Original source: Delphi Digital
Original text compiled by: Stacy Muur, encryption researcher
Original compilation: Deep Chao TechFlow
Introduction
As the end of the year approaches, various studies and predictions are pouring in. @Delphi_Digital recently released the “2025 Market Outlook”, which provides an in-depth analysis of current market conditions and prospects for future trends, covering a series of content such as Bitcoin price trends, major trends and risk factors.
In view of the fact that the full text is too long and requires a lot of time to read completely, TechFlow hereby compiles an article compiled by Stacy Muur on the core views of “2025 Market Outlook”.
This article divides the Delphi Digital report into three parts: the rise of Bitcoin, the collapse of the altcoin season, and future development trends. The current market capitalization of Bitcoin has reached approximately US$2 trillion, but the performance of altcoins has been lackluster. Looking to the future, the growth of stablecoins may bring hope to the market recovery. At the end of the article, Stacy Muur also expressed her unique views on the encryption market in 2025, believing that the encryption market is evolving from the “Wild West” to a more standardized alternative stock market. Web3 native users will be willing to take high risks and participate in speculative transactions. New entrants will adopt prudent risk management and focus on long-term value, and some narratives may be marginalized.
The rise of Bitcoin
There was a time when a Bitcoin price of $100,000 was considered a fantasy.
Now, this view has changed dramatically. Bitcoin’s current market capitalization is approximately $2 trillion – an impressive amount. If Bitcoin were considered a public company, it would be the sixth most valuable company in the world.
Although Bitcoin has attracted a lot of attention, its growth potential is still huge:
· The market value of BTC only accounts for 11% of the total market value of MAG7 (Apple, Nvidia, Microsoft, Amazon, Google parent company Alphabet, Meta and Tesla).
· It accounts for less than 3% of the total market capitalization of the U.S. stock market and about 1.5% of the total market capitalization of the global stock market.
· Its market capitalization is only 5% of total US public debt and less than 0.7% of total global (public + private) debt.
· The total amount of money in U.S. money market funds is three times the market capitalization of Bitcoin.
· The market value of Bitcoin is only about 15% of the total global foreign exchange reserve assets. Assuming that global central banks switch 5% of their gold reserves to Bitcoin, this would bring more than $150 billion in purchasing power to Bitcoin – equivalent to three times this year’s net inflows from IBIT.
· The current global household net worth has reached a record high, exceeding US$160 trillion, which is US$40 trillion higher than the peak before the epidemic. The growth was driven largely by rising home prices and a booming stock market. For comparison, this figure is 80 times the current market capitalization of Bitcoin.
In a world where the Federal Reserve and other central banks push currencies to depreciate by 5-7% per year, investors need to pursue annual returns of 10-15% to offset future losses in purchasing power.
What you need to know:
· If a currency depreciates by 5% per year, its real value will be halved in 14 years.
· If the depreciation rate is 7%, this process will be shortened to 10 years.
This is exactly why Bitcoin and other high-growth industries are getting a lot of attention.
The bubble of copycat season
While Bitcoin has hit one all-time high after another this year, 2024 has not been kind to most altcoins.
· $ETH failed to break above all-time highs.
· While $SOL hit a new high, it was only up a few dollars more than its previous high, a performance that pales in comparison to the growth in its market capitalization and network activity.
· $ARB started the year strong but gradually declined as the end of the year approached.
There are many similar examples. Just look at the performance data of 90% of the altcoins in your portfolio.
Why is this happening?
First, Bitcoin dominance is a key factor. BTC has had an exceptionally strong year, with its price up more than 130% year-to-date and its dominance reaching its highest level in three years, driven by ETF inflows and Trump-related factors.
Secondly, there is the phenomenon of market differentiation.
This year’s market differentiation is a new feature of the crypto market. In past cycles, asset prices have typically moved in tandem. When BTC rises 1%, ETH typically rises 2% and altcoins rise 3%, creating a predictable pattern. However, this cycle is very different.
Although a few assets performed extremely well, many more assets were in the red. The rise of Bitcoin has not led to an overall rise in the prices of other assets, and the “coat season” that many people expected has not arrived as expected.
Finally, Meme coins and AI Agents also play an important role.
The crypto market is always swinging back and forth between “this is a Ponzi scheme” and “this technology is going to change the world.” In 2024, the “scam” narrative dominates.
In the public’s collective imagination, the crypto market always oscillates between “a future technologically unified global financial system” and “the biggest scam in human history” every two years.
Why does this narrative seem to cycle back and forth between two extremes every two years?
Meme Coin Super Cycle and Market Sentiment
The meme coin supercycle has further reinforced the impression that the crypto market is a “Ponzi scheme.” Many people have begun to question whether the fundamentals of the crypto market really matter, and even regard it as a “casino on Mars.” These concerns are not unfounded.
Against this background, I would like to add a remark.
When Meme is called the best-performing asset of the year, people usually only focus on those “mainstream Memes” that already have significant market capitalization and have successfully established communities (such as DOGE, SHIB). However, it is often overlooked that 95% of memes lose value quickly after they are launched. But even so, people still “want to believe.”
This belief prompted many funds previously invested in altcoins to switch to Memecoin – a few profited, but the majority failed. As a result, capital inflows have been concentrated between Bitcoin (institutional money) and Memecoin (high-risk investments), while most altcoins have been ignored.
Delphi believes that 2025 will be the year of technology-driven market transformation, and these technologies will “change the world.”
But I personally am not so optimistic about this. In 2024, a large number of KOLs (key opinion leaders) focusing on Memecoin will emerge. When I tried to create a folder with “real value” 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 advice). This is the nature of the attention economy, and these narratives profoundly influence market trends.
What’s next?
Stablecoin Growth and Credit Expansion
A major challenge facing the current market is the oversupply of tokens. There is an influx of new assets, driven by private investment and public token offerings. For example, in 2024 alone, more than 4 million tokens were launched on Solana’s pump.fun platform. However, in contrast, the total crypto market capitalization only increased 3 times from the previous cycle, compared to 18 times in 2017 and 10 times in 2020.
Two key factors missing from the market – stablecoin growth and credit expansion – are re-emerging. As interest rates fall and the regulatory environment improves, speculation is expected to revive, easing current market imbalances. The central role of stablecoins in trading and staking will be crucial to market recovery.
institutional capital inflows
Until last year, institutional investors remained wary of crypto assets due to regulatory uncertainty. However, this is starting to change with the SEC reluctantly approving a spot Bitcoin ETF, paving the way for future institutional capital inflows.
Institutional investors generally tend to choose investment areas that they are familiar with. Although a few institutions may be involved in Memecoins, they are more likely to focus on assets with more fundamental support such as ETH/SOL, DeFi or infrastructure.
Delphi predicts that the market may experience a “full rebound” in the coming year similar to previous cycles. What is different from the past is that this time the market will pay more attention to projects driven by fundamentals. For example, OG DeFi projects (the original decentralized finance projects) may become the focus of attention due to their track record of withstanding the test of the market; infrastructure assets (such as L1 protocols) may also return to glory. In addition, RWA (real world assets) or emerging fields such as artificial intelligence and DePIN may also become hot spots.
Of course, not all coins will achieve triple-digit gains like in the past, but Meme’s presence will be a part of the market. This could mark a new beginning for a broad crypto rally driven by the market’s overall gains.
Comment: Most institutional traders typically rely on options hedging strategies. Therefore, if there is a “full rally”, the assets most likely to attract institutional interest will be those with options trading – currently mainly traded on the Deribit and possibly Aevo platforms.
Arguments about Solana
@Solana demonstrates the resilience of the blockchain ecosystem. After experiencing a 96% market cap loss caused by the FTX crash, Solana enjoyed an impressive recovery in 2024.
Here are its key performance highlights:
· Developer momentum: By hosting hackathons and issuing airdrops (such as the Jito airdrop), Solana has successfully rekindled the interest of developers and users. This increased engagement not only drives innovation but also creates a virtuous cycle in which technology development and user adoption complement each other.
· Market leadership: Solana is leading the way in crypto market trends in 2024, from Meme to AI applications. What is particularly noteworthy is that its Real Economic Value (REV, a comprehensive measure of transaction fees and MEV) exceeds Ethereum by more than 200%, showing strong market vitality.
· Future Outlook: Solana is considered poised to challenge Ethereum’s dominance in terms of scalability and user experience. Compared to fragmented Layer-2 solutions, Solana provides a seamless user experience and a highly centralized ecosystem, which gives it a significant advantage over the competition.
Stacy’s final thoughts
Current market conditions may be reminiscent of 2017-2018, when Bitcoin reached an all-time high of $20,000 on New Year’s Eve before beginning to fall back in early 2018. However, I don’t think it’s appropriate to compare the crypto market in 2018 to 2025. The two operate in completely different market environments – the once chaotic “Wild West” is rapidly evolving into a more regulated alternative stock market.
We need to realize that the scope of the crypto market extends far beyond the Crypto Twitter (CT) and X platform discussion circles. For those who are not active on these platforms, their understanding and perception of the market may be completely different.
Looking ahead to 2025, I believe the crypto market will diverge into two main directions:
· Web3 native users: This group is deeply involved in the encryption market, familiar with its unique operating methods, and willing to take high risks and participate in speculative transactions such as memes, AI agents, and pre-sale projects. These behaviors are reminiscent of the early “Wild West” era of crypto markets.
· Ordinary investors: including institutional investors and retail investors, who usually adopt a more robust risk management approach and tend to invest in fundamental-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 are likely to be marginalized? Early-stage DeFi projects, RWA (Real World Assets) and DePIN (Decentralized Internet of Things) protocols that fail to take a leading position in their field or blockchain ecosystem will likely gradually lose market attention. This is just my opinion.
PS: This article summarizes the core ideas in @Delphi_Digital’s 2025 market outlook. If you want to fully understand Delphi’s detailed forecasts for 2025 and beyond, I highly recommend readingits original research report。
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