The New Era of DeFi Will Unfold!
There is a saying: “A day in the crypto world is like ten years in the human world,” which describes the rapid changes in the crypto market. This applies not only to coin prices but also to the advancement of the industry.
In the past year, we have witnessed significant events such as the gradual establishment of global cryptocurrency regulations, the launch of Bitcoin spot ETFs, Donald Trump’s return to the White House with a more friendly approach towards cryptocurrencies, and Bitcoin (BTC) breaking the $100,000 mark, all of which indicate a tightening relationship between cryptocurrencies and global finance.
As we officially enter the Year of the Snake, I believe that decentralized finance (DeFi) will be an area worth watching in 2025, especially as people become increasingly aware of their “financial autonomy.” At the offline gathering organized by XREX and WEB3+, we discussed this topic, and Winston also expressed that “centralization” and “decentralization” will be completely different tracks; as centralization matures, it will catalyze the development of decentralization.
**2025 Keywords: The New Era of DeFi Unfolds**
Wayne Huang: “Financial Autonomy” Will Become Increasingly Important
One of the greatest values of blockchain technology is its decentralization, which provides people with a level of “financial autonomy” that they have never had before, allowing individuals to choose how to store their assets. “Self-custody” frees individuals from the constraints of traditional financial intermediaries.
In this regulatory era, many issues in the cryptocurrency industry have been addressed. However, as countries and regulatory bodies exert more control over the industry, potentially turning it into a licensed industry, it also means that flexibility is decreasing.
Bitcoin has been in existence for 16 years, but the ideal of “financial autonomy” is still a distance away from complete realization. Technology is one barrier, and education is another important issue. Yet, many real-world issues, such as wars, compel us to think about how to safeguard our financial autonomy.
In the new year, I recommend that everyone pay more attention to knowledge and dynamics related to the DeFi sector, which is also a topic I will spend more time contemplating this year.
Winston Hsiao: The Decentralized Era Begins a New Chapter
As the world enters a major regulatory era, 2025 will serve as an important watershed between “centralization” and “decentralization.”
Take exchanges as an example: in the past, when there was no regulation, all resources concentrated on developing “centralized exchanges” due to the potential for greater commercial benefits, resulting in improved user experience and protection of user rights. Conversely, the DeFi sector has seen insufficient investment over the past decade, leading to a lack of adequate and functional “decentralized exchanges,” creating an imbalance in development.
As regulations gradually improve, “centralization” and “decentralization” will be completely separated. In Taiwan, for instance, the virtual currency industry (VASP) will adopt a “registration system” and gradually transition to a special law and licensing system, which will inevitably restrict the number of approved operators.
This means that the new era of DeFi will officially begin, and the market will require more “decentralized power” to provide another important option for people, exerting influence in the market mechanism and promoting a more balanced development direction.
I believe that the pain points of imbalance between centralization and decentralization will gradually emerge in the coming years. In the new year, I would suggest that startup teams pay more attention to developments in the DeFi sector.
**Reviewing the Four Major Blockchain Financial Trends of 2025**
Wayne Huang
**Trend 1: Bitcoin Spot ETF Approval Opens a New Financial Era**
BlackRock, the world’s largest asset management company, is set to launch a Bitcoin spot ETF in early 2024, signifying that Bitcoin is officially recognized as a new asset class.
An ETF (Exchange Traded Fund) serves as a bridge to lower investment barriers; it is a fund that tracks major market indices or bond market indices, allowing trading through familiar brokerage platforms as one would with stocks. The Bitcoin spot ETF will track the price of Bitcoin.
I previously thought that it would take a considerable amount of time for virtual assets to be commoditized in traditional finance. However, the emergence of the Bitcoin spot ETF lays an important foundation for virtual assets to be regulated and processed by traditional financial systems, providing more confidence for the development of derivative financial products, such as the trading of Bitcoin spot ETFs.
With the Bitcoin spot ETF taking the lead, this implies that in the future, if there is a desire to tokenize traditional financial assets like US Treasury bonds and funds for trading on the blockchain, the obstacles will be significantly reduced.
Imagine being able to trade from anywhere in the world with just a wallet, achieving instant on-chain settlement, thus opening up more possibilities on top of the existing financial products’ rules and trading experiences.
**Trend 2: Trump’s Election as the 47th President of the United States Begins a Crypto-Friendly New Era**
Trump’s return to the White House showcases a friendly attitude towards cryptocurrencies during his campaign, proposing several policies that could significantly impact the global cryptocurrency industry.
The United States is an immensely influential country, and its stance on any issue can greatly influence the attitudes of other nations. If the US were to oppose cryptocurrencies or criticize them severely, many countries would likely become more conservative or even fearful. Therefore, a major power like the US exhibiting a friendly attitude towards cryptocurrencies is beneficial for the overall atmosphere and room for development.
Regardless of how many of Trump’s proposed crypto policies ultimately come to fruition, as long as there is no intentional suppression, even if the US does not prioritize cryptocurrency policies, other countries can develop their own crypto policies freely without conflicting with the US’s stance.
Winston Hsiao
**Trend 3: Regulatory Framework Takes Shape, An Orderly Market is Forming**
Taiwan’s virtual currency industry is shaping its regulatory framework, and we expect to see a special law implemented this year. The cryptocurrency market has moved past the wild west era of unregulated growth; an orderly market is projected to take shape by 2025.
Furthermore, the “fairness” and “transparency” of cryptocurrency market information will be a promising direction for future development.
For instance, if the price of Bitcoin rises by 20%, historical data suggests that several altcoins may also experience a proportional rise. If this historical objective data could be systematically organized and presented on a public and trusted platform without any bias, it could trigger traders to begin trading whenever similar price increases occur, thereby creating market liquidity.
This data is somewhat akin to the regular financial disclosures that publicly listed companies provide. Only when every piece of market information can be accurately reflected in the market and prices will the overall operational efficiency improve, creating a better investment environment, ultimately reducing price discrepancies and volatility, leading the cryptocurrency market towards maturity.
Wayne Huang
Traditional finance has undergone several centuries of evolution, developing relatively complete risk management mechanisms and regulatory norms. For example, listed companies are currently subject to the Securities Exchange Act, which prohibits insider trading, meaning key executives within an organization who could influence market prices are restricted in trading securities to prevent market manipulation. Moreover, their statements and actions must comply with requirements to avoid causing market panic or wild fluctuations.
Currently, in the cryptocurrency market, many individuals exploit information asymmetries to influence or even manipulate market prices. This situation is relatively difficult to avoid and relies on investors’ self-identification and judgment. However, with the recent approval of Bitcoin and Ethereum spot ETFs, trading virtual assets through traditional financial mechanisms has, to some extent, addressed some issues related to information asymmetry.
**Trend 4: Traders Will Welcome New Dividends; Investors Will Find Layout Opportunities**
With the formation of an orderly market, traders will experience new dividends, while investors will find opportunities for long-term investments.
The cryptocurrency market exhibits higher volatility than the Taiwan stock market and allows for 24/7 trading, without any issues related to default settlement. All the pain points faced by day traders in traditional markets do not exist in the cryptocurrency market.
Thus, I believe that in the early stages of an orderly market formation, traditional market traders will be attracted to seek opportunities. “Traders” are those who engage in trading whenever opportunities arise, profiting from short-term price fluctuations through frequent buying and selling. Traders can apply their trading knowledge accumulated in traditional financial markets to benefit from price volatility, further enhancing liquidity in the cryptocurrency market, making the entire market more efficient.
For investors, they can begin positioning themselves for long-term investments in virtual assets in the early stages of an orderly market formation. Investors are those who believe in the long-term value and development potential of a specific asset or company and support project development through long-term holding.
This is akin to investing in NVIDIA and TSMC stocks before the AI wave exploded; these investors can start positioning themselves in potential cryptocurrencies, reaping dividends belonging to their era.
A complete and efficient trading market must have both investors and pure traders coexisting to create together. Whether traders or investors, both can obtain their respective dividends and opportunities in a market environment that increases fairness, transparency, and openness, which will lead to a more mature future for virtual assets.