Due to the drop in U.S. stocks yesterday, the crypto market is following suit with a pullback. Bitcoin is fluctuating around $92,800, while Ethereum is around $3,350. The market has been experiencing a downward trend recently, primarily due to insufficient market liquidity, as U.S. institutions and investors are still on Christmas holiday. Another reason is due to Mentougou. Over the past two weeks, Mentougou's address has been selling Bitcoin, with a total of 1,338 Bitcoins sold, worth about $123 million. They still have over 36,000 Bitcoins left.
However, this selling pressure has little impact on the market, which needs some time to digest it. Think back to when Grayscale sold hundreds of thousands of Bitcoins; the market held up well, let alone the tens of thousands from Mentougou. The good news is that MicroStrategy announced yesterday that it spent approximately $209 million to buy 2,138 Bitcoins, with an average price of about $97,837 each. At the same time, Tether also purchased 7,629 Bitcoins worth $705 million.
Tether has been using 15% of its company profits to buy Bitcoin every quarter since May 2023. They currently hold Bitcoin worth a total of $7.7 billion, making it the 6th largest BTC wallet address. These facts indicate that large institutions are still making significant purchases of Bitcoin. I have also been averaging down recently, as I believe Bitcoin has reached a bottom range, and the current price is very appealing. The market is anticipating that Trump will fulfill his promises once he takes office, so I have a rather optimistic outlook for the first quarter of next year. If Trump starts to fulfill his promises right after taking office in 2025, Bitcoin and Ethereum prices could experience a surge. However, if Trump's promises are not fulfilled or do not meet market expectations, there could be a significant pullback. Therefore, positions in altcoins should be well-controlled and not heavily weighted. Among altcoins, the AI agent sector performed the strongest today, with AI16Z and Eliza showing an upward trend against the market.
From the current trend, the AI AGENT sector is developing rapidly, and Binance and Coinbase may launch AGENT-type tokens in the future. The popularity of AI agents has far surpassed meme coins, with high levels of funding, developers, and attention. I believe that the AI AGENT sector may experience a major explosion in 2025. These agents are no longer limited to executing single tasks but can trade autonomously, collaborate with other agents, and interact with humans in innovative ways. Currently, the leading players in the AI agent sector are VIRTUAL, AI16Z, and Aixbt, while GAME and ELIZA are ranked second. AI16Z plans to develop AI's Layer 1, and ELIZA has become the most popular repository on GitHub in December. Notably, Grayscale Research updated its list of the top 20 assets in the cryptocurrency industry for the first quarter of 2025, adding HYPE, ENA, VIRTUAL, JUP, JTO, and GRASS.
Grayscale stated that this quarter they will focus on projects in three core markets: the U.S. elections and their potential impact on industry regulation, particularly in areas like DeFi and staking; breakthroughs in decentralized AI technology and the application of AI agents; and the growth of the Solana ecosystem. Therefore, in terms of investment strategy, I recommend allocating 80% of the position to Bitcoin, as it has the highest certainty and a vast potential for growth after Trump takes office. The remaining 20% can be allocated to projects in the AI AGENT, HYPE sector, and DEFI sector. If funds are limited, one can choose only the leading projects; if there is a larger amount of capital, it can be diversified into some second-tier and third-tier projects.