On January 1, 2024, we published an article stating that 2024 would be an important turning point, and the crypto market might welcome a new round of massive growth cycles. As shown in the figure below.
In that article, we also listed some narratives that might become hot topics in 2024, including RWA, AI, GameFi, DePin, DeFi, Layer1, etc. Looking back, some narratives mentioned in the article performed well over the past year, but some narratives did not achieve our initial growth expectations.
In fact, over the past few years, I have customized a big theme for Hu Li Hu Wai every year, such as:
The main theme of 2022 is 'Breakthrough'. That year not only marked the official birth year of the Hu Li Hu Wai self-media IP but also the beginning of our new round of periodic investment in BTC.
The main theme of 2023 is 'Advancement'. The articles produced that year mainly focused on popularizing crypto knowledge and listing various potential projects during bear markets. Therefore, the corresponding annual e-book was named (Blockchain Thinking Advancement).
The main theme of 2024 is 'Method'. Last year's article output mainly focused on sorting out content related to experience, ideas, methods, strategies, and psychological construction. Therefore, the corresponding annual e-book was named (Blockchain Methodology).
In the blink of an eye, it is already 2025. This year, my planned main theme for Hu Li Hu Wai is 'Era', which signifies that the crypto field may welcome or begin to enter a new era, and each of us will become participants and witnesses.
But for most partners, what everyone may be more concerned about is where the key points of the crypto market are this year.
Next, let's briefly sort out the key issues (the questions everyone is concerned about).
1. Altcoin season aspect
In last year's articles, we mentioned the topic of altcoin season many times. For partners who are fully invested or have large positions in altcoins, perhaps one of the most concerning questions is: Will there be opportunities for altcoin season in 2025?
Generally speaking, when BTC.D begins to show a clear downward trend, altcoins usually experience a rotation upward trend. This pattern has been effective in past cycles, as liquidity tends to shift to altcoins in pursuit of higher returns once Bitcoin rises and stabilizes.
Taking the bull market of 2021 as an example, when BTC.D's dominance fell from around 73% to around 40% (the first phase from January 2021 to May 2021), it directly triggered a large-scale altcoin season, with coins such as SOL, DOGE, and ADA experiencing exponential growth, and the corresponding TOTAL3 also grew from a total market cap of $210 billion to around $980 billion. As shown in the figure below.
Although it was affected by the 519 incident at that time, disrupting the market's rhythm, overall, many altcoins performed well in terms of price during that period, and after the market recovered in July, TOTAL3 continued to grow until it began entering the bear market phase in November.
In the week of November 18, 2024, BTC.D reached its highest point of 61.53% since April 2021, then started to decline, followed by a phased increase in some altcoins, with tokens such as AAVE also showing good gains during this period. At the same time, TOTAL3 successfully broke through the 2021 ATH, reaching $1.13 trillion. As shown in the figure below.
Just when most people began to immerse themselves in the heated atmosphere of the long-awaited altcoin season, the Federal Reserve's interest rate meeting on December 19 seemed to have directly caused the market to collapse, followed by an obvious correction phase. Currently, BTC.D is around 58%, and in the short term, it seems to be a relatively psychological resistance zone. Let's wait and see if it can continue to drop to around 40%, then we may still have a chance to see an altcoin season in the first or second quarter of this year.
However, regarding the altcoin season, let’s reiterate what we said in previous articles: this cycle has birthed a massive number of new projects, and many projects still have not completely solved the high FDV and low circulation issues. Coupled with the current market liquidity still facing shortages, even if we welcome an altcoin season this year, it does not mean that all altcoins will have opportunities to rise or break previous highs.
2. Narrative aspect
If you currently cannot grasp the rhythm of the altcoin season in advance and do not have much time and energy for investigation and research, the simplest way to participate is to buy core assets like ETH in batches. Although the returns may not be as large as imagined, at least it can give you peace of mind.
If you want to gain greater profit opportunities during the altcoin season while also being able to bear greater risks, what key narratives should you focus on?
Although this matter may have different interpretations and focal points for everyone, we might as well make a simple enumeration here (the following is just a partial enumeration, and the ranking is not in order):
- AI
Although the AI boom has already gone through several rounds from the lows of 2022 to now, the popularity of AI seems to show no signs of slowing down, and even new narratives such as AI Memes and AI Agents have emerged.
Especially in recent days, the popularity of AI Agents seems to be quite high, and I have noticed that many partners in the group are discussing this topic. As shown in the figure below.
- MemeCoin
Every round of bull market's various wealth stories is basically inseparable from the topic of MemeCoin. So far, I have looked at on-chain data, and the number of MemeCoins providing liquidity pool trading has exceeded 10.97 million. As shown in the figure below.
Although the MemeCoin field seems chaotic overall, with very large price fluctuations, and the vast majority of MemeCoins are likely to end up at zero, retail investors seem more willing to participate. It is foreseeable that if there is still a chance to see an altcoin season this year, MemeCoins will undoubtedly be at the forefront and will once again trigger a new round of wealth creation.
If you cannot grasp the fast pace of this area but do not want to miss out on MemeCoin, it is advisable to focus on projects that have strong communities or viral marketing capabilities.
- RWA
Currently, RWA mainly focuses on tokenizing real estate, government bond products, commodities, etc., to bring traditional finance into the cryptocurrency market. Some projects have also received favor and support from large institutions like BlackRock.
Although many retail investors are still not optimistic about the RWA field so far, if we take a long-term view, with the progress of regulations and other aspects, RWA will definitely welcome further development in the future and may become a new way for some enterprises to capitalize.
As of the writing of this article, the market size of RWA is $15 billion, but compared to the scale of global traditional assets (over $300 trillion), this number is still in the early stages. As shown in the figure below.
- DeFi 3.0
Currently, the development of DeFi seems to be entering a critical turning point. With the promotion of institutional RWA, combined with the deep integration of AI and blockchain technology, perhaps the combination of DeFi and TradFi will become one of the core trends this year.
Moreover, with Trump's official ascension this year, if regulations on DeFi can be further relaxed, it will certainly create a more favorable development environment for this field.
At the same time, since last year BTC and ETH spot ETFs have been approved, major institutions are continuously stepping into the deep waters of the crypto market. In the future, as more traditional field investors begin to accept DeFi tools and this new investment concept, it will surely attract more traditional funds and further accelerate the development of the DeFi field, propelling a new explosive growth phase of related ecosystems.
As for whether DeFi will become a supplementary role to the traditional financial structure or usher in a new wave of decentralized revolution, we cannot predict and can only wait and see.
Of course, in addition to the few main narratives we simply listed above, some paradigm narratives that emerged last year are also worth continuing to pay attention to, such as Telegram bots, Gaming (including platforms like Polymarket), etc. As for whether to focus on key leading projects or those low-market-cap potential projects, that depends on your time, energy, and risk preferences.
In the already passed year of 2024, we experienced many key events, such as the BTC halving (April 20, 2024), witnessing BTC surpass $100,000 (December 5, 2024), the formal approval of BTC ETF (January 11, 2024) and ETH ETF (July 23, 2024), observing CZ's box meal journey, experiencing the airdrop frenzy of various well-known projects, undergoing a super cycle of AI narratives, witnessing the viral spread cycle of MemeCoin, experiencing Trump's crypto highlight moments, and welcoming a new round of interest rate cuts from the Federal Reserve... and so on.
Although 2024 has done ample preparation, for 2025, opportunities and risks still coexist. Whether it’s the altcoin season issue that everyone cares about or which narratives might become hot topics this year, if you wish to continue participating in the market, you must also manage your positions and think clearly before any specific operation.
- Why do you want to buy it?
- What proportion of your position do you plan to 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?
Having addressed several key issues that everyone might be concerned about, let's also do a phased summary.
In fact, in an article last year (November 4, 2024), we mentioned two key points for this year: one is about Hu Li Hu Wai, and the other is about trading.
From a trading perspective, for us, 2025 will mainly be a year of executing exit plans. We will continue to maintain focus and patience and strictly adhere to our trading discipline. Below, I will provide a brief summary of my position situation during the 2022–2024 period from four aspects.
First, the overall position management aspect:
…This article is not finished yet; we will continue to update the remaining content through Hu Li Hu Wai.