Author | Ben Fairbank
Produced by | Bai Hua Blockchain
The crypto market is like a drunken man, stumbling into 2025 after the bull market at the end of 2024. This bull market is both familiar and fundamentally foreign.
The headline news of Bitcoin breaking $100,000 at the end of 2024, the manic surge of Memecoins like slot machines, and Donald Trump's support for crypto ignited a spectacle akin to Beeple's artwork - captivating yet unsettling.
However, beneath the hype, this cycle is a chaotic mix of leveraged frenzy, institutional restraint, and macroeconomic gambles that could propel the market to new heights or derail it. This is not the FOMO-fueled retail frenzy of 2021, but a different beast, as the data confirms.
01. Leverage Trading: From Tool to Casino Drug, Memecoin Whales are the Winners
Leverage trading is not new, but the scale is staggering.
In the 2021 bull market, leverage was a side dish, but now it's the main course, laced with Memecoin mania. Platforms like Binance and Bybit report a surge in leverage trading, with Binance's Q4 2024 perpetual futures volume reaching $1.2 trillion, a 60% increase from the 2021 peak.
Memecoins, the fallen darlings of crypto casinos, are the spark, more incendiary than the tinder that ignited the LA wildfires. A 2025 Security.org survey found that 68% of Memecoin traders admitted to losses since entering, yet they continue to double down with 50x, 100x leverage, like dog-avatar influencers hoping to hit the jackpot. Why? Because Dogecoin reached $0.73 (over $100 billion market cap) and the TRUMP token hit a $15 billion peak in January 2025, turning trading into a dopamine factory.
This is not rational speculation, but a slot machine in blockchain clothing, where the house always wins. We hear similar stories daily, like 27-year-old trader Chump, who told Business Insider: "I love the thrill of watching the numbers go up." He made $10,000 trading Memecoins, but he's the lucky one. Why is $10,000 worth reporting? Because they attract people starting small and betting big. But most are losing, and the leverage frenzy has turned this bull market into a steroid-pumped circus.
02. Position Sizing: Crypto Leverage Math Upends Traditional Thinking
Things get even crazier, with crypto market leverage positions quoted at full risk exposure, a baffling scenario unseen in traditional markets. A $4 million trade with 50x leverage? That's a $200 million market exposure. In stocks or forex, you'd only report the $4 million margin, not the amplified bet. This inflates the optics and magnifies the risk.
Galaxy Research estimates the average 2025 leverage position size at a notional value of $5.2 million, up from $1.8 million in 2021. A massive leap, driven by platforms dangling 100x leverage like candy to retail traders.
Traditional markets limit leverage to 10x for good reason, but crypto's "full exposure" strategy is a marketing gimmick, turning traders into reckless gamblers. When a TRUMP whale cashed out $109 million in two days (New York Times, February 2025), that's not skill, but a leveraged lottery ticket. The other side of that trade lost $2 billion. This is not investing - I've said it many times before - it's a zero-sum bloodbath, and the data shows it's bigger and uglier than ever.
03. Institutions: Calmly Fishing While the Circus Burns
Institutional investors, the so-called "smart money," are not partaking in this leveraged circus. BlackRock's IBIT ETF holds 550,000 BTC, and hedge funds like Millennium applied for $36 billion in BTC ETPs in 2024 (Galaxy, 2025). But they are not chasing the 50x Memecoin manias. Coinbase Institutional's report shows 82% of 2025 institutional crypto allocations are long-term holds, focused on BTC, ETH, and perhaps Solana, centered on a "strategic reserve" narrative, not short-term trading's descent.
Unlike retail investors who panic-sell at every dip, institutions are building positions gradually. Why? Trump's BTC reserve comments and ETF approvals have them eyeing a 5-10 year horizon, not quick doubles.
As James Lavish of the Bitcoin Opportunity Fund said at the 2024 New Orleans Investment Conference: "Bitcoin's transition from speculative to strategic asset" is real, and institutions are betting it will surpass gold (currently around 11% of gold's market cap, and growing daily). They'll ride this bull market, but won't be destroyed by leverage - that's the retail privilege.
04. Trump's Economic Gamble: Recession's Coin Flip and Crypto's Big Moment
Fast forward to mid-2025, the US economy is on thin ice, and Trump is wielding the balancing pole. Picton Mahoney's October 2024 report estimated a 75% recession probability, citing an un-inverted yield curve, rising bankruptcy rates, and manufacturing weakness.
Trump's response? Slash spending, impose massive tariffs, and double down on deregulation. It's a high-stakes gamble that could either crash the dollar or ignite a crypto supernova. If inflation spikes (core CPI at 3.1%, above the Fed's 2% target), Bitcoin's "digital gold" narrative will get rocket fuel.
The timing is eerie, with InvestingHaven's timeline analysis predicting a major bull market peak mid-year (breaking through in March-April 2025). But if Trump's tariffs choke growth and empty retail wallets, the bull run may stall.
The data is mixed, with a Security.org survey showing 60% of crypto-aware Americans believe Trump's return benefits crypto, but some still doubt its safety. This is not a simple catalyst, but a chaotic coin flip with global ripples.
05. Tariff Hedge or Collapse: Crypto's Recessionary Playbook
Will Trump's tariffs trigger a crypto hedging frenzy, impeding the bull market, or make digital assets the ultimate safe haven? The data leans toward the latter.
Coincub predicts daily stablecoin trading volume will reach $300-400 billion by the end of 2025, up from $100 billion in November 2024, as businesses hedge forex risks.
The tokenization of real-world assets (RWAs, like real estate, art, bonds) is exploding, with market value projected to surge from $2.81 billion in 2023 to $9.82 billion by 2030 (Exploding Topics). Why? Liquidity and inflation resistance.
If the US economy stumbles, crypto's decoupling from stocks (correlation down to 0.3 in Q1 2025, Coinbase data) could make it a magnet for capital flight. But the key is that retail is already exhausted - we all know that. An economic stagnation may choke the FOMO fuel that fueled past bull runs. This could be the first bull market led by institutions, not retail, a mind-bending prospect.
06. Retail's Path to Redemption: Greed, Regret, and Empty Pockets
Chatting with crypto veterans, the mood is a mix of PTSD and cautious hope. Many were greedy in 2021, experienced the crash, and now just want to "break even."
Some people have never returned after cashing out at the 2021 peak, and I call them the smart ones. Others are still trading Meme every day, chasing small wins of $500, while admitting it's a "gambling addiction".
The HODL FM poll in 2025 found that 73% of long-term holders hope to at least break even in this cycle, but 40% have not re-entered the market since the 2022 bear market. The data is stifling.
The truth is, retail investors are out of money. The capital of the 2021 bull market is gone, with the household savings rate dropping to 4.9% (Federal Reserve data), down from 7.5% pre-pandemic. If this bull market is ignited, it will not be due to FOMO from parents, but institutional capital, and retail investors will either hitch a ride or be left behind. A bull market driven purely by institutions? Not only possible, but likely to be the reality.
07, Gambling Won't Save Us: Where Is the Real Fuel?
Desperation drives traders to leverage and Memecoins, but that's not enough.
The $2.2 billion in hacking losses in 2024 and the 19% of crypto holders who encountered withdrawal barriers are sending signals of distrust. Gambling on Meme will not inject new capital into the market, it's just rearranging the deck chairs on the Titanic.
New capital must come from elsewhere, such as ETFs (Galaxy predicts $250 billion in AUM), corporate treasuries (MicroStrategy style), or nations (Trump's 20.7k BTC reserve plan). Without these, this bull market is just a mirage. We need to be realistic, don't we? That's the way to get ahead and make money.
08, Open Creator Economy: AI's Global Marketplace in Recession
AI is rewriting the rules of the game, and this bull market may give rise to a borderless open creator economy. On-chain AI agents are surging, with Funds Society predicting 1 million by 2025, involved in trading, gaming, and building decentralized platforms.
What's being traded in a recession? Data shows: luxury goods (45% increase in art NFTs in 2024), essential services (tokenized healthcare credits), and speculative assets (yes, still Memecoins). AI makes it scalable, imagine teen traders tokenizing TikTok influence. This is happening, I'm sure of it.
But it's not all sunshine. Masa's analysis points out that API restrictions and data bottlenecks may hinder growth. If successful, this bull market will be a global wealth transfer, not just a party in the US. If it fails, we're back to the PVP within the circle.
09, Wealth Transition: Patience Prevails, Impatience Bleeds
The market is Darwinian, with patience taking wealth from the impatient.
This bull market will witness wealth shifting from leveraged retail traders to disciplined investors. The cycle begins and ends with the same narrative, Memecoins waning and then surging again.
InvestingHaven predicts that Dogecoin and Shiba Inu will peak again in the Meme frenzy and then rebound. But the data is clear, 68% of Memecoins traders are in the red.
The winners? The quietly accumulating institutions and veterans.
10, Summary: Find Your Seat When the Music Stops
This bull market is a mess, with leveraged frenzy, institutional restraint, Trump's wild bet, and the impending creator economy.
What makes it different is that retail is broke, institutions are disciplined, and the world is watching an economic experiment that could make or break America.
The data screams volatility, but also contains opportunities. Calmly and patiently choose your position, and when the music stops, only the patient will remain.
