The favorable policies of the Trump administration, the increased inflow of funds into exchange-traded funds (ETFs), and the progress of stablecoin technology have the potential to drive Bitcoin to new highs (ATH).
VX: TTZS6308
The pro-crypto approach of the U.S. Securities and Exchange Commission (SEC) officials appointed by Trump is creating a more favorable environment for digital assets. This year, Bitcoin reached a new all-time high, buoyed by the approval of a U.S. spot ETF and Trump's election victory, although some assets have outperformed Bitcoin.
Both Bitcoin and Ethereum are expected to see significant developments by 2025, driven by factors such as the anticipated approval of U.S. cryptocurrency ETFs and the potential establishment of a Bitcoin strategic reserve.
What other risks are there in the market?
Cyclical Top Risk
Predictions about the cycle top need to be constantly self-corrected. While I don't believe we are near the cycle top, we must continuously re-evaluate. The cycle top may not be a single "event" but more of a spectrum that gradually approaches over time.
SBR Realization Risk
With Trump's inauguration, everyone will be watching his actions. Although Bitcoin is expected to see regulatory tailwinds, if the President completely forgets about it, that would be a rather bearish event. Risks I see include: SBR being forgotten; or more likely, SBR not happening, but progressing in some other way.
For the latter case (an alternative SBR plan), this could be an initially bearish but ultimately bullish event, as long as the plan itself supports Bitcoin.
In summary: the appearance of bullish signals means the bull market continues; the appearance of bearish signals means the plan must be re-evaluated - the bull market may continue, but the odds will be lower.
Supply Risk
In the summer of 2024, we witnessed crazy macroeconomic conditions, with the stock market reaching new highs, but the cryptocurrency market saw more declines than gains, due to the persistent selling pressure from large suppliers such as MtGox, the German government, and Grayscale GBTC.
Supply risk can never be eliminated. There will always be entities holding large amounts of Bitcoin - the British government, the Dark Web's Silk Road, FTX holdings, or any other entity. This is something you must keep an eye on, but in my view, if all goes well, these events will be good buying opportunities on dips.
Macro Risk
I believe that smaller rate cuts are still rate cuts. While this may not be "as bullish," the fact is that as long as rates continue to decline, liquidity will improve.
Again, the appearance of bullish signals means the bull market will continue. Unless there are rate hikes or no rate cuts, the macroeconomic environment should be favorable for digital assets.
Which coins can be invested in for the future market?
The "buy and hold forever" era is long gone. Although Solana surged 10-fold in 2023, its overall performance in 2024 was nearly on par with Bitcoin; so-called blue-chip projects like TAO did not benefit from the recent AI hype we've seen; and for meme tokens, the dogs are no longer wearing hats (WIF), the Chill guy is no longer chill, and the Hippo (MOODENG) seems to be on its last legs...
Nothing on this list is likely to let you "buy and hold."
Apart from that, I also like to ponder a question - who are the marginal buyers? In this market, there are basically 3 main marginal buyers - institutions (traditional finance players), funds (liquid funds/crypto-native funds), and speculators (contract traders, on-chain players, etc.).
A good narrative must be bought by at least one of these parties. Let's dive right in.
AI
Yes, AI will still be a hot topic. I believe the next wave is about to arrive.
Macro level: Hype > Fundamentals > Utility;
Micro level: Reply guy > Infrastructure > Applications/Avatars.
Buy and hold will not yield good results. GOAT is the start of all this, but it has fallen 60% from its highs and may continue to underperform.
Top picks: AI-centric on applications, Swarms, gaming, and consumer-focused.
Entities like ALCH (game development), Griffain (helping control wallets), Digimon, and ai16z (the king of all AI) are top picks in my view, and there may be many more I've missed.
DeFi
This also goes without saying. DeFi will continue to be a great narrative, but investing in DeFi is very difficult, as very few tokens actually benefit from it. Even if they do benefit, they may not appreciate (look at the LST race).
To be honest, this would not be my top choice in terms of risk-reward, but I believe this will be a growing narrative through 2025.
Top picks: AAVE / ENA / Morpho / Euler / USUAL;
Secondary picks: Stablecoin/payment-related tokens.
Layer1
I may get a lot of hate for this, but I believe the trading opportunities in Layer1 are back. HYPE has undoubtedly performed excellently, but SUI was actually disregarded by many when it was around $1, and it has now risen to $4. I think the market has been consistently missing Layer1 trades - it's one of the areas that no one is paying attention to, but it holds tremendous opportunities (as evidenced by HYPE's 10x gain).
Top picks: SUI/HYPE;
Secondary pick: Abstract.
Other Narratives
Data tokens: Kaito / Arkm;
Meme tokens: I only like PEPE, the others... seem outdated;
DePIN: PEAQ / HNT;
Ordinals;
Old Altcoins: XRP;
Old DeFi: CRV / CVX.
The above roughly summarizes my expectations for 2025. The best advice and insight is actually to "stay flexible and enjoy the journey." The market will continue to change, but this is just part of the game of life.
No one can execute the same trade twice. Because the trades are different, the people are different.
Wishing you all the best, and we'll see you on the other side. If you make life-changing profits in the process, remember to use them to change your life.
