In the final push to the end of the year, Bitcoin is rushing at full speed to hit its next milestone, $100K. The market is now in full bullish spirit, despite the overhanging uncertainties that pertain to inflation and rate-cut decisions. Global investors are eyeing the next wave of adoption from both retail and institutional sides. The new year bodes well for significant growth in DeFi financial services, and crypto’s ever-close tie with AI ignites innovations that pave the way for a more resilient ecosystem.

The past year was largely driven by the buzz around Bitcoin-related applications, Layer 2’s, and memecoin trading frenzy. While the launch of Bitcoin ETFs opened a compliant channel for institutional investors around the world, most crypto projects were in the BUIDL mindset and hoped for a bull run to arrive by the end of the year. Now the bull is here.

DeFi Setting the Stage

While memecoins and AI tokens continue to take the spotlight, DeFi seems to have finally matured past speculative investment and farming schemes, along with the collapse of points programs that were popular earlier this year. DeFi has become more institutional friendly as recent developments related to on-chain payments, wallets, and trading reflect a focus on advancing the technology behind these protocols.

All-in-one DeFi dApps grew in popularity this year as they offered a more convenient experience to users through account abstraction, multichain availability, and suite platforms that focus on more than just one product, such as lending or trading. Users have praised the growing use of device-based authentication Passkeys that have been used on these platforms to enhance security more conveniently.

Likewise, lending protocols have launched curated vaults where reputable investment firms enable more secure borrowing and lending opportunities to retail and institutional traders. This has been a large step forward from the previous generation of lending protocols, where funds were deposited into a single pool and were at high risk of both smart contract and economic exploits.

Crypto & AI

The industry is also seeing the impact of AI in crypto projects, such as Virtuals Protocol and Based Agent. Some of these projects connect to X (formerly known as Twitter) to interact with other users or even pitch for VC investment, as was the case with Truth Terminal. Other projects enable users to create AI agents that can trade with funds on-chain, launching autonomous hedge funds and shares through token launches. This year also saw the rise of crypto prediction markets, primarily Polymarket, where users heavily bet on the outcome of the US presidential election. We’ve even seen recent attempts to integrate AI agents with crypto prediction markets, allowing AI to place bets on future events.

Looking ahead to next year, the election victory of President Trump could signal a broader shift of regulation over the crypto industry and will have a far-reaching impact on US and global markets. The current pick for the commerce secretary and treasury secretary is an encouraging sign for the crypto industry, as both figures have extensive experience in working with crypto business and technology. Besides, the buzz around the launch of the Solana ETF could bolster the DeFi space with a new wave of dApp development and further catapult mainstream adoption. Exciting times ahead.

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