Original author: Stacy Muur
Original translation: Deep Tide TechFlow
Introduction
As the year draws to a close, various studies and predictions are flooding in. @Delphi_Digital recently released the (2025 Market Outlook), which delves into an analysis of the current market situation and future trend outlooks, covering a range of topics, including Bitcoin price trends, major trends, and risk factors.
Given the length of the full text, a complete reading requires significant time. Deep Tide TechFlow has compiled an article summarizing the core viewpoints of Stacy Muur regarding (2025 market outlook).
This article divides the Delphi Digital report into three main parts: the rise of Bitcoin, the bubble of altcoin season, and future development trends. Currently, Bitcoin's market cap has reached about $2 trillion, while the performance of altcoins has been lackluster. Looking ahead, the growth of stablecoins may bring hope for market recovery. At the end of the article, Stacy Muur also expresses her unique views on the 2025 crypto market, believing that the crypto market is evolving from the 'Wild West' to a more regulated alternative stock market. Web3 native users are willing to take high risks and engage in speculative trading. New entrants will adopt more robust risk management, focusing on long-term value, while some narratives may be marginalized.
The Rise of Bitcoin
Once upon a time, a $100,000 Bitcoin price was considered a pipe dream.
Now, this viewpoint has undergone a dramatic change. Bitcoin's current market capitalization is approximately $2 trillion—remarkable. If Bitcoin were seen as a publicly listed company, it would become the sixth most valuable company in the world.
Despite Bitcoin attracting widespread attention, its growth potential remains substantial:
BTC's market cap accounts for only 11% of MAG 7 (Apple, Nvidia, Microsoft, Amazon, Google's parent company Alphabet, Meta, and Tesla) total market cap.
It represents less than 3% of the total market cap of the US stock market and about 1.5% of the global stock market's total market cap.
Its market value is only 5% of the total US public debt and less than 0.7% of the total global (public + private) debt.
The total amount of funds in US money market funds is three times the market cap of Bitcoin.
Bitcoin's market value is only about 15% of the total global foreign exchange reserve assets. If central banks globally invest 5% of their gold reserves into Bitcoin, it would bring over $150 billion in purchasing power to Bitcoin—equivalent to three times the net inflow of IBIT this year.
The current global household net worth has reached an all-time high of over $160 trillion, which is $40 trillion higher than the pre-pandemic peak. This growth is primarily driven by rising home prices and stock market prosperity. In comparison, this number is 80 times Bitcoin's current market cap.
In a world where the Federal Reserve and other central banks promote currency depreciation of 5-7% each year, investors need to pursue an annual return of 10-15% to offset future purchasing power losses.
You need to know:
If currency depreciates by 5% per year, its actual value will halve in 14 years.
If the depreciation rate is 7%, this process will shorten to 10 years.
This is precisely why Bitcoin and other high-growth sectors are receiving much attention.
The bubble of altcoin season
Despite Bitcoin hitting new historical highs this year, 2024 is not friendly for most altcoins.
$ETH failed to break through its historical high.
$SOL, although it set a new high, increased by only a few dollars more than its previous peak, making this performance seem insignificant compared to its market cap and network activity growth.
$ARB performed strongly at the beginning of the year, but its performance gradually declined as the year-end approached.
There are many similar examples. Just look at the performance data of 90% of the altcoins in your portfolio.
Why is this the case?
First, Bitcoin's dominance is a key factor. BTC has performed exceptionally strong this year, driven by ETF inflows and Trump-related factors, with its price rising over 130% since the beginning of the year, reaching the highest level of dominance in three years.
Secondly, there is a phenomenon of market differentiation.
Market differentiation this year is a new feature of the crypto market. In previous cycles, asset prices typically fluctuated in sync. When BTC rose by 1%, ETH usually rose by 2%, and altcoins increased by 3%, forming a predictable pattern. However, this cycle is markedly different.
Despite a few assets performing exceptionally well, more assets are in a state of loss. Bitcoin's rise has not led to a comprehensive uptick in the prices of other assets, and the 'altcoin season' many looked forward to has not materialized.
Finally, Meme coins and AI agents also play an important role.
The crypto market oscillates between 'this is a Ponzi scheme' and 'this technology will change the world'. As of 2024, the narrative of 'scam' has taken the dominant position.
In the collective imagination of the public, the crypto market oscillates between 'a unified global financial system of future technology' and 'the biggest scam in human history' every two years.
Why does this narrative seem to alternate between two extremes and occur every two years?
The super cycle of Meme coins and market sentiment
The super cycle of Meme coins further reinforces the perception that the crypto market is a 'Ponzi scheme'. Many people are beginning to question whether the fundamentals of the crypto market truly matter, even viewing it as a 'casino on Mars'. These concerns are not without merit.
In this context, I would like to add a note.
When Memes are referred to as the best-performing asset of the year, people often only focus on those that have already established significant market value and successfully built communities, the 'mainstream Memes' (such as DOGE, SHIB). However, 95% of Memes quickly lose value after launch, which is often overlooked. Yet, even so, people still 'want to believe'.
This belief has prompted many funds that previously invested in altcoins to shift toward Memecoins—few profit while most fail to succeed. As a result, capital inflow is mainly concentrated between Bitcoin (institutional funds) and Memecoins (high-risk investments), while most altcoins are overlooked.
Delphi believes that 2025 will be a year of technological transformation driven by markets, and these technologies will 'change the world'.
However, I am not so optimistic about this. In 2024, a large number of KOLs (key opinion leaders) focusing on Memecoins will emerge. When I tried to create a folder on Telegram containing channels with 'real value' (you can find it here), I found that almost all channels were discussing 'ape calls' (i.e., high-risk short-term investment advice). This is the essence of the attention economy, and these narratives profoundly influence market trends.
What are the upcoming trends?
Growth of stablecoins and credit expansion
A major challenge currently facing the market is the oversupply of tokens. Driven by private investments and public token issuances, a massive influx of new assets has occurred. For instance, over 4 million tokens have launched on Solana's pump.fun platform alone in 2024. However, in contrast, the total market cap of the crypto market has only increased threefold compared to the last cycle, whereas in 2017 and 2020 it grew by 18 times and 10 times, respectively.
Two critical missing factors in the market—stablecoin growth and credit expansion—are reemerging. With declining interest rates and an improving regulatory environment, speculative behavior is expected to become active again, alleviating the current market imbalance. The central role of stablecoins in trading and collateral will be crucial for market recovery.
Institutional capital inflow
Until last year, institutional investors remained cautious about crypto assets due to regulatory uncertainty. However, with the SEC barely approving spot Bitcoin ETFs, this situation began to change, paving the way for future institutional capital inflow.
Institutional investors generally tend to choose familiar investment fields. While a few institutions may dabble in Memecoins, they are more likely to focus on assets with more fundamental support, such as ETH/SOL, DeFi, or infrastructure.
Delphi predicts that in the coming year, the market may experience a 'full rebound' similar to previous cycles. Unlike past cycles, this time the market will pay more attention to fundamentally driven projects. For example, OG DeFi projects (original decentralized finance projects) with a proven track record may become the focus; infrastructure assets (such as L1 protocols) may also shine again. Additionally, RWA (Real World Assets) or emerging fields (such as artificial intelligence and DePIN) may also become hotspots.
Of course, not all tokens will achieve triple-digit gains as in the past, but the presence of Memes will become part of the market. This may mark a new starting point, a broad crypto rebound driven by the overall market rise.
Note: Most institutional traders typically rely on options hedging strategies. Therefore, if a 'full rebound' occurs, the assets most likely to attract institutional interest will be those with options trading—currently mainly traded on Deribit and possibly the Aevo platform.
Argument about Solana
@Solana demonstrated the strong resilience of the blockchain ecosystem. After experiencing a 96% market cap drop due to the FTX collapse, Solana welcomed a remarkable recovery in 2024.
Here are the key performance highlights:
Developer momentum: By hosting hackathons and distributing airdrops (such as the Jito airdrop), Solana has successfully reignited interest among developers and users. This increase in participation not only drives innovation but also creates a virtuous cycle of technical development and user adoption.
Market leadership: In the trends of the crypto market in 2024, Solana is leading in areas from Memes to AI applications. Notably, its Real Economic Value (REV, a comprehensive measure of transaction fees and MEV) exceeds Ethereum by over 200%, demonstrating strong market vitality.
Future outlook: Solana is expected to challenge Ethereum's dominance in scalability and user experience. Compared to decentralized Layer-2 solutions, Solana offers a seamless user experience and a highly centralized ecosystem, giving it a significant competitive advantage.
Stacy's final perspective
The current market conditions may remind one of 2017-2018, when Bitcoin hit a historic high of $20,000 on New Year's Eve and then began to decline in early 2018. However, I believe it is inappropriate to compare the crypto market of 2018 with that of 2025. The two exist in completely different market environments—the once chaotic 'Wild West' is rapidly evolving into a more regulated alternative stock market.
We need to recognize that the scope of the crypto market far exceeds the discussions on Crypto Twitter (CT) and the X platform. For those not active on these platforms, their understanding and perception of the market may be completely different.
Looking ahead to 2025, I believe the crypto market will diverge into two main directions:
Web3 native users: This group is deeply engaged in the crypto market, familiar with its unique operating methods, and willing to take high risks to participate in speculative trading involving Memes, AI agents, and presale projects. These behaviors evoke memories of the early 'Wild West' era of the crypto market.
Ordinary investors: Including institutional investors and retail investors, they typically adopt a more robust risk management approach and tend to favor fundamental-based investment strategies. They view the crypto market as an alternative to the traditional stock market, focusing on long-term value rather than short-term speculation.
So, which areas might become marginalized? Early DeFi projects, RWA (Real World Assets), and DePIN (Decentralized Physical Infrastructure Networks) protocols that fail to establish a leading position in their fields or in the blockchain ecosystem may gradually lose market attention. This is just my opinion.
PS: This article summarizes the core viewpoints from @Delphi_Digital's 2025 market outlook. If you want a comprehensive understanding of Delphi's detailed predictions for 2025 and beyond, I highly recommend reading their original research report.
