On January 1, 2024, we published an article and believed that 2024 would be an important turning point, and the Altcoin market might usher in a new round of huge growth cycle. As shown in the figure below.
In that article, we also listed some narratives that might become the hotspots of 2024, including RWA, AI, GameFi, DePin, DeFi, Layer1, etc. Looking back, some of the narratives mentioned in the article have indeed performed well overall in the past year, but some narratives have not reached our initial growth expectations.
In fact, in the past few years, I have customized a major theme for Talks Outside every year, such as:
The major theme of 2022 was "Breaking Through", which was not only the year of the official birth of the self-media IP of Talks Outside, but also the beginning of our new cycle of regular investment in BTC.
The major theme of 2023 was "Advancement", and the article output that year was mainly focused on popularizing Blockchain knowledge and listing potential projects during the bear market, so the corresponding e-book was named "Blockchain Thinking Advancement".
The major theme of 2024 was "Methodology", and the article output last year was mainly focused on sorting out some experience, ideas, methods, strategies, and psychological construction, so the corresponding e-book was named "Blockchain Methodology".
It's already 2025 now, and this year I plan to give Talks Outside the major theme of "Era", which means that the Altcoin field may usher in or begin to enter a new era, and we will all become participants and witnesses.
But for most partners, what they may be more concerned about is where the key points of the Altcoin market are this year?
1. Regarding the Altcoin season
In last year's article, we mentioned the topic of Altcoin season many times, and for partners who are fully or heavily invested in Altcoins, one of the questions they may be most concerned about is: Will there still be an Altcoin season opportunity in 2025?
Generally speaking, when BTC.D begins to show a clear downward trend, Altcoins will usually experience a rotational upward trend. At least in the past cycles, this rule and pattern have been effective, because as Bitcoin rises and stabilizes, liquidity often shifts to Altcoins to chase higher returns.
For example, in the 2021 bull market, when BTC.D's dominance dropped from around 73% to around 40% (the first stage was from January 2021 to May 2021), it directly triggered a large-scale Altcoin season, with coins like SOL, DOGE, and ADA experiencing exponential growth, and the TOTAL3 market cap growing from $2.1 trillion to around $9.8 trillion. As shown in the figure below.
Although the market was disrupted by the 519 incident at that time, overall, many Altcoins performed well in terms of price, and after the market recovered in July, TOTAL3 continued to grow until November when it entered the bear market.
In the week of November 18, 2024, BTC.D reached its highest point since April 2021 at 61.53%, and then began to decline, and some Altcoins also began to experience periodic upward trends, such as AAVE, which saw good gains during this period. During the same period, TOTAL3 also successfully broke through the 2021 ATH and reached $11.3 trillion. As shown in the figure below.
But just as most people were immersed in the hot (Ta) and enthusiastic (Kong) atmosphere of the Altcoin season finally arriving, the Fed's policy meeting on December 19 seemed to directly bring down the market, and the market then entered a clear correction phase. Currently, BTC.D is maintained at around 58%, which seems to be a relatively psychological resistance area in the short term. Let's wait and see, if it can continue to decline to around 40% in the future, then we still have the opportunity to see the Altcoin season in the first or second quarter of this year.
However, regarding the Altcoin season, it is still the same as what we said in our previous article: A large number of new projects have been born in this cycle, and the problem of high FDV and low circulation of many projects has not been fundamentally solved so far, and the current market liquidity will still face insufficient problems. Therefore, even if we usher in the Altcoin season again this year, it does not mean that all Altcoins will have the opportunity to rise or break through their previous highs.
2. Regarding the narratives
If you are currently unable to grasp the rhythm of the Altcoin season in advance, and do not have the time and energy to conduct investigations and research, the simplest way to participate is to gradually buy core assets like ETH, although the returns may not be as large as imagined, at least you can buy with peace of mind.
And if you want to have a greater chance of gains during the Altcoin season, while also being able to bear greater risks, then what key narratives should you focus on?
Although everyone's understanding and focus may be different, let's make a simple list here (the following is only a partial list, and the order is not in order of priority):
- AI
Although the AI craze has experienced several rounds from 2022 to the present, the heat of AI does not seem to be abating, and it has even spawned new narratives such as AI Memes and AI Agents.
Especially in recent days, the heat of AI Agents seems to be relatively high, and I found that many partners in the group are also discussing this topic. As shown in the figure below.
- Memecoins
The various rags-to-riches stories in each bull market are basically inseparable from the topic of Memecoins. As of now, I've checked the on-chain data, and the number of Memecoins with liquidity pool trading has exceeded 10.97 million. As shown in the figure below.
Although the Memecoin field as a whole seems chaotic, with extremely large price fluctuations, and the vast majority of Memecoins are most likely to eventually go to zero, retail investors seem more willing to participate in them. It can be foreseen that if there is still an opportunity to see the Altcoin season this year, Memecoins will undoubtedly be at the forefront and a new round of wealth creation movement will appear.
And if you can't grasp the fast pace here, but don't want to miss out on Memecoins, it is recommended to focus on projects with a strong community or viral marketing capabilities as much as possible.
- RWA
The current RWA is mainly focused on tokenizing traditional financial products such as real estate, government bonds, and commodities, in order to introduce traditional finance into the Altcoin market, and some projects have also received the support and favor of large institutions like BlackRock.
Although many retail investors are still not optimistic about the RWA field, if we take a longer-term view, as regulations and other aspects are promoted, RWA will definitely usher in further development in the future and have the opportunity to become a new way for some enterprises to be capitalized.
As of the time of writing this article, the market size of RWA is $15 billion, but compared to the global traditional asset scale (over $300 trillion), this figure is still in the initial stage. As shown in the figure below.
- DeFi 3.0
The development of DeFi seems to be entering a relatively critical turning point. With the advancement of institutional RWA and the deep integration of AI and blockchain technology, the integration of DeFi and TradFi may become one of the core trends this year.
Moreover, with the official inauguration of Trump this year, if the regulation on DeFi can be further relaxed, it will certainly create a more friendly development environment for this field.
At the same time, since the spot ETFs of BTC and ETH were approved last year, major institutions have also been continuously entering the deep water of the crypto market. In the future, as more and more traditional investors begin to accept DeFi tools and this new investment concept, it is likely to attract more traditional capital inflows, which will further accelerate the development of the DeFi field and drive a new round of explosive growth in the related ecosystem.
As for whether DeFi will become a supplementary role to the traditional financial structure in the future, or will usher in a new wave of decentralization revolution, we cannot predict, we can only wait and see.
Of course, in addition to the few main narratives we listed above, some of the paradigm narratives that emerged last year are also worth continuing to pay attention to, such as Telegram bots and Gaming (including platforms like Polymarket). Whether you focus on the leading projects or the low-cap potential projects, it depends on your time and risk preference.
In the past 2024, we have experienced many key events, such as the another BTC halving (April 20, 2024), the breakthrough of BTC to $100,000 (December 5, 2024), the official approval of BTC ETF (January 11, 2024) and ETH ETF (July 23, 2024), the observation of CZ's lunch journey, the airdrop fever of well-known projects, the super cycle of the AI narrative, the viral spread cycle of MemeCoin, the highlight moment of Trump in crypto, and the new round of rate cuts by the Fed...
Although we have done a lot of homework in 2024, for 2025, opportunities and risks still coexist. Whether it is the issue of Altcoin season that everyone is concerned about, or the issue of which narratives may become the hot topics this year, if you want to continue to participate in the market, you must do a good job in position management and think clearly before any specific operation:
- Why do you want to buy it?
- What proportion of your position will you invest in it?
- What is the maximum loss you can bear on it?
- What is your profit-taking and stop-loss plan?
- How long do you plan to hold it?
After discussing the key issues that everyone may be concerned about, let's also make a phased summary.
In fact, in an article last year (November 4, 2024), we mentioned two focuses for this year: one is on the narrative aspect, and the other is on the trading aspect. As shown in the figure below.
In terms of trading, for ourselves, 2025 will be a year to execute the exit plan. We will continue to maintain focus and patience, and strictly abide by our trading discipline. Below, I will make a simple summary of our position situation during the 2022-2024 period from 4 aspects.
First, in terms of overall position management:
...The rest of the content will continue to be updated through the narrative.
