USA, AI and developers: what does 2025 have in store for Web3?
Our predictions for this year and our review of last year’s forecasts
GM,
Ladies, gentlemen, boys and girls, it is that time of year once again as we cast our eyes into the future and make sense of what might happen to Web3 in 2025.
Best,
What’s going on?
Our predictions last year have aged fairly well—read on for our review—but let’s get to this year’s first and foremost.
Terminal 3
SO WHAT?
1. USA
America is hardly synonymous with Web3. Key projects including Bitcoin and Ethereum were created outside of Silicon Valley and it took a number of years before cryptocurrencies became a concept that was broadly accepted in America’s tech hotbed. And yet the US is going to be a major factor in what happens to Web3 this year.
That’s down to one thing: President-elect Donald Trump.
It does seem ridiculous that one event can be potentially so pivotal, and an event that features a man who is best-known for making populist statements that don’t always result in action. But here we are.
The Trump Presidency has already breathed fresh life into cryptocurrency markets. His comments during his successful election campaign sparked markets into life with Bitcoin rallying to over $100,000 through pledges that included:
- Creating a Bitcoin strategic reserve
- Supporting Bitcoin mining in the US
- Easing regulatory pressure on the Web3 industry
- Establishing a Bitcoin and crypto advisory council
- Preventing a US-based CBDC
- Removing SEC chairman Gary Gensler, who resigned in the wake of Trump’s electoral victory
- Freeing Ross Ulbricht, the Silk Road founder who was jailed for 40 years in 2015
The general gist is that Trump wants the US to embrace the Web3 industry, whereas previous administrations have shackled it with caution fed by disaster stories that include the implosion of FTX and Terra/Luna, exchanges like Binance evading securities and more.
A pivotal piece of that is going to be legislation. If America is truly to become the world’s hub for Web3, as Trump has said, it will not need to clarify securities laws for staking, trading and more but it will have to find ways to deal with newer services. We’ve seen Pump.fun and Polymarkets explode in popularity and revenue over the last year, and there will be others that challenge regulations and laws.
Trump has already assembled the crypto advisory council, which will reportedly include approximately 24 CEOs and founders from the Web3 industry. His approach to handling the impending ban on TikTok in the US, which is slated to come into effect on 19 January, will give clues as to how the Trump administration will approach tech policy. There’s widespread confusion over whether the ban will be extended, dismissed or if TikTok could be sold to a suitor, one of which is rumored to be Trump advisor Elon Musk.
If America can even pull off some of the goals Trump has spoken of, it will mark progress for Web3 and it may prompt other nations to adopt similar policies. It’s just a sad indictment that crypto is reliant on a pragmatic politician, rather than able to use the undoubted power of concepts like decentralization, DeFi and others to break ground for itself.
2. Artificial intelligence
Artificial intelligence (AI) has been a major theme in tech for the last two years since OpenAI released ChatGPT, but it only made its way into Web3 in the second half of last year. That means there’s huge room for growth over the next twelve months as the technology matures, new services and use cases are explored and more developers flock to adopt the tools.
AI in Web3 to date has been agents, which are most visible on X and other social services. Whilst these can be impressive in their authenticity, they are far from gamechangers for now. Beyond sending tweets, some agents are able to trade cryptocurrencies and maintain a wallet.
On the fundamental side, a number of projects have emerged with frameworks to develop agents, including ElizaOS, Virtuals and Swarms. This year will likely see their capabilities extend into playing games, speaking in online calls, and more. One long-term goal from the creators of ElizaOS is to develop a hedge fund staffed with AI traders which can outperform top firms and venture capital funds. That seems some way away, although the basics are in place and AI agents can trade.
There are also looming automation possibilities, which may not be as sexy as robot traders but they could be crucial given the difficulty of Web3 user design, user experience and concepts. Even experienced tech followers find Web3 wallets and transaction systems complicated or new.
In September, Coinbase claimed to have carried out the first transaction between two AI agents. That innovation could allow users who are not crypto savvy to interact and make transactions indirectly via AI agents.
Another big push around AI and Web3 is using blockchain technology as a transparency and authenticity layer for AI agents. That’s to say that AI agents would be granted verifiable credentials and their processes and actions would be logged on a blockchain to provide verification of actions that were taken, or to perhaps prove authenticity.
Much of the hype around AI agents is years away if possible at all, but AI and crypto have become early bedfellows because of the lack of friction in trading in Web3.
“AI agents cannot get bank accounts, but they can get crypto wallets. They can now use USDC on Base to transact with humans, merchants, or other AIs. Those transactions are instant, global, and free,” Coinbase CEO Brian Armstrong said at the time of his company’s AI breakthrough.
3. Developers, developers, developers
To use the famous Steve Ballmer meme in our title, this is the year when Web3 could attract developers from outside its field in a meaningful way.
The industry is always looking for mainstream adoption but one of the biggest issues that has held that back has been the types of services that are available to users. As mentioned above, they can be difficult to understand for those who are new to the industry. The same applies to developers, however, with even social media alternatives requiring elements like wallets, private keys and other concepts that can put prospective new users off.
There’s been progress but Web3 needs to find user frameworks and services that are not only useful to the average internet users but don’t require years of Web3 experience to sign up and use them. We’ve seen with Farcaster, the Web3 social media service, that there has been innovation but it is still tough for the average social media user to meaningfully become involved.
In many ways, 2024 could be a perfect storm for attracting non-crypto developers to using elements of Web3. Greater clarity on regulations in the US combined with sophisticated tools and frameworks for AI could enable devs who had shied away from crypto to build services that don’t just pay lip service to Web3 but can actually provide value for the average internet user.
The Web3 industry must accept that it is not ready for mainstream adoption in its current iteration. We’re excited to see products that are in development or not even conceived yet to come to the fore.
What might these products do? That’s a tough call but we are looking for innovation around payments, identification, social media and investment products.
How did we do with our 2024 predictions?
Predictions mean nothing if they’re not revisited. These were ours 12 months ago:
The first US Bitcoin ETFs arrive and make an impact
It’s impossible to know what sends a market higher, but ETFs injected momentum to take the price of Bitcoin to $100,000. Bitcoin was the best performing investment asset of the year—it grew 125%, well ahead of the S&P 500 which clocked a still respectable 23%.
Stablecoins win true appreciation—and profit
This prediction played out with stablecoin adoption soaring and profits rocketing. Tether, which operates the largest Web3 stablecoin (USDT), claimed it clocked over $10 billion in net profit for the year. Circle, which runs USDC, is looking to go public this year which will arm us with plenty of insight.
3. Real World Assets show signs of taking off
While there hasn’t appeared to be any crazy visible movement on RWA tokenization, it has happened. At the time of our prediction there were over $860 million tokenized in US treasuries, today that figure stands at $3.75 billion—an increase of over 400%. That figure is sure to increase this year at an even faster pace.
That’s all for this week!
Share your feedback, questions or requests via email to: sowhat@terminal3.io
