Original text: (The 2025 Gameplan)
Author: 0xkyle
Translation: Deep Tide TechFlow
Good morning! Predicting the future has never been an easy task, but as traders and investors, we need a clear plan. Like all plans, this one will adjust with changes in market conditions—after all, the market is a constantly changing ecosystem. This memo is just based on my current perspective and some preliminary thoughts on 2025, for reference only and does not constitute investment advice.
Before discussing 2025, let me first review the plans for 2024. If you're not interested, feel free to skip ahead.
To be honest, there were quite a few places in my 2024 plan that went wrong. Let's take a look at them one by one:
The impact of Bitcoin halving is underestimated.
At that time, many people debated whether Bitcoin halving was 'bullish cashing out to bearish' or would become 'bullish expectation' as in history. It turned out that this halving did not cause much of a stir, but it became the starting point of a bull market.
The judgment that rate cuts are bearish is a miscalculation
This judgment is clearly wrong. However, I publicly adjusted my view before the rate cuts. The initial assumption was: 'Inflation remains high, and rate cuts may occur only after significant deterioration in economic data, becoming a passive response.'
It turns out that the Federal Reserve's actions broke this assumption. For most of 2024, the right strategy was to trust the Federal Reserve's statements.
Failure to execute scenario planning
My core plan for 2024 is: 'Reduce risk by partially unloading before interest rate cuts, buy back after prices drop, while keeping some positions unchanged.'
But in reality, I didn't execute this plan at all, haha.
The market trend in 2024 completely exceeded expectations—from the initial sell-off after the ETF launch, to the rebound in the first quarter, to the summer's weakness, and finally, the rate cuts had a positive impact on the stock market, but threw the crypto market into chaos. Bitcoin's price hovered between $50,000 and $60,000 until the real breakout came with the elections at the end of the year.
Looking back, my biggest mistake was not realizing that 2024 was the year when traditional financial institutions gradually accepted Bitcoin. This should have been the main theme of 2024—traditional finance slowly but surely entering the Bitcoin space.
Judgment about narratives:
Beneficiaries of ETFs: COIN (stock)/BTC/ETH
I mentioned some tokens like STX and TRAC, but they performed poorly. COIN performed exceptionally well; when I wrote the article, COIN's price was around $120.
Furthermore, niche narratives like BRC-20 and LST, although they didn't last long, performed well in the first quarter of 2024.
Success of SOL
At that time, the price of SOL was $60! This may be one of my most successful trades. I wrote this article when the price was only $20 and predicted that 'SOL will reach three digits in the next cycle.' It turned out that this prediction was completely correct.
Regulatory and product market fit
While I captured the narrative of regulation, I chose the wrong tokens. The idea at the time was to select projects that had passed the DeFi regulatory threshold but had not yet fully proven market demand. However, I chose MMX and dYdX, which was clearly a wrong decision.
Mistakes in decentralized AI
I used to be very optimistic about decentralized AI, but at the peak of the first quarter of 2024, I realized that the actual developed products were far from my expectations. Projects like Render and Akash lack practical application scenarios and feel more like 'air coins.'
Success of GameFi v2
In the first quarter of 2024, GameFi-related assets performed exceptionally well, such as BEAM's significant price rise, and many GameFi projects also experienced a wave of enthusiasm. However, only those who sold at the peak in time could profit.
Other potential narratives
DePIN / RWAs
DeSci
Meme (BONK / DOGE / PEPE / HPOS10INU)
RUNE / CACAO
GambleFi
Airdrops (LayerZero / Starknet / ZKSync)
Among these narratives, there seems to be nothing particularly outstanding except for Meme—Meme performed very well in the first quarter of 2024, with Bonk's price basically rising 2-3 times since I mentioned it. DePIN also had its shining moments, such as projects like Geodenet and Helium; however, I did not pay too much attention. A few months ago, decentralized science (deSci) started to emerge, and the BIO token even launched on Binance. However, to be honest, I am not particularly optimistic about this field.
Cycle peak
At the end of the article, I wrote: 'There is one thing I haven't talked about, which is how I think this cycle will end—recently, I have been thinking more and more about a point from GCR, that 'the tiny peak (pico-top) of the last cycle was when funds entered, and the tiny peak of the next cycle will be when countries start buying.'
Now looking back, with the perspective of hindsight—I think this view is very persuasive, and I plan to incorporate it into my 2025 investment plan. This is definitely on my list of 'main signals for this cycle.' This logic is very clear and reasonable.
2025 Plan
Now that the review of 2024 is over, let's get straight to the subject. As usual, I will begin my analysis with macro and scenario planning, before exploring specific investment narratives.
Scenario planning
2024-?? The cycle has already started. Personally, I believe it began at the end of 2023, but that's just a detail. So far, the market trend has been as follows: On January 10, Bitcoin ETF launched → set a historical high, driving altcoin season (altszn), followed by a period of oscillation in the second and third quarters of 2024, with Bitcoin's price fluctuating between $50,000 and $60,000. By election day, Bitcoin broke its historical high, rising to $100,000 but failing to break through further, currently oscillating around $90,000.
It is worth noting that altcoin seasons or so-called 'good times' often accompany Bitcoin reaching peaks. The first time was when Bitcoin surged to $69,000 but failed to break through; the second time was when it surged towards $100,000.
The next cycle of altcoins may begin after Bitcoin successfully breaks $100,000. Although I hope this happens in the first quarter of 2025, it may also repeat the oscillating market like in the second/third quarter of 2024. This is something I need to prepare for mentally. Therefore, I have planned the following possible market scenarios:
Here is a diagram of my views:
Scenario 1: Bitcoin and altcoins rise together. If 2025 becomes a one-sided bullish market, with Bitcoin continuing to rise and altcoins performing well, we may see a repeat of the comprehensive rally of the past two months.
Probability: 30%-40%
Action plan: Buy quality altcoins on dips and seize opportunities.
Scenario 2: Bitcoin rises, but altcoins have limited gains. This is similar to the market in 2024, where the market may still be volatile in the coming months, but overall is more optimistic than in 2024 (because Bitcoin keeps rising). Certain sectors will perform well.
Probability: 50%-60%
Action plan: Buy selected altcoins on dips, avoid overheated areas, and look for the next potential direction.
Scenario 3: Bitcoin rises, but altcoins fall. If this is the peak for altcoins, Bitcoin may continue to rise strongly while altcoins perform poorly.
Probability: 20%-30%
Action plan: Decisively clear out altcoins, and although some pullbacks may be incurred, if altcoins lack upward momentum, it is still necessary to cut losses in a timely manner.
Scenario 4: Both Bitcoin and altcoins fall. If the market peaks, all assets will enter a downward cycle.
Probability: 10%-20%
I believe that Bitcoin's breakthrough to new highs won't take as long as in 2024, as the current macro environment has already provided favorable support for Bitcoin. During the 'summer lull' in 2024, even though ETFs had just launched, traditional financial institutions were still trying to tell their clients the value story of Bitcoin. However, at that time, there was no consensus on the importance of Bitcoin globally.
Now, with Trump in office, discussions about 'Strategic Bitcoin Reserve' (SBR) are heating up, and this narrative has undergone significant changes.
While I won't speculate on the likelihood of SBR's establishment, it is undeniable that this new political environment has brought more attention to the digital asset space. Especially when the president of the world's largest economy frequently talks about Bitcoin, it becomes easier for people to be persuaded to buy it.
Recognizing this regime change is extremely important. Therefore, I believe BTC will continue to sail smoothly in 2025, while for altcoins, it is a similar but different story.
From the performance of the total market cap of altcoins (Total3), it reached a historical high in the first quarter of 2024, and again set a new cycle high in the fourth quarter. The overall trend is similar to historical cycles. Frankly, the differences between my scenario 1 and scenario 2 are not significant.
The key lies in how to grasp positions and timing. I am optimistic about 2025, but I cannot predict how long everything will take. Although I think the one-sided bullish trend will be faster than in 2024, altcoins may still face significant declines during periods of lack of catalysts.
My strategy is: as long as the cycle has not peaked, maintain net long positions, whether in Bitcoin or other assets. I do not think 2025 will replay the 'summer lull' of 2024, but similar oscillation periods may occur—market sentiment may be low, but prices can still remain relatively stable.
For on-chain assets, their volatility is greater, and they may experience declines of up to 70% during market adjustments. Therefore, my goal is to sell when on-chain assets are at their hottest, switch back to large altcoins (top 20 by market cap), and then gradually reposition.
I do not believe that alternative coins (alts) have reached their peak here, as I cannot imagine Bitcoin (BTC) continuing to rise in the absence of strong performance from alts. Furthermore, I do not believe Bitcoin will peak at this stage.
Conclusion:
Bitcoin will continue to rise, and its increase is expected to exceed the performance of 2024.
Regarding altcoins—maintain an offensive stance, but be sure to grasp the timing for switching to defense. However, compared to 2024, the defensive intensity can be appropriately weakened.
Risks
Cycle peak
Cycle peaks are usually a self-fulfilling phenomenon. Although I believe we are still far from the peak, this needs to be reassessed weekly. Cycle peaks are not necessarily a specific 'event'; it is more of a state that gradually approaches over time.
Risks of Strategic Bitcoin Reserve (SBR)
After the new president took office, everyone is paying attention to his policy direction. Although Bitcoin currently has tailwinds, it would be quite an unfavorable signal if the president completely ignores Bitcoin.
I believe the risks mainly lie in two aspects: either the SBR plan is shelved, or SBR is not implemented but some alternative solution is launched. If it is the latter, although it may bring bearish sentiment initially, as long as it is beneficial to Bitcoin, it will ultimately turn into bullish.
Supply risk
In the summer of 2024, global stock markets repeatedly set new highs, but the crypto market faced significant selling pressure, mainly from suppliers like Mt. Gox, Germany, and Grayscale GBTC.
Supply risk always exists; there will always be institutions or individuals holding large amounts of Bitcoin, such as the UK government, Silk Road liquidation assets, FTX distributions, etc. While these events may bring short-term pressure, they could also become good buying opportunities if everything goes smoothly.
Macroeconomic risks
I believe that even if the rate cut is small, as long as interest rates continue to decline, market liquidity will improve, which is still a positive signal.
If the signals are bearish (inflation rises again, the Federal Reserve has to raise interest rates), it could have a negative impact on digital assets.
Themes and tokens
Now we enter the most anticipated part. But before we begin the discussion, I want to emphasize again: 'Take the offensive, but know when to switch to defense.' In this cycle, active investment management will far outperform passive management.
The past strategy of 'buy and hold for the long term' is no longer applicable. For example, although Solana rose tenfold in 2023, its performance throughout 2024 was almost on par with Bitcoin. Similarly, top tokens like TAO did not benefit from the recent AI craze. Meanwhile, memes have lost their past glory, like 'Dogecoin is no longer popular,' 'Calm Brother is not calm anymore,' and 'Dwarf Hippo seems to have lost its shine.'
It is foreseeable that there will be almost no assets suitable for 'buy and hold for the long term' in this cycle.
Additionally, I like to think: Who are the marginal buyers in the market? Currently, there are mainly three types of marginal buyers in the market: institutional investors (traditional financial institutions), funds (liquidity funds/crypto-native funds), and speculators (perpetual contract traders, on-chain players, etc.).
A successful investment narrative needs to attract the attention of at least one of these types of buyers. Based on this, let's start the analysis:
AI Theme
AI is still an important investment theme. But as mentioned earlier, we have already gone through several waves of speculation. If you've read my views on AI tokens, you would know I think the next wave is about to come.
Macro trends: From 'speculation' to 'fundamentals' to 'actual utility.'
Micro trends: From 'social buzz' to 'fundamentals-driven' to 'actual applications and virtual identity.'
However, 'buy and hold for the long term' is not a good strategy. For example, as the beginning of all this, Goat has dropped 60% from its peak and may continue to perform poorly.
Recommended tokens: Application technology/clusters/games/consumer-facing AI
For example, ALCH (game development), Griffain (AI helping manage wallets), Digimon, Ai16z (leaders in the AI field). Of course, there are many other tokens that might be missed, but these are my top picks.
DeFi
DeFi (Decentralized Finance) is still an important investment theme, but it is more challenging to invest in. The number of tokens that can truly benefit from it is very few; even if these tokens have potential, their prices may not rise significantly (e.g., performance in the LST-related field).
From a risk and return perspective, DeFi is not my first choice, but I believe this field will continue to develop in 2025.
Recommended tokens: AAVE, ENA, Morpho, Euler, USUAL
Alternative tokens: Stablecoins, payment-related tokens
Layer 1 blockchain (L1) transactions
Although it may spark controversy, I believe L1 transactions will regain focus in the market in the future. The speculative potential of the L1 sector is evident. Taking Sui as an example, the rise from $1 to $4 shows that market interest in L1 is recovering.
L1 transactions are currently undervalued by the market but have great potential, just like Hype has already risen tenfold.
Recommended tokens: SUI, Hype
Alternative tokens: Abstract
I have little enthusiasm for Monad and Berachain, but I am very much looking forward to Abstract—I think it could become a breakout project.
NFT tokens and game tokens (new wave)
I am also very optimistic about this field. Recently, I invested in some gaming projects and believe that NFT tokens are worth paying attention to. For example, Pengu's price is gradually recovering, Azuki launched $ANIME, and Doodles also have their unique features. Although I don't believe NFTs themselves will make a comeback, their related tokens may find new opportunities.
Game tokens are also worth paying attention to. Off-The-Grid proves that it is possible to develop an interesting game. Given that this field is currently undervalued, I think it is a good strategy to delve into high-quality game projects that are about to launch tokens.
Recommended tokens: Pengu, Anime (Azuki), Spellborne, Treeverse
Alternative tokens: Prime, Off the Grid (if tokens are issued), Overworld
Other narratives
Here are some narratives I am paying attention to; although I am not particularly optimistic, they still have certain appeal:
Data tokens: Kaito, Arkm
Meme: Currently, the only one I am interested in is PEPE; most others have already fallen out of favor.
Decentralized IoT (DePIN): PEAQ, HNT
Ordinals
Classic altcoins (Dino Alts): XRP, etc.
Old DeFi projects: CRV, CVX
2025 Predictions
Here are some bold predictions I have for 2025. These ideas may sound a bit incredible, but they are not entirely impossible:
DePIN (Decentralized IoT) has officially landed through acquisitions by a large company.
Binance's market share in the exchange market has declined but was surpassed by Bybit or OKX instead of Hyperliquid.
With advances in VR technology, metaverse tokens are revitalized.
ICOs (Initial Coin Offerings) are back in vogue.
ETH's on-chain prosperity season did not arrive.
Sui's price broke into double digits (at least $10).
ETH staking yields were approved through ETF, leading to more staking tokens and yield aggregation products, similar to the situation in 2021.
A well-known artist interacts with fans and rewards them using NFTs and tokens.
Bitcoin's price reaches $200,000.
More CEOs or founders of L1 projects choose to resign under the influence of Aptos.
Base loses in the on-chain competition, replaced by another L1 project, while Solana maintains its lead.
Summary of thoughts
Thank you for sticking around to this point! This is my investment plan for 2025. I expect these plans may adjust with market changes, just like the plans for 2024.
The most important advice here is: Stay flexible and go with the flow like water. Enjoy the journey; market changes are inevitable, but that's what makes investing fascinating. As the saying goes:
'No one can step into the same river twice, for the river is ever changing, and so are people.'
Good luck, and safe travels! If you gain life-changing benefits on this journey, don't forget to use those gains to truly change your life.
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