Trump 2nd Term, Expectations for Pro-Crypto Policies Rising

With the inauguration of U.S. President-elect Donald Trump just a week away, the virtual asset (cryptocurrency) market is showing short-term weakness. However, long-term optimism persists due to expectations that the U.S. will pursue pro-crypto policies. Experts believe that fields such as DeFAI (DeFi+AI, AI DeFi investment), Bitcoin DeFi, DePIN, and DeSci are likely to grow this year.

The leading altcoin Ethereum (ETH) is trading at $3,163, down 2.18% from the previous day on the Binance USDT market as of 18:40 on the 13th (477,600 KRW on Upbit). Many altcoins have seen double-digit declines over the past week, giving back much of this year's gains.

At the same time, Bitcoin (BTC) dominance (the proportion of Bitcoin's market cap in the total virtual asset market cap) is rising at 58.41%, up from 56.78% on the 5th. The rise in dominance as Bitcoin's price falls suggests that the altcoin market may soon show weakness.

"Bitcoin Surged 120% Last Year, Attracting Funds…Bitcoin DeFi Also Expected to Grow Rapidly"

The amount of Bitcoin deposited in Layer 2 networks continues to increase. / Image=Bitcoin Layers

First, there is an analysis that the possibility of significant growth in Bitcoin-based decentralized finance (DeFi) projects has increased following Bitcoin's sharp rise. Recently, Forbes Digital Assets predicted that "Bitcoin DeFi will be a major growth driver in the cryptocurrency market by 2025."

In particular, the Bitcoin restaking platform Babylon Labs is gaining popularity by raising about 57,000 BTC. Several projects, including Babylon Labs, are set to issue tokens (TGE) within the first quarter, drawing more attention. Additionally, the total value locked (TVL) in Bitcoin DeFi, including Fractal Bitcoin (FB), BitLayer (BTR), BuildOnBitcoin (BOB), and Mezo (MEZO), is also growing significantly.

Web3 consulting firm Dispred stated, "In the Bitcoin ecosystem, restaking projects like Babylon, Lombard, Solv (SOLV), Pstake (PSTAKE), and Bedrock are gaining popularity," adding, "In the long term, as service accessibility improves, the Runes and Ordinals (ORDI) ecosystems will regain attention."

Meanwhile, restaking refers to the investment method of staking Bitcoin that has already been staked. Runes is a platform that helps users issue their own tokens (BRC-20) on the Bitcoin blockchain. Ordinals assists in issuing non-fungible tokens (NFTs) on the Bitcoin blockchain.

"Complex DeFi, Now AI Generates Profits…DeFAI on the Rise"

Recently, DeFAI (DeFi+AI, AI DeFi investment) projects that utilize 'AI agents' for DeFi investment are on the rise. 'AI agent' refers to an artificial intelligence (AI) system that performs various tasks independently without human intervention. AI agents assist in managing investors' DeFi portfolios, staking, and liquidity. For example, if a user commands 'Invest a total of $500 in the liquidity pool offering the best current interest rate,' the AI agent executes it.

Representative DeFAI Projects / Image=IOSG Ventures

Representative DeFAI-related projects include ai16z (AI16Z), Velvet Unicorn (VU), and the representative AI agent of Virtual Protocol (VIRTUAL), aixbt (AIXBT). Cryptocurrency analyst Hitesh stated, "DeFAI's market cap is currently below $1 billion but is expected to grow to $10 billion in the coming months."

"DePIN Reducing Infrastructure Costs, Expected to Grow 100-1000 Times Over the Next Decade"

Decentralized physical infrastructure projects (DePIN) are also expected to show steep growth. DePIN is evaluated as being able to significantly reduce various infrastructure costs using Web3 technology.

Classification of Major DePIN Projects / Image=Messari Report

Cryptocurrency analysis firm Messari recently reported, "The final market size of DePIN is expected to approach $1 trillion, but it currently occupies less than 0.1% of the future market value," adding, "DePIN is just beginning, with the potential to grow 100 to 1000 times over the next decade." According to the report, there were over 350 projects in the DePIN market as of last year, with a market cap of about $50 billion.

Messari analyzed that Helium (HNT), Dawn Protocol (DAWN), Filecoin (FIL), Ionet (IO), Daylight (GRID), Glow (GLOW), Worldcoin (WLD), and Animal (ANML) are leading De