In that article, we also listed some narratives that may become hot topics in 2024, including RWA, AI, GameFi, DePin, DeFi, Layer1, etc. Looking back, some of the narratives mentioned in the article did perform well overall in the past year, but some narratives did not meet our initial growth expectations.
In fact, in the past few years, I have customized a major theme for Hualihuawai every year, such as:
The big theme of 2022 is "breaking the impasse". That year is not only the official birth year of the self-media IP "Hua Li Hua Wai", but also the beginning of our new round of cyclical investment plan.
The main theme of 2023 is "Advanced". The output of articles that year mainly focused on popularizing crypto knowledge and exploring and listing potential projects during various bear markets. Therefore, the e-book of the corresponding year was named (Advanced Blockchain Thinking).
The main theme of 2024 is "method". Last year's article output mainly focused on the content combing of some experience ideas, methods and strategies, psychological construction and other dimensions. Therefore, the e-book of the corresponding year was named (Blockchain Methodology).
In the blink of an eye, it is 2025 again. This year, the main theme I plan to set for Hualihuawai is "Era", which indicates that the encryption field may usher in or begin to enter a new era, and each of us will become a participant and witness.
But for most of our partners, what they may be more concerned about is what are the key points of the crypto market this year?
Next, let’s briefly sort out the key issues (issues that everyone is more concerned about).
1. The cottage season
In last year’s articles, we mentioned the topic of altcoin season many times. For those who are currently holding full or large positions in altcoins, perhaps one of the most concerned issues is: Will there be another altcoin season opportunity in 2025?
Generally speaking, when BTC.D begins to show a clear downward trend, altcoins will generally experience a rotation and rise. At least in the past cycles, this rule and pattern has always been effective, because as Bitcoin rises and stabilizes, liquidity tends to turn to altcoins to pursue higher returns.
Taking the bull market in 2021 as an example, when the dominance of BTC.D dropped from around 73% to around 40% (the first stage was from January to May 2021), it directly triggered a large-scale altcoin season, and currencies such as SOL, DOGE, and ADA all experienced exponential growth, and the corresponding TOTAL3 also increased from a total market value of US$210 billion to around US$980 billion. As shown in the figure below.
Although the market rhythm was disrupted by the 519 incident, overall, many altcoins performed well in terms of price at that time. After the market recovered in July, TOTAL3 continued to grow until November before entering the bear market stage.
In the week of November 18 last year (2024), BTC.D reached its highest point since April 2021 at 61.53%, and then began to decline. Then some altcoins also began to rise in stages, and some tokens such as AAVE also saw good gains during this period. At the same time, TOTAL3 also successfully broke through the ATH in 2021 and reached 1.13 trillion US dollars. As shown in the figure below.
Just when most people were beginning to immerse themselves in the hot atmosphere of the altcoin season finally coming, the Federal Reserve's interest rate meeting on December 19 seemed to have directly brought down the market, and then the market entered a clear correction phase. At present, BTC.D is maintained at about 58%, which seems to be a relative psychological resistance zone in the short term. Let's wait and see. If it can continue to drop to around 40%, then we still have a chance to see the altcoin season in the first or second quarter of this year.
However, regarding the altcoin season, we still say the same thing as 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 completely solved so far. In addition, the current market liquidity still faces the problem of insufficient liquidity. Therefore, even if we usher in the altcoin season again this year, it does not mean that all altcoins have the opportunity to rise or break through their previous highs.
2. Narrative
If you are currently unable to grasp the rhythm of the altcoin season in advance, and do not have enough time and energy to do investigations and research, then the easiest way to participate is to buy core assets such as ETH in batches. Although the returns may not be as large as you imagined, at least you can buy with confidence.
If you want to gain greater profit opportunities during the copycat season while also being able to withstand greater risks, what key narratives should you focus on?
Although everyone may have different understandings and concerns about this matter, we might as well make a simple list here (the following is only a partial list, and the ranking is in no particular order):
- AI
Although the AI craze has gone through several rounds from the end of 2022 to now, the popularity of AI does not seem to show any signs of slowing down, and even new segmented narratives such as AI Memes and AI Agents have emerged.
Especially in recent days, AI Agents seems to be quite popular, and I found that many friends in the group are also discussing this topic. As shown in the figure below.
- MemeCoin
The various versions of the stories of getting rich quickly in each round of bull market are basically inseparable from the topic of MemeCoin. So far, I have looked at the on-chain data and the number of MemeCoins that provide liquidity pool transactions has exceeded 10.97 million. As shown in the figure below.
Although the MemeCoin field as a whole seems chaotic, the price fluctuations are also very huge, and the final outcome of most MemeCoins is likely to be zero, retail investors seem to be more willing to participate in it. It can be predicted that if there is a chance to see the alt season this year, then MemeCoin will definitely bear the brunt and a new round of wealth creation will appear.
If you can’t grasp the fast pace but don’t want to miss out on MemeCoin, it is recommended that you focus on projects with strong communities or viral marketing capabilities.
- RWA
Currently, RWA is mainly focused on introducing traditional finance into the cryptocurrency market by tokenizing real estate, treasury products, commodities, etc., and some projects have also been favored and supported by large institutions such as BlackRock.
Although many retail investors are still not optimistic about the RWA field, if we look at it from a long-term perspective, with the advancement of supervision and other aspects, RWA will definitely usher in further development in the future and have the opportunity to become a new way for some companies to capitalize.
As of the time of writing, the RWA market size is $15 billion, but compared to the size of traditional assets worldwide (over $300 trillion), this figure is still in its infancy, as shown in the figure below.
- DeFi 3.0
At present, the development of DeFi seems to be entering a critical inflection point. With the advancement of institutional RWA and the in-depth 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 officially taking office this year, if the regulations on DeFi can be further relaxed, it will inevitably create a more friendly development environment for this field.
At the same time, because the spot ETFs of BTC and ETH have been approved last year, major institutions are also continuing to step into the deep waters of the crypto market. In the future, as more and more investors in traditional fields begin to accept DeFi tools and this new investment concept, it will surely attract more traditional capital inflows, which will further accelerate the development of the DeFi field and promote a new round of explosive growth in the related ecology.
As for whether DeFi will become a supplement to the traditional financial structure in the future, or will usher in a new wave of decentralized revolution, we cannot predict this and can only wait and see.
Of course, in addition to the main narratives we briefly 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 you want to focus on key head projects or those low-market-cap potential projects, this depends on your own time, energy and risk preference.
In the past year of 2024, we have experienced many key events. For example, we have experienced another BTC halving (April 20, 2024), witnessed BTC breaking through $100,000 (December 5, 2024), witnessed the official approval of BTC ETF (January 11, 2024) and ETH ETF (July 23, 2024), watched CZ’s lunch box journey, experienced the airdrop craze of various well-known projects, experienced the super cycle of AI narrative, experienced the viral spread cycle of MemeCoin, experienced Trump’s encryption highlight moment, and ushered in a new round of interest rate cuts by the Federal Reserve... and so on.
Although we have done enough homework in 2024, opportunities and risks still coexist for 2025. Whether it is the copycat season issue that everyone is concerned about, or which narratives may become hot topics this year, if you want to continue to participate in the market, you must also do a good job of position management and think clearly before making any specific operations:
- Why did you buy it?
- How much position do you plan to invest in it?
- What is the maximum loss you can afford on it?
- What is your take profit and stop loss plan?
- How long do you plan to hold it?
Having discussed several key issues that you may be concerned about, let’s make a brief summary.
In fact, in an article last year (November 4, 2024), we mentioned two key points for this year: one is for the outside of the conversation, and the other is for the transaction level. As shown in the figure below.
In terms of trading, for us, 2025 is mainly the year to execute the exit plan. We will continue to stay focused and patient and strictly abide by our trading discipline. Below I will briefly summarize some of my positions from 2022 to 2024 from four aspects.
First of all, the overall position management:
...This article is to be continued. We will continue to update the remaining content through Huali Huawai.
