Title: "Delphi's "The Year Ahead for Markets 2025": Key Insights"
Author: Stacy Muur
Compiled by: TechFlow
Executive Summary
As the year comes to an end, various research and forecasts are emerging. @Delphi_Digital recently released "The Year Ahead for Markets 2025", which delves into an analysis of the current market conditions and an outlook on future trends, covering a series of topics such as the price trajectory of Bit, major trends, and risk factors.
Given the length of the full text, which would require a significant amount of time to read, TechFlow has compiled an article by Stacy Muur that summarizes the core insights from Delphi Digital's "The Year Ahead for Markets 2025".
This article divides the Delphi Digital report into 3 main parts: the rise of Bit, the bursting of the Altcoin bubble, and future development trends. Currently, the market capitalization of Bit has reached around $2 trillion, while the performance of Altcoins has been lackluster. Looking ahead, the growth of stablecoins may bring hope for market recovery. At the end, Stacy Muur also expresses his unique views on the crypto market in 2025, believing that the crypto market is evolving from the "Wild West" to a more regulated alternative stock market. Web3 native users will be willing to take high risks and participate in speculative trading, while new entrants will adopt a more prudent risk management approach and focus on long-term value, and some narratives may be marginalized.
Main Content
The Rise of Bit
There was a time when a Bit price of $100,000 was considered a fantasy.
But now, this view has undergone a dramatic change. Bit's current market capitalization is around $2 trillion - impressive. If Bit were viewed as a publicly traded company, it would become the 6th most valuable company in the world.
Although Bit has attracted widespread attention, its growth potential is still enormous:
Bit's market cap is only 11% of the total market cap of the MAG7 (Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta, and Tesla).
It accounts for less than 3% of the total market value of the US stock market and about 1.5% of the global stock market.
Its market value is only 5% of the total US public debt and less than 0.7% of the total global (public + private) debt.
The total assets in US money market funds are three times the market value of Bit.
Bit's market value is only about 15% of the total global foreign exchange reserve assets. If global central banks were to allocate 5% of their gold reserves to Bit, this would bring over $150 billion in purchasing power to Bit - nearly triple the net inflows to IBIT this year.
The current global household net worth has reached a new high of over $160 trillion, $40 trillion higher than the pre-pandemic peak. This growth has been driven primarily by rising house prices and a booming stock market. In comparison, this figure is 80 times the current market value of Bit.
In a world where the Fed and other central banks are driving 5-7% annual currency depreciation, investors need to target 10-15% annual returns to offset future purchasing power losses.
You need to know:
If the currency depreciates 5% per year, its real value will halve in 14 years.
If the depreciation rate is 7%, this process will be shortened to 10 years.
This is why Bit and other high-growth sectors are attracting so much attention.
The Bursting of the Altcoin Bubble
Although Bit has set one new high after another this year, 2024 was not friendly to most Altcoins.
$ETH failed to break its all-time high.
$SOL set a new high, but the gain was only a few dollars more than the previous peak, which is negligible compared to its market cap and network activity growth.
$ARB had a strong start to the year, but its performance has declined as the year-end approaches.
There are many similar examples. Just look at the performance data of the 90% Altcoins in your portfolio.
Why is this happening?
First, Bit's dominance is a key factor. Bit has performed exceptionally well this year, driven by ETF inflows and Trump-related factors, with its price up over 130% year-to-date, reaching its highest dominance level in three years.
Secondly, there is a market bifurcation phenomenon.
Market bifurcation is a new feature of the crypto market this year. In previous cycles, asset prices typically moved in sync. When Bit went up 1%, ETH would usually go up 2%, and Altcoins would go up 3%, forming a predictable pattern. However, this cycle is quite different.
While a few assets have performed exceptionally well, more assets are in a state of loss. The rise of Bit has not led to a broad-based increase in the prices of other assets, and the much-anticipated "Altcoin season" has not materialized as expected.
Finally, MEME coins and AI Agents also played an important role.
The crypto market is always oscillating between "this is a Ponzi scheme" and "this technology will change the world". In 2024, the "scam" narrative has taken the lead.
In the collective imagination of the public, the crypto market is always swinging between "the unified global financial system of the future technology" and "the biggest scam in human history", and this happens every two years.
Why does this narrative seem to be able to alternate between the two extremes and occur every two years?
The Supercycle of MEME Coins and Market Sentiment
The supercycle of MEME coins has further reinforced the perception that the crypto market is a "Ponzi scheme". Many have begun to question whether the fundamentals of the crypto market are truly important, even viewing it as a "casino on Mars". These concerns are not without merit.
Against this backdrop, I would like to add a note.
When MEME is referred to as the best-performing asset of the year, people usually only focus on the "mainstream MEME" (such as DOGE, SHIB) that have already achieved significant market capitalization and successfully built a community. However, 95% of MEME coins quickly lose value after launch, a point that is often overlooked. But even so, people are still "willing to believe".
This belief has led many funds previously invested in Altcoins to shift towards MEME coins - a few people have profited, but most have not succeeded. As a result, capital inflows have mainly concentrated between Bit (institutional funds) and MEME coins (high-risk investments), while most Altcoins have been neglected.
Delphi believes that 2025 will be a year of technology-driven market transformation, with technologies that will "change the world".
But I am not so optimistic about this. In 2024, a large number of KOLs (key opinion leaders) focused on MEME coins emerged. When I tried to create a folder of "truly valuable" channels on Telegram (you can find it here), I found that almost all the channels were discussing "ape calls" (i.e., high-risk short-term investment recommendations). This is the essence of the attention economy, and these narratives have profoundly influenced market trends.
What are the upcoming trends?
Growth of Stablecoins and Credit Expansion
A major challenge facing the current market is the oversupply of tokens. Driven by private investment and public token launches, a large number of new assets have flooded the market. For example, on the Solana pump.fun platform alone, over 4 million tokens were launched in 2024. However, in contrast, the total market capitalization of the crypto market has only grown 3 times compared to the previous cycle, while it grew 18 times in 2017 and 10 times in 2020.
The two key factors missing from the market - growth of Stablecoins and credit expansion - are now re-emerging. With declining interest rates and an improved regulatory environment, speculative activity is expected to reactivate, helping to alleviate the current market imbalance. The core role of Stablecoins in trading and collateralization will play a crucial part in the market's recovery.
Inflow of Institutional Capital
Until last year, institutional investors remained cautious about crypto assets due to regulatory uncertainty. However, this situation is starting to change, with the SEC's reluctant approval of a spot BTC ETF, paving the way for future institutional capital inflows.
Institutional investors typically tend to gravitate towards familiar investment areas. While a minority of institutions may venture into Memecoins, they are more likely to focus on assets with stronger fundamental support, such as ETH/SOL, DeFi, or infrastructure.
Delphi predicts that the market may experience a "broad-based rebound" similar to past cycles over the next year. However, this time, the market will be more focused on fundamentally-driven projects. For example, OG DeFi projects with a proven track record may become a focus of attention; infrastructure assets (such as L1 protocols) may also regain their luster. Additionally, RWA (Real-World Assets) or emerging sectors (like AI and DePIN) may also become hot spots.
Of course, not all tokens will be able to achieve triple-digit gains like in the past, but the presence of Memes will be a part of the market. This may mark a new starting point, a widespread crypto rebound driven by an overall market upswing.
Note: Most institutional traders typically rely on options hedging strategies. Therefore, if a "broad-based rebound" occurs, the assets most likely to attract institutional interest will be those with options trading - currently primarily on Deribit and potentially the Aevo platform.
The Solana Argument
@Solana has demonstrated the remarkable resilience of the blockchain ecosystem. After experiencing a 96% market cap decline due to the FTX collapse, Solana saw a remarkable recovery in 2024.
Here are the key highlights of its performance:
Developer Momentum: Through hosting hackathons and airdrop distributions (such as the Jito airdrop), Solana has successfully re-ignited the interest of developers and users. This increased engagement not only drives innovation but also forms a virtuous cycle of technical development and user adoption.
Market Leadership: In the 2024 crypto market trends, Solana is at the forefront, spanning from Memes to AI applications. Notably, its Real Economic Value (REV, a composite metric of transaction fees and MEV) exceeds Ethereum by over 200%, demonstrating its robust market vitality.
Future Outlook: Solana is seen as a potential challenger to Ethereum's dominance in scalability and user experience. Compared to decentralized Layer-2 solutions, Solana offers a seamless user experience and a highly concentrated ecosystem, giving it a significant advantage in the competition.
Stacy's Final Thoughts
The current market conditions may evoke associations with 2017-2018, when Bitcoin reached its all-time high of $20,000 just before the new year, only to start declining in early 2018. However, I believe it is inappropriate to draw a direct comparison between the crypto market of 2018 and that of 2025. They exist in vastly different market environments - the once chaotic "Wild West" is rapidly evolving into a more regulated alternative stock market.
We need to recognize that the scope of the crypto market extends far beyond the discussions on Crypto Twitter (CT) and X platforms. For those not actively engaged on these platforms, their understanding and perception of the market may be entirely different.
Looking ahead to 2025, I believe the crypto market will bifurcate into two main directions:
Web3 Native Users: This group is deeply immersed in the crypto market, familiar with its unique workings, and willing to take on high-risk, speculative trades in Memes, AI agents, and pre-sale projects - reminiscent of the "Wild West" era of the crypto market's early days.
Mainstream Investors: Including institutional and retail investors, they typically adopt a more conservative risk management approach and lean towards fundamentally-based investment strategies. They view the crypto market as an alternative to the traditional stock market, focusing on long-term value rather than short-term speculation.
So, which areas might become marginalized? Early DeFi projects, RWA (Real-World Assets), and DePIN (Decentralized Physical IoT) protocols that fail to establish a leading position in their respective domains or within the blockchain ecosystem are likely to gradually lose market attention. This is just my perspective.
PS: This article summarizes the core insights from @Delphi_Digital's 2025 Market Outlook. If you want a comprehensive understanding of Delphi's detailed predictions for 2025 and beyond, I strongly recommend reading their original research report.
