2025 is here, and the countdown to the new 365 days has begun! In our previous article Review of 2024: Bitcoin halving and breaking through $100,000, welcoming the best and worst times! , we reviewed the performance of the cryptocurrency market in 2024. So, looking forward to 2025, how will the cryptocurrency market perform?
2025 is the second year of the halving. Historically, the second year of the halving is the beginning and end of a crazy bull market, for example:
The first halving took place on November 28, 2012. The following year, in 2013, Bitcoin rose from about $12 to $1,150, an increase of nearly 95 times. It then reached the peak of this bull market in November 2013, and then began to fall, ending the first halving bull market.
The second halving took place on July 9, 2016. In the following year, 2017, Bitcoin rose from about $400 to $19,800, an increase of nearly 50 times. Then it reached the peak of this bull market in December 2017, and then began to fall, ending the second halving bull market.
The third halving was on May 11, 2020. In the second year, 2021, Bitcoin rose from about US$8,000 to US$69,000, an increase of nearly 9 times; then it reached the peak of this bull market in November 2021, and then began to fall, and the third halving bull market ended.
Will history repeat itself in 2025? Will the fourth Bitcoin halving start a crazy bull market, and where will the bull market end? When will the altcoin season arrive and when will it reach its climax? What are the options for the Fed’s rate cuts, what concepts/currencies are worth paying attention to, and whether global regulation and compliance can really take the crypto market to the next level? Next, we will analyze them for you one by one!
Outlook 2025 1: Will Bitcoin break through $200,000? When will the bull market end?
In 2025, the most important question for market investors is where will the peak of this round of Bitcoin halving be? When will the bull market last? As mentioned above, a crazy bull market will start in the second year after each Bitcoin halving, and reach its peak, and then the bull market will end and a new round of reincarnation will begin.
On April 20, 2024, Bitcoin will complete its fourth halving, and 2025 will be exactly the second year after the halving! According to historical rules, 2025 will be the peak of the fourth round of halving bull market and the end of the bull market.
We can find a few things by summarizing the data:
The price surge after halving occurs 7-8 months after halving. Bitcoin usually starts to rise rapidly and gradually drives the crypto market to explode, such as in 2013, 2017 and 2021.
The peak of Bitcoin's halving price mostly occurs 12-18 months after the halving. For example, the peak of the 2021 bull market occurred about 18 months after the 2020 halving.
The end of a bull market is usually followed by a sharp correction and a bear market phase that lasts 18-24 months.
If historical laws continue to work, the price of Bitcoin will reach its historical high around the end of November-December 2025, and then this round of halving bull market will end.
By then, what will be the high point of Bitcoin? We have said in previous articles that it will probably rise to $190,000-200,000, which may be the top of Bitcoin in the fourth bull market.
Now that we have the answer, let’s briefly talk about the reasons.
From the perspective of the macroeconomic environment, the Federal Reserve will still be in a rate cut cycle in 2025, and liquidity in the market will be more sufficient. The attractiveness of Bitcoin as an anti-inflation asset and a risky asset will be further enhanced. On the other hand, the passage of the Bitcoin spot ETF will attract more and more institutional investors, and geopolitical tensions such as the Russia-Ukraine War and the Middle East War may further highlight the safe-haven properties of Bitcoin as "digital gold". The demand side of Bitcoin is stronger, which are all fundamental factors for the continuation of the halving bull market.
Judging from the on-chain data and market sentiment, the current market as a whole is still in a "middle" state, neither too "hot" nor too "cold".
For example, looking at the Bitcoin rainbow chart, it is currently in the continue holding stage, which is exactly in the middle. There are four other stages above it, including bubble, severe bubble, etc. In other words, most of the current Bitcoin holders are still holding the currency and waiting for it to rise.
Judging from the Bitcoin HODL wave, the data of short-term holders of less than one year is shrinking during this round of Bitcoin's rise above $100,000;
That is to say, many short-term investors who had just entered the market to buy Bitcoin have already sold it. This can also be said that the purpose of the three 10,000-point plunges in December has been achieved. At the same time, the proportion of long-term holders is increasing, which shows that big investors continue to be optimistic about the future market, which will undoubtedly be conducive to subsequent price increases.
As we have said before, the reasons that currently support Bitcoin to reach a high of around US$200,000 are the combination of halving + the approval of spot ETFs + the Fed's interest rate cut cycle, which lay the foundation; the development of the overall ecology of the crypto market and the FOMO sentiment of retail investors, the risk aversion of geopolitical risks and economic uncertainties, and even the gradual clarification of the legal framework for Bitcoin and crypto assets by major economies in the world (such as the United States, the European Union, and China), will add icing on the cake and make Bitcoin stronger.
On the other hand, as digital gold, Bitcoin has been compared with the market value of gold. The current market value of Bitcoin is 1.9 trillion US dollars, while the market value of gold is close to 20 trillion US dollars, a difference of 10 times. It is unlikely to catch up with the market value of gold at present, but it is still possible to become the second largest asset in the world after gold. That requires Bitcoin to increase by about 2-3 times from the current price, that is, to about 200,000 US dollars, which may be the top of Bitcoin in the fourth round of bull market.
The top of a bull market is when the market is overheated, and investors need to flee. According to historical experience, the end of a bull market is often accompanied by some characteristics, such as:
The market was overheated, greed was high, a large amount of speculative funds poured in, and mainstream media coverage of Bitcoin reached its peak;
On-chain indicators are abnormal, such as high on-chain transaction fees, a large amount of Bitcoin flowing into exchanges, etc. We have previously talked about how to foresee a crash and escape the top in advance: After the crash caused 570,000 people to be liquidated, is it time to buy the bottom? How to foresee the crash?
The macroeconomic environment has reversed. If the Fed's policy turns to tightening again, the reduction in market liquidity may trigger an adjustment in risky assets.
2025 will be the most important year for Bitcoin's fourth halving bull market. Based on the halving effect, macroeconomic support, and analysis of on-chain data, Bitcoin is expected to hit $200,000 at the end of the year at the peak of the bull market. By then, investors will also need to pay attention to signs of market overheating at the end of the bull market and develop a reasonable profit-taking strategy. To some extent, how to "lock in profits" is more important than doubling a full position and doubling it again.
Outlook 2025: When will the copycat season occur? When will it reach its climax?
The most exciting time of each halving is the start of the alt season. However, this halving has not seen an obvious alt season so far, and Bitcoin has become the only stage for it. So, when will the alt season come in 2025? When will it reach its climax? We can analyze this issue from the perspectives of historical data, market structure, and ecological innovation.
From the historical data, the time node of the altcoin season often starts when Bitcoin reaches its peak. In the first round of halving, altcoins did not form a trend, and the trend started directly from the second round of halving bull market. In the 2017 bull market, the first full-scale outbreak of altcoins was after Bitcoin hit a high of nearly $20,000 in December 2017, and altcoins began to take over in an all-round way, which lasted until the end of the first quarter of 2018; in the third round of halving bull market, the altcoin season started in early 2021 after Bitcoin broke the previous high of the previous halving, and it broke out in a concentrated manner after breaking the high of $60,000 for the first time in April, and reached its peak in May.
It can be seen that although the outbreak of the copycat season is fierce, its duration is relatively short, which also places high demands on investors' ability to seize opportunities.
Specifically, by 2025, some of the triggering conditions required for the arrival and outbreak of the altcoin season have been met, while others have not yet been met. For example, the price of Bitcoin has reached a relative high of $100,000, but the price has not yet stabilized completely. Market sentiment is indeed still relatively hot, but it is difficult to maintain a high level for a long time. Even in this round of rise, the greed and fear values have not broken through the 90 mark, let alone staying above 90 for a long time.
Judging from the outbreak of new hot spots in the market, although there is no shortage of hot spots, such as Layer 2, MEME, BRC-20 inscriptions, AI, RWA, etc., which have performed well, none of them has reached the level of a big explosion; and Bitcoin's current dominant position is still relatively high, and its market capitalization share has been fluctuating upward since last year, and its current share is still as high as 56.2%.
Judging from these data and market performance, the current copycat season can only be said to have signs, but has not yet entered the fast lane, and is still a long way from a big explosion. Based on historical experience and market outlook, mid-2025 may be the time when the copycat season really enters the fast lane, and the second half of the year will be the time for a big explosion. It is still accumulating momentum.
For investors, seizing the opportunities of the cottage season requires paying attention to market hot spots, technological innovation and ecological growth, while staying calm in the market frenzy and avoiding chasing overly risky assets. The most important thing is to remain patient, as we have said repeatedly before: "Patience is the watershed of wealth"!
Outlook 2025 III: How many percentage points will the Fed cut interest rates? What is the pace of rate cuts?
The importance of the Federal Reserve's monetary policy to the cryptocurrency world is self-evident. It can be said that it determines the existence and form of a bull market to a certain extent. After all, the crypto market is a product of sufficient liquidity, and the amount of money in the market determines life and death.
Starting from September 2024, the Federal Reserve officially entered a cycle of interest rate cuts, with three 100 basis point cuts. This not only directly led to Bitcoin breaking through the $100,000 mark, but also brought the market value of the entire crypto market to a maximum of $3.7 trillion, expanding the ecological pool of the entire market and laying the foundation for the subsequent explosion of projects in various fields.
There will be 8 interest rate meetings in 2025, namely:
January 28-29, US time, January 30, Beijing time
March 18-19, US time, March 20, Beijing time
May 6-7, US time, May 8, Beijing time
June 17-18, US time, June 19, Beijing time
July 29-30, US time, July 31, Beijing time
September 16-17, US time, September 18, Beijing time
October 28-29, US time, October 30, Beijing time
December 9-10, US time, December 11, Beijing time
The current Federal Reserve interest rate is 4.25-4.50%. According to Trading Economics' global macro model and analysts' expectations, in the long run, the US federal funds rate is expected to be around 3.50% in 2025 and around 3.00% in 2026.
There are other institutions in the market that have made predictions about the room for the Fed to cut interest rates in 2025. For example, CITIC Securities expects the Fed to have 50 basis points of room for interest rate cuts next year; Goldman Sachs predicts that the Fed may "skip" a rate cut in January 2025, but will cut interest rates a total of three times in March, June and September to 3.625%; Wells Fargo expects the Fed to cut interest rates three times in 2025, and the pace of rate cuts will slow down in the future, with the Fed possibly cutting interest rates once every other meeting.
At the December 2024 interest rate meeting, after Federal Reserve Chairman Powell struck a hawkish tone, market expectations for the magnitude and speed of rate cuts in 2025 were significantly lowered.
In terms of the reasons for the Fed's interest rate cuts, the Fed's interest rate cuts can be divided into two categories: relief-style interest rate cuts and preventive interest rate cuts.
Relief-style interest rate cuts are usually taken when the economy falls into recession or encounters a major crisis, with the purpose of providing emergency relief. Such interest rate cuts are large and last for a long time, and are common after regional or global crises.
Preventive rate cuts are taken when the economy shows signs of slowing down, with the goal of preventing the risk of a recession. Such rate cuts are smaller in magnitude and shorter in duration. For example, the rate cut cycles in 1995 and 2019 were preventive measures taken to prevent a recession.
The interest rate cut in 2025 is currently mainly a precautionary cut. Therefore, if there is no large-scale economic recession or global financial crisis, the Fed’s interest rate cut in 2025 will not only be smaller in magnitude but also slower in speed.
Therefore, based on a comprehensive judgment, it is reasonable to cut interest rates 2-3 times in 2025, with a total cut of 50-100 basis points.
For the crypto market, on the positive side, as long as the interest rate cuts, market liquidity will increase and the halving trend will continue; on the negative side, if the interest rate cuts really slow down, it may affect investors' expectations for the subsequent market, and thus affect the price ceiling and bull market duration of Bitcoin; in addition, we also need to be vigilant about the potential impact of market overheating, uncertainty in the pace of interest rate cuts and regulatory risks.
2025 Outlook 4: Which concepts/projects will explode?
Each round of halving will usher in a corresponding concept and project explosion. In 2017, it was the ICO represented by the altcoins imitating Bitcoin. In 2021, DeFi and NFT became the main driving force, and emerging public chains, GameFi, and the metaverse also exploded. So what concepts and projects will explode in 2025? Here we will briefly talk about a few specific concepts and projects. Readers need to check more information to draw their own conclusions.
We have already talked about many related projects in the article Bitcoin is approaching 100,000 and is beginning to stagnate. Which altcoins will surge next? . Here we will mainly add some reasons why some tracks will explode in 2025 to help you understand the logic behind it and find your own wealth code.
Layer 2 ecosystem is the core technology to solve the high transaction costs and scalability problems of Ethereum. As the king of public chains, ETH is expensive and congested. In the bull market, it is even more congested and expensive. The opportunity of Layer 2 lies in solving this problem. If it is solved well, a large number of DeFi and NFT projects on the ETH ecosystem will gradually migrate to Layer 2. Because Layer 2 reduces transaction costs and user thresholds, it will attract more retail investors to participate, and the upper limit will be very high. Currently, the popular Layer 2 projects on the market include OP, ARB, MOVE, etc.
MEME coin is the craziest and most dangerous track. According to relevant data, among the top 300 currencies by market value, MEME coin only accounts for 3%, but its trading volume accounts for 6%-7%. This shows the madness of MEME coin players, but the success rate of one in fifty thousand also shows the danger of this track.
At present, the core narrative of Meme coins is gradually changing from a pure speculative tool to a functional asset. For example, decentralized science (DeSci) is opening up new application scenarios through the combination with functional Meme coins; for example, the combination of MEME coins and AI technology has promoted the integration of Meme coins in DeFi, NFT and scientific research. In other words, if MEME coins continue to hype concepts, it will be difficult to explode in the future. Like other tracks, they need to have their own practical uses. I will write an article later to talk about the MEME track and currency, so I will not go into details here.
GameFi 2.0, the integration of gamified finance and the metaverse, is an upgraded version of GameFi, focusing on user experience, long-term value, and the deep integration of games and finance, while combining the metaverse, NFT, and AI technology to form a more attractive ecosystem. In 2025, whether it is a good GameFi 2.0 project depends on whether it has a higher-quality gaming experience, whether it can develop in tandem with the metaverse to expand application scenarios, and whether the role of NFT can be upgraded to a game asset with actual functions.
RWA, real assets on the chain, this concept was actually mentioned as early as the second round of halving. Now it can be popular again and its connotation has been expanded. The main reason is that the development of the current technology, policy and other macro-environment is suitable for the outbreak of RWA. For example, supervision has been gradually clarified, and many countries have an open attitude towards asset chain; institutional investment has entered, and institutional investors have increased their demand for stable and compliant blockchain assets; actual scenarios have expanded, and RWA has been widely used in supply chain finance, real estate investment and other fields.
The combination of AI and blockchain is the cornerstone of the intelligent future. The combination of AI and blockchain aims to enhance the capabilities of intelligent decentralized applications, including data privacy protection, smart contract optimization, and decentralized AI market. AI itself is a concept that has exploded worldwide. In the crypto market, there is a demand for decentralization: blockchain can provide a safe and transparent environment for AI data training, as well as innovative application scenarios: including automated smart contracts, decentralized hosting of AI models, etc., making the AI concept more dazzling in the crypto market in 2025.
DeFi 2.0, sustainable growth and innovative mechanisms. DeFi 2.0 is an improvement on traditional DeFi, focusing on capital efficiency, sustainability of liquidity incentives, and innovation of new financial instruments. DeFi 2.0 is relatively optimized in liquidity, has a lower-risk design, and has more compliant DeFi platforms to attract institutional investors. It is bound to become a hot concept in 2025.
Cross-chain and interoperability, cross-chain technology aims to solve the isolation problem between different blockchain ecosystems and achieve seamless interaction of assets, data and applications. Now the ecosystem of the crypto market is diverse and prosperous enough, and cross-chain is a rigid demand. In addition, there is a trend of multi-chain collaboration. Users need to freely transfer assets and use services between multiple blockchains, and new technological breakthroughs, such as IBC (inter-chain communication protocol) and other technologies gradually mature, which also lays the foundation for the development of cross-chain and interoperability.
Public chain projects are the infrastructure of the entire market. Every bull market has a huge explosion of public chain projects. I have mentioned this many times in the article before, so I will not repeat it: Coin friends recommend currency analysis reply post (II) Public chain special: ETH, SOL, DOT, TIA, SUI, ADA, AVAX, ATOM, TRX, MATIC, NEAR
Other tracks such as Bitcoin-based innovative BRC-20 and inscriptions, privacy technology and privacy coins, social tokens and Web3 social, NFT 2.0, enhanced functionality and practicality, on-chain data and analysis tracks, identity and decentralized identity (DID), DAO and governance tracks, stablecoins and decentralized payments may also make a difference in 2025.
In 2025, the concepts and projects in the crypto market may show a diversified and ecological development trend. The successful outbreak of these concepts and projects will depend on the maturity of technology, market demand and capital support. For investors, keeping up with market hot spots and exploring high-quality projects that combine technology and ecology will be the key to capturing the opportunities for the crypto market to explode in 2025. At the same time, we need to be wary of bubble risks and pay attention to the long-term value and sustainable development capabilities of the projects.
Outlook 5 for 2025: What are the black swan events that need attention amid the pace of interest rate cuts?
In 2025, as the Fed's interest rate cut cycle deepens, the crypto market may usher in new changes. Interest rate cuts usually help stimulate economic growth, but they also come with certain risks. In the process of interest rate cuts, some unforeseen black swan events may occur, which may have a huge impact on the market.
For example, the escalation of geopolitical crises, military conflicts and trade conflicts, such as the US-China conflict and the Russia-Ukraine war, may lead to soaring energy prices and increased market uncertainty; regime change or turmoil, especially in key regions such as Europe, Latin America or the Middle East, may trigger capital outflows and market panic; these events have historically caused a plunge in the Bitcoin and crypto markets. If new Bitcoin application scenarios emerge, they may also drive up Bitcoin prices.
The financial system will collapse systematically, because interest rate cuts may lead to intensified asset bubbles and excessive reliance on leverage expansion by financial institutions. Once market sentiment turns, it may trigger a liquidity crisis, such as bank failures or debt defaults, local debt crises, etc. This may lead to tight market liquidity, resulting in sharp short-term fluctuations in the crypto market, or even a sell-off and crash.
The debt crisis intensified and the global debt bubble burst. The interest rate cut environment may cause global debt levels to continue to rise, especially in highly leveraged economies, where the unsustainability of debt burdens may be exposed during the interest rate cut cycle. In the global debt crisis, Bitcoin and other cryptocurrencies may become safe-haven assets, with increased demand and skyrocketing. However, if liquidity is tight, market panic may lead to sharp fluctuations in the short term.
Regulatory risks are increasing, and global crypto policies are tightening. Major economies around the world are strengthening their regulation of the crypto market. The United States, Europe, Asia and other regions may introduce stricter cryptocurrency regulations, including a complete ban on cryptocurrency trading or restrictions on the use of stablecoins, which may cause the market to plummet. The "9.4" and "5.19" crashes caused by regulatory policies both occurred at the climax of the bull market.
In the 2025 interest rate cut cycle, although interest rate cuts are likely to stimulate economic growth and push up asset prices, the occurrence of black swan events cannot be ignored. From geopolitical conflicts to financial system collapse to regulatory risks, these factors may have a severe impact on the market. Investors should remain vigilant, diversify risks, and pay attention to potential systemic risks and unpredictable external shocks to cope with possible market fluctuations.
Outlook 6 for 2025: Can embracing compliance really take the crypto market to the next level?
As the crypto market gradually matures, more and more crypto projects and platforms are beginning to pay attention to the key issue of compliance. Compliance is not only an important step in the legalization of the industry, but also one of the keys to the sustainable development of the crypto market. For 2025 and beyond, whether compliance can help the crypto market break through the current bottleneck and usher in wider institutional participation and mainstream acceptance has become a hotly debated topic.
In terms of the significance and driving factors of compliance, compliance can reduce regulatory uncertainty and enhance market confidence. For example, the U.S. Securities and Exchange Commission (SEC) and regulators in other countries have gradually formulated legal provisions related to cryptocurrencies, which will enable the crypto market to develop under a compliance framework, thereby attracting more institutional funds and investors.
Compliance has also led to the participation of more mainstream financial institutions. The maturity and compliance of cryptocurrency, DeFi, NFT and other fields will make traditional financial institutions more willing to get involved in this market. Banks, fund companies, insurance companies, etc. will be able to provide crypto asset management, investment products and trading services in a compliant manner.
In addition, compliance can also protect the rights and interests of investors and prevent market manipulation. Compliance will enhance market transparency, prevent malicious manipulation and market manipulation, and ensure that investors' rights and interests are not infringed. For example, regulations such as anti-money laundering (AML) and KYC can effectively curb illegal trading activities and combat fraud. These measures will reduce the scale of black market transactions and improve the health of the entire crypto market.
In general, compliance can push the crypto market to a higher level, such as attracting more institutional capital and investors. For example, the launch and approval of the Bitcoin spot ETF provides institutional investors with a legal way to participate in the Bitcoin market, which promotes the further development of the market. In the future, with the advancement of compliance, the emergence of more products such as Bitcoin ETF and Ethereum ETF will further promote the growth of market capital.
In addition, compliance can also promote the birth of more crypto platforms and financial products, such as compliant futures, options, funds and other investment tools, helping market participants to hedge risks on multiple assets, thereby improving market stability.
Although the compliance process of the crypto market may face many challenges, in the long run, it will become one of the key factors driving the development of the market. Compliance can not only promote the maturity of the market, but also create a more favorable environment for the popularization of cryptocurrencies and blockchain technology.
In 2025, as regulatory policies are gradually implemented, we may see the following trends: more crypto assets gain legal status, emerging fields such as DeFi and NFT achieve better development, global unified compliance standards are gradually established, and countries may work together to introduce unified regulatory standards to facilitate cross-border crypto transactions and payments.
Driven by compliance, the entire crypto market will enter a more mature and healthy stage, and will usher in more institutions and funds to drive further expansion and innovation in the market.
Summarize
2025 will be the most important year in the fourth round of Bitcoin halving. Bitcoin's impact on the high point of $200,000 may become a global event and may also mark the high point of a new bull market. However, whether the bull market ends or not depends not only on the price itself, but also on whether the long-term value of the industry and whether the ecology can continue to support its growth.
With the in-depth participation of institutional funds, the continuous evolution of technology and the differentiated development of regional markets, the future of the crypto market is still full of hope. However, investors need to remain calm, reasonably assess risks, seize long-term and short-term opportunities, and prepare for this most exciting year possible.
I would like to use the ending of the previous article Review of 2024: Bitcoin halving and breaking through $100,000, welcoming the best and worst times! again here:
166 years ago, the British writer Dickens vividly described the world at that time in A Tale of Two Cities: It was the best of times, it was the worst of times! It was the age of wisdom, it was the age of foolishness! It was the spring of hope, it was the winter of despair! People had everything before them, and people had nothing before them!
166 years later, the world seems to have changed a lot with the advancement of technology and the changes in the world, but it also seems that nothing has changed, because human nature has never changed!