development in the digital asset ecosystem.
Onchain digital assets will become more liquid and narrative-correlated due to an increase in DEX users and trading bots
As major asset classes trend toward higher indexing and tighter correlations, crypto is following the same trajectory. Large cap digital assets have deep price correlations to each other as well as equity indices (Nasdaq, S&P 500). The price movements of major digital assets like BTC also impact long-tail digital assets, due primarily to shifts in sentiment. Limited onchain liquidity, a lack of tooling, and a general misunderstanding of these assets has historically pushed away trading shops from taking advantage of this correlation.
A recent surge in activity onchain sparked the rollout of tools that abstract away the difficulties of interacting with the blockchain. These tools have made DEXs more accessible for users and lay the groundwork for advanced trading models to come on chain. Particularly in low fee, high volume environments like Solana and Base, trading scripts capture low hanging fruit beyond delta-neutral MEV and arbitrage. Bots also use price impact hunting, mean-reversion strategies, and wallet copy-trading—which is just the start of it.
We predict these models will become significantly more advanced, categorizing actively traded tokens by narrative (AI, DePin, DeSci) and referencing variables like majors’ price action, peer token performance, and social sentiment to trade across pairs. These assets have a lack of liquid derivative markets, forcing bots to purchase tokens on the open market and thereby increase volume and liquidity. While liquidity growth will make onchain assets more attractive to investors, the subsequent increase in price correlation heightens the importance of identifying future narratives and allocating appropriately at early stages.
The novelty of memes is dead
For years, memes have acted as the most trivial class of digital asset, leaving blockchain enthusiasts split on their usefulness in the space. Some individuals have argued that memes are a distraction, given that the assets have no underlying value, revenue streams, or backing from an entity. Others believe meme assets, which advertise their lack of utility, offer the truest sense of an investment vehicle, one which does not meet the Howey Test and has no risk of security designation by the SEC. All traders operate with equal information, trading it on social metrics like virality and community around the specific meme.
In the past, tokens on the blockchain held some perceived value based on the expertise and technical knowledge required to create and deploy them. For years we saw memes getting bid for this reason. In 2024 we witnessed the emergence of no-code token launching platforms such as Pump.fun, which allowed any blockchain user to deploy a token instantly and in a standardized manner. This development added strong protections from a contract risk perspective (locked liquidity and no malicious functions in contract), while completely removing the barrier to deploy tokens.
Public access to one-click token deploys removed the perception of a token having inherent value simply because it existed on the blockchain. As of January 1st, 2025, over 5.3 million tokens were launched on Pump.fun alone, averaging 15,000 new tokens per day since the platform’s launch a year earlier. While there will continue to be significant upside for meme tokens that grow alongside an ecosystem or are tied to cultural moments, like Donald Trump’s launch of $TRUMP before the inauguration, the days of every meme token having value simply by virtue of existing are over.
Decentralized finance (DeFi) applications will see a resurgence in interest as new capital looks for yield onchain, sparking a host of new applications
For years, DeFi has been cited as one of the clearest value-adds to traditional finance. The value proposition is simple and makes sense: provide market participants with the ability to supply and borrow assets at the consensus market rate without paying an institution to act as the middleman. DeFi smart contracts allow for this to occur in an efficient manner on chain.
When ‘DeFi Summer’ happened in 2020, new lending protocols launched seemingly every day and offered inflated APYs driven by protocol token incentives. Soon after, many of these new protocols experienced smart contract exploits, draining funds and pushing away many market participants. Since 2021, smart contract audits and bug bounties have drastically reduced these risks, with many DeFi protocols handling billions in volume.
DeFi is beginning to integrate new technologies that dramatically expand the capability of these platforms. For example, DeFi has lagged its centralized competitors due to a lack of reliable offchain state verification, making undercollateralized loan options nearly nonexistent. While you can take out an overcollateralized loan on Aave by leveraging your wallet balance, it is not as easy to tap into your home equity or stellar credit score for an onchain loan.
zkTLS, also known as web proofs, verifiably pulls real-time data about a user from offchain sources—such as a bank, a Fidelity portfolio, a FICO credit score, or even your Ticketmaster account—and brings it onchain. This ability to fetch tamper-proof information about users without sacrificing privacy unlocks new potential for DeFi, such as undercollateralized lending marketplaces like 3Jane on Base. Innovation within the DeFi ecosystem, like the introduction of zkTLS to applications, will be a focus for developers and dramatically increase the available use cases for onchain finance. Additionally, we believe the intersection of DeFi and AI will further optimize onchain yield strategies, substantially improving accessibility and driving attention back to DeFi.
The intersection of artificial intelligence and crypto will take center stage
Eon Capital has vocally held the belief that the digital asset ecosystem is the perfect business environment for building, investing in, and experimenting with artificial intelligence. Since inception, we highlighted AI and AI infrastructure as two key areas of blockchain growth. AI platforms have become a reality onchain with the emergence of ecosystem tokens like $virtual, $ai16z, and $griffain. These projects offer novel ways to launch tokenized AI agents for specific purposes, using unique tech stacks across different blockchains.
We believe that the digital asset ecosystem will capture a significant chunk of the value created by AI agents. While traditional money rails face long settlement times, blockchains are instant and permissionless, providing agents with direct access to the digital economy. This “plug-in” has opened a pandora’s box for experimentation onchain. For example, a wallet-wielding agent called Freysa AI was programmed to never approve a transfer of funds out, under any circumstances. Anyone could pay a fee per attempt to try and convince it otherwise, which accumulated in a prize pool for the victor. After one week and 482 attempts, Freysa was convinced via a logical loop to send its ETH prize pool to the winner.
Freysa is one of the earliest case studies of an agent’s autonomous management of digital assets and a unique test of LLM security. With the total market capitalization of all AI onchain tokens not surpassing $15 billion as of January 1st, 2025, we are in the early stages of the AI blockchain intersection. Eon Capital will continue to focus on this emerging sector.
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