In the last month of 2024, the entire cryptocurrency market experienced a large-scale correction. Many people must have been liquidated and completely left the table. However, I believe that the partners in our community have gained a lot in the past 2024. Throughout 2024, we bought a lot of projects with good fundamentals in the early stage, such as YGG, ONDO, ORCA, OLAS, etc., and also seized several sector cycle rotations, abided by the red line of transactions, and did not touch high-multiple contracts. Obviously, these have made us quite profitable, and the principal of many partners has also ushered in a large-scale growth.
There has always been a saying in investment: those who believe in long-termism will achieve great success. This saying also applies to the cryptocurrency circle. Long-termism does not mean slow. Finding high-quality long-term projects with greater returns is the core goal of our community. In the coming 2025, we will still be the winners.
Regarding the market outlook for 2025, I think there are two logics that may become the medium-term main line next year: one is the US compliance concept led by Trump, and there are three main benefiting sectors derived from it: Bitcoin, RWA and Defi fields; the other is AI applications, but the field of AI applications covers a wide range, and the concept projects are mixed. Many of them are actually just dressed in the guise of AI, relying on a huge amount of unlocked tokens to make money, so you must open your eyes and choose carefully. The following is a summary of some macro views of the two main logics mentioned above for your reference.
1. Trump’s American Compliance Concept
In the second half of 2024, the biggest positive for the cryptocurrency circle is that Trump won the election. When Trump was running for president, he made a series of cryptocurrency-friendly promises, such as using Bitcoin as a strategic reserve for the United States and making the United States the leader in cryptocurrency. The price of BTC also climbed from $70,000 to more than $100,000 due to Trump's victory in the election, bringing about a small bull market. With Trump taking office in January 2025, assuming that he will fulfill his campaign promises, there is no doubt that 2025 will create a Bitcoin bull market, and it will be more intense than previous cycles.
Not only Bitcoin, but also US compliance projects related to Trump have made huge profits. The US compliance concepts related to Trump are mainly in the fields of RWA and Defi. An obvious signal is that the Trump family has personally invested in related fields.
In the second half of this year, World Liberty Financial (WLFI), which is closely related to the Trump family, has received unprecedented attention. WLFI is a DeFi project supported by Trump and his family (including his eldest son Donald Trump Jr., third son Eric Trump, and youngest son Barron Trump).
According to the official WLFI profile, Trump himself serves as the chief cryptocurrency advocate, while his sons Eric Trump, Donald Trump Jr., and Barron Trump serve as Web3 ambassadors to help promote the platform and attract mainstream users. The platform mainly provides lending services to users by investing in cryptocurrencies, and is called "the future of crypto DeFi" by the Trump family.
WLFI recently disclosed its holdings, especially in December, with cumulative expenditures approaching US$45 million, including ETH, cbBTC, LINK, AAVE, ENA, ONDO, etc., and the total holding value has exceeded US$84.8 million.
It is obvious that the tokens configured by WLFI include stablecoins (USDT), mortgage lending, RWA, oracles, and packaged Bitcoin and other projects, basically covering all categories of DeFi on the chain.
From a strategic perspective, WLFI prefers to invest in projects with clear business models and stable actual returns. For example, AAVE, LINK, ENA, ONDO, etc. have clear product positioning, a large number of ecological users and actual profit models. Therefore, this type of Defi project with fundamentals and stable income is obviously the focus of the 2025 layout.
Three years ago, the cryptocurrency industry tokenized less than $2 billion of real-world assets (RWAs); today, the market size has reached $13.7 billion. RWA has achieved such significant growth primarily because of its clear advantages: it provides instant settlement, far lower costs than traditional securitization, and around-the-clock liquidity, while bringing transparency and accessibility to virtually all asset classes .
BlackRock CEO Larry Fink has transformed from a former Bitcoin skeptic to a staunch supporter of RWAs, saying that "security tokenization will become the next generation of the market." These words from the head of the world's largest asset management company are of great significance. Wall Street is just beginning to realize this, which means that a large amount of institutional funds may soon pour into the field of tokenized RWAs. By 2025, the tokenized RWA market is expected to reach $50 billion and is likely to grow exponentially from then on, so the ecology of the RWA and Defi fields should be considered and held in 2025.
2. Concept of AI application fields
When it comes to AI, it is currently a hot commodity in the U.S. stock market, especially Nvidia, which is even considered by Morgan Stanley as the "preferred stock" for next year. TSMC's stock price hit a record high yesterday, setting its best performance since 1999. In addition, on the 24th, Musk's generative artificial intelligence company xAI announced the completion of a $6 billion Series C financing. Investment institutions, including A16Z, BlackRock, Fidelity, Morgan Stanley, Sequoia Capital, and even chip giants Nvidia and AMD participated in this round of investment. At the end of 2024, the capital market has set off another AI boom, so in 2025, the AI field will not be absent, and it may even be the protagonist of the bull market.
However, as mentioned earlier, in the field of cryptocurrency, 90% of AI projects have no application. The only source of income for many AI projects is to harvest retail investors by unlocking a large number of tokens in the later stage. For investment in AI projects, we must follow two principles: one is that the project has an external source of income, and the other is that there is actual market application demand. Based on these two principles, we can avoid 99% of the empty AI projects. Previously, in the core investment research community, I shared with you the selected AI projects, which are based on the above two principles. From the depth of each callback, we can quickly get a rebound.
In addition, there are many sub-projects in the AI field. You can start in this order of priority: GPU hardware>Big data model>Sub-field>AI generative application Dapp>AI public chain>AI Meme. Relevant tokens will be announced in the investment research community.
Finally, let’s talk about the current market situation. According to Deflama data, the net capital inflow of the Bitcoin ecosystem in the past month was +84.61%, and the net capital inflow in the past week was +23.76%. On Sunday, there was a certain net inflow of -1.43%. There are signs of capital outflow recently. Bitcoin is expected to maintain a volatile market in the short term.
The conclusion is that the copycat market will enter a garbage period, mainly because the next period is Christmas, New Year and the handover of the White House. Due to concerns and wait-and-see sentiment about Trump's future policies, the market is likely to enter a relatively garbage period. Everyone should be patient with the market at this stage, and see you next year!
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