In the past two weeks, two major signals have appeared in the crypto circle that are difficult for ordinary people to detect.
First, the Ethereum spot ETF maintained net inflows for five consecutive weeks, with a net inflow of $349 million last week. At the same time, the Bitcoin spot ETF had a net outflow of $388 million last week. As time goes by, Ethereum has begun to attract more money than BTC.
Secondly, during Bitcoin’s recent oscillation and correction between 99,000 and 93,000, Ethereum has begun to strengthen compared to Bitcoin. It is no longer like before, where ETH would fall apart if Bitcoin stumbled.
The strengthening of ETH is a major event for the crypto community. Although most of the altcoins have not yet started to surge, they have given a strong bottoming signal. Perhaps at this moment, the crypto rut has begun to enter the chapter of the altcoin season.
The biggest variable now is the pace of interest rate cuts by the Federal Reserve, which will dominate the crypto surge and bloodbath scenario in 2025.
Since Trump will take office on January 20, many favorable crypto-related policies will be implemented by then, and the market will most likely be better in Q1 2025.
After Q1, the market faces huge uncertainties.
In the first scenario, if the United States can achieve a soft landing of the economy in this round of interest rate cuts, it means that the interest rate cut process will be relatively long and bumpy, or even fall short of market expectations. In that case, the copycat season will be very twisted, with many local sectors bursting and a general and crazy rise in the market. It will be more difficult, and positions may have to be adjusted and controlled from time to time.
Another scenario - US corporate borrowing interest rates are high. Long-term high interest rates have destroyed production collaboration. I saw data a while ago that the bank lending interest rate in the US is as high as six or seven points, while the current average profit of global companies is only 5 points.
Therefore, in the process of interest rate cuts, there is a high probability that the concept of economic recession will be hyped. Regardless of whether it is a real recession or a false recession, the Federal Reserve needs a reason to speed up the process of interest rate cuts. The one who is most in urgent need of interest rate cuts is precisely the heavily indebted US government.
Coupled with geopolitical or other human emergencies, a panic black swan may easily occur, and the market will then experience a crash, just like the 312 wave. This crash is not an ordinary deleveraging correction, but a bloodbath that can shatter the beliefs of most people.
If there is a bloodbath scenario in the future, it will be a godsend. The Federal Reserve will flood the market with money and the crypto market will do a "V-reversal" to start a bull market.
No matter which scenario it is, 2025 will be a bloody and turbulent year. It will be a matter of a moment between getting rich and going bankrupt. It is extremely unfriendly to novices. The reason why there are so many stories of getting rich quickly in the crypto circle is precisely because they are based on the huge amount of blood and bones of rookies.
Today, cryptocurrencies are no longer a paradise where you can make money without having to buy them. Individuals who have no brains, no insights, and no humility to learn have no way out.
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