Author: Stacy Muur, Web3 researcher; Translation: Jinse Finance Xiaozou
I have been closely following research reports released by some of the smartest Web3 teams. Their articles provide food for thought, showcasing different perspectives and helping you become more confident in the viewpoints you resonate with.
The research article contains professional opinions that can help you better understand different perspectives on the Web3 space. Now, let's take a look at the summary of the Delphi team's '2025 Crypto Market Outlook.'
1. Long live Bitcoin
Not long ago, many believed that a $100,000 Bitcoin was just a daydream.
Now, this sentiment has shifted dramatically. Bitcoin's market cap is about $2 trillion, which is truly astonishing. If Bitcoin were a publicly traded company, it would become the sixth most valuable company in the world.
Bitcoin has attracted immense attention but still has considerable room for growth.
Bitcoin's market cap is only 11% of the total market cap of the seven major US tech giants (Apple, Nvidia, Microsoft, Amazon, Google, META, Tesla).
It is also less than 3% of the total market cap of US stocks, about 1.5% of the total market cap of global stocks.
Its entire market cap accounts for only 5% of the total outstanding public debt in the US and less than 0.7% of the total global debt (public plus private debt).
The size of US money market funds is three times that of Bitcoin's market cap.
Bitcoin's market cap accounts for only about 15% of the total global forex reserve assets. Assuming that global central banks reallocate 5% of their gold reserves to Bitcoin, it would increase purchasing power by over $150 billion—three times the total net inflow into IBIT this year.
Household net worth has reached a historical high of over $160 trillion, exceeding pre-pandemic peaks by more than $40 trillion. This growth is primarily driven by skyrocketing home prices and a booming stock market, which is 80 times higher than Bitcoin's current market cap.
In a world where the Federal Reserve and other central banks cause their currencies to depreciate by 5-7% per year, investors need to target a 10-15% annual return to compensate for the resulting loss of purchasing power.
So you understand:
Calculating at a depreciation rate of 5% per year, the real value of currency will drop by half in 14 years.
Calculating at a depreciation rate of 7% per year, the real value of currency will drop by half in 10 years.
This is why Bitcoin and other high-growth sectors have received so much attention and traction.
2. Altcoin disillusionment
Although Bitcoin has repeatedly set historical highs this year, 2024 has not been a particularly successful year for most altcoins.
ETH has not reached its historical high.
SOL has hit a new historical high again, but it is only a few dollars higher than the previous peak, which seems trivial compared to the growth in market cap and network activity.
ARB performed strongly at the beginning of the year but started to perform poorly at the end.
There are many such examples. Just look at the data for 90% of the altcoins in your portfolio, and it will be apparent.
What are the specific reasons?
The first reason is Bitcoin's dominance. Driven by ETF flows and Trump’s support, Bitcoin had an extraordinary year, leading to a price increase of over 130% year-to-date and boosting its dominance to a three-year high.
The second reason is market decentralization.
This year's market decentralization is a new phenomenon in the crypto market. Previous market cycles tended towards synchronous trading. When BTC rose by 1%, ETH usually rose by 2%, and altcoins rose by 3%, following a predictable pattern. However, this cycle is different.
A small number of cryptocurrencies perform exceptionally well, but there are also large swathes of red.
The rising tide of Bitcoin has not benefitted everyone; many are still waiting for the classic 'Path to Altseason' that has yet to materialize.
Another equally important reason is Meme coins (and the recent AI Agents).
Cryptocurrency has been oscillating between 'pure Ponzi schemes' and 'technology that promises to change the world.' In 2024, the former dominated the discourse.
The Meme coin supercycle amplifies the notion that cryptocurrency is just a giant Ponzi scheme. People are starting to question whether fundamentals truly matter, and whether cryptocurrency is merely a 'casino on Mars'—these concerns are valid.
In this regard, I want to elaborate further.
When Memecoin is labeled as the best performer of the year, only the largest Meme coins are considered—those that have already created significant market value and built communities. People often overlook the fact that 95% of the issued Meme coins fail to retain their value, but people are 'willing to believe.'
With this belief, many who previously invested in altcoins turned to purchase Meme coins—some succeeded, but most failed. Hence, capital inflow is primarily distributed between Bitcoin (institutional capital) and Meme coins (high-risk), pushing most altcoins aside.
Delphi believes that 2025 will usher in a shift toward 'world-changing' technologies.
Personally, I am not very optimistic. In 2024, many key opinion leaders will focus on Meme coins. For example, I created a Telegram folder with some truly valuable channels, and it is very difficult to find a channel that is not centered around 'ape calls.' This is a game of attention, and the widely discussed narratives will significantly impact market trends.
3. What's next?
(1) Stablecoin growth and credit expansion
A major obstacle facing the market is the oversupply of tokens. The market is facing a plethora of new assets from private investments and public token offerings. For example, over 4 million tokens were issued on Solana's pump.fun in 2024 alone. Meanwhile, since the last cycle, the total market cap of cryptocurrencies has only tripled, while it increased 18 times in 2017 and 10 times in 2020.
Missing elements—stablecoin growth and credit expansion—are beginning to reemerge. Lower interest rates and more favorable regulations are expected to stimulate speculation and address these imbalances. As stablecoins regain traction, their role as a trading and collateral base will be crucial for market recovery.
(2) Institutional capital inflow
Until last year, institutional capital was still very hesitant to participate in cryptocurrencies due to regulatory uncertainty. However, with the US Securities and Exchange Commission reluctantly approving spot Bitcoin ETFs, this situation has begun to change, paving the way for future institutional investment.
These institutional investors will look for investment opportunities they are familiar with. While some investors may dabble in Meme coins, they are more likely to be interested in assets in fields like ETH/SOL, DeFi, or infrastructure.
Delphi expects the next year to resemble the 'full market rally' phenomenon of previous cycles. This time, projects based on fundamental principles or core objectives will regain attention. These may include assets like OG DeFi, which have a good historical performance and have been proven in practice. They may also include infrastructure assets, similar to the L1 trading we observed earlier. Others could include RWAs (real-world assets) or emerging fields like AI or DePIN.
Not every cryptocurrency will rise by triple digits as before, and Meme coins will continue to exist. This could signify a new beginning and a widespread crypto rally.
Note: Generally, most institutional traders heavily rely on options hedging. Therefore, if there is a 'full market rally', the assets most likely to attract investor interest will be those with options, primarily traded on Deribit or Aevo.
(3) Solana's dominance
Solana showcases the resilience of the blockchain ecosystem. After a 96% crash during the FTX collapse, Solana has seen an astonishing rebound in 2024.
Key highlights include:
Developer momentum: Solana's hackathons and airdrops (like the Jito airdrop) have reignited developer and user engagement, creating a virtuous cycle of innovation and adoption.
Market dominance: From Meme coins to AI applications, Solana has dominated trends in 2024. Notably, its Real Economic Value (REV)—a measure of trading fees and MEV—exceeds Ethereum's by over 200%.
Future outlook: Solana is expected to challenge Ethereum's dominance in scalability and user experience. Its seamless user experience and centralized ecosystem offer significant advantages over decentralized L2 solutions.
4. Final thoughts
For many, the current market situation may remind them of 2017-2018 when Bitcoin peaked at $20,000 before the New Year and began to drop shortly after 2018 arrived. However, in my view, comparing the 2018 crypto market to the 2025 market is irrelevant. These are two completely different environments.
It’s important to recognize that the broad crypto market extends far beyond the timelines of CT and X. Those outside these platforms have vastly different views of the market.
In 2025, I expect the crypto market to split into two main verticals:
Web3 natives: Refers to traders deeply rooted in the crypto market. They have a nuanced understanding of Bitcoin's unique characteristics and are willing to engage in high-risk trading, including Meme coins, AI agents, and presales—elements reminiscent of the Wild West.
Ordinary investors: The risk management approaches of institutional investors and retail investors often differ; they generally stick to more fundamental investment and trading strategies—viewing cryptocurrencies as alternatives to the stock market.
Which verticals will be marginalized? Those early-stage DeFi, RWA, and DePIN protocols that cannot ensure a lead in niche markets or at least maintain a lead on-chain. This is just my thought.
