Written by: Ling Zi'ang (Tony Ling), pen name Long Ye.
Abstract of this article:
As of the writing of this article, Q4 2024, this marks the early stage of a new round of bull market in the crypto space.
BTC's value in the macro field can be likened to bonds and stocks in financial history, serving as the 'fuel' for a new round of human technological development; in the mid-level, it is the currency and index of the digital world that humanity will inevitably enter; on a micro level, it represents the landing of new legal regulations and compliance in token issuance, thus attracting global private investment demand.
This may be the last 'grassroots' cycle belonging to the crypto industry, and it is also the last mega cycle where BTC has a significant beta increase. This means that after this cycle, BTC's beta will significantly decrease, but it does not mean that the broader token issuance market will lack opportunities for a hundredfold alpha.
The peak of this round of BTC bull market will occur in Q4 2025, with a high point of 160,000 to 220,000 USD. Before this, excluding the already happened 'first wave', there are still two significant mid-bull market trends.
The current time is like 1999 in the internet era, meaning that after the bull market peaks in the next 12-18 months, the crypto industry will face a long winter, similar to the internet bubble burst of 2000-2001. Of course, this is also an opportunity for the industry to reshuffle. I look forward to it.
When I feel the bull market is coming, it is the time of the highest output for my articles.
About four years ago, at the beginning of the last cycle's bull market, I wrote ('How Should We Invest in Digital Currency in 2021?'). When we talk about the entire digital currency industry, it is unavoidable to first mention the value and price of BTC.
If you already believe in the value of Bitcoin, feel free to jump directly to Part Five, regarding expectations for Bitcoin's future price trends.
One
The value of BTC, from an industrial perspective, can be discussed on three levels: macro, mid, and micro. From a macro perspective, BTC represents the risk aversion expectations of the entire human financial market and is the third type of 'financial medium' that can be capitalized after bonds and stocks in human history; from a mid-level perspective, BTC is the best 'index' for the 'digital era' or Web3 world that humanity will inevitably enter; from a micro perspective, BTC is gradually improving in terms of compliance and regulation, which will attract a large amount of 'traditional old money' in mainstream countries like the U.S. In third-world countries, it will siphon off local private investment demand that cannot be satisfied.
On a macro level, if we regard Bitcoin as a groundbreaking asset in human financial history, then the most important thing is to understand the changes in financial history. ('How Should We Invest in Digital Currency in 2021? Part One of Four') discusses the position of digital currency from a technological historical perspective. Each technological revolution has produced important financial infrastructures and entirely new financial 'mediators'.
Behind finance are changes in circumstances. Standing here today, it may be the most confusing moment in global political and economic situations in the past thirty years, and also the moment when the traditional financial order is most fragile and likely to undergo major reshuffling. I can no longer trace back to whether there were financial venues like the London Stock Exchange or New York Stock Exchange during famous financial bubbles of hundreds of years ago, like the 'Dutch Tulip'. Perhaps Dutch vendors were accustomed to offline trading, just speculating without establishing rules and order, causing the bubble to ultimately burst. However, throughout history, every technological innovation remembered by humanity has been accompanied by a transformation in financial paradigms, which is an inevitable product of changing circumstances. These are mutually influential and enhance each other, ultimately writing a vivid chapter in human history. I cannot predict if the Second Industrial Revolution would have started in Britain and ultimately flourished in the U.S. without the transformative social changes brought by the Civil War, which encouraged technological innovation to enter industries.
At the same time, I have a more radical view: when everyone talks about economic stagnation and how to find feasible business models—why does business itself need a business model? Has the term 'business model' already lost its meaning?
Here are more of my thoughts, which are somewhat complex, and I will not elaborate further here. I will expand on this as the most important part in another future article (The Four Parts of Crypto Capital Theory: An Essay on the Philosophy of Business and Investment). (Related reading: The Four Parts of Crypto Capital Theory Part One: Token Issuance, a New Paradigm for Financing)
Excerpt: Discussing business models in today's business and financial environment refers to the common path developed by mainstream business entities, primarily companies, over the past century: expanding market size, increasing employee numbers, and finally going public, using profit * PE to price stocks. This path may not hold in the future.
In today's 'social capital' (or 'private economy'), equity enterprises may account for 95% of the value, and listed companies that use stocks as value anchors account for most of the capital value. However, in the future, this value may exist more in 'businesses' (why can't limited partnerships work) and 'tokens' (foundations).
Two
Let me spend some more time discussing the mid-level perspective of the BTC industry. At the end of the book I wrote in 2021, the first of eight predictions mentioned that BTC is unbeatable. Refer to the postscript of my electronic book (Unlocking New Codes - From Blockchain to Digital Currency) Part Four.
From the perspective of the technology industry, Web3 is an inevitable trend for the future, with Bitcoin as the core asset of the entire Web3 world, or in economic terms, it should be called 'currency'. In ancient times, gold was the most common 'currency' in barter, and after the development of modern nation-states and financial systems, national currency became the most common 'currency'. In the future, with the arrival of the digital age, a new 'currency' will be needed for all life in the virtual space of the metaverse.
Therefore, it is meaningless for some people to cling to 'why are you investing in a token'. Blockchain and crypto need a '+' just like when someone asks you what industry you are investing in and you say, 'I want to invest in equity enterprises' or 'I want to invest in an internet company'. Web3, as a special industry, crypto as a new market tool and financial medium, is gradually integrating with other industries—blockchain + AI = DeAI, blockchain + finance = DeFi, blockchain + entertainment/art = NFT + metaverse, blockchain + research = DeSci, blockchain + physical infrastructure = DePin...
The trend is clear, but what does it have to do with us? Or how can we gain wealth appreciation after seeing the trend clearly?
Now let's turn our attention to AI.
The main themes of the business society over the years have been one visible and one hidden. AI is undoubtedly a hot topic that capital has always pursued and can be put on display. Crypto is in the shadows, a place where various legends and myths of sudden wealth gather, but it is also limited, making it an unattainable place for many.
The potential of the AI market is indeed widely regarded as trillion-level, especially in the fields of generative AI, AI chips, and related infrastructure. However, for investors, everyone believes AI is a sunrise industry and is willing to invest their money in it, but what should they invest in? Are there now AI ETF index funds that comprehensively cover the AI ecosystem to effectively track industry growth?
No. In 2024, Nvidia's stock price rose nearly threefold, while most AI-themed ETFs performed modestly during the same period. Looking further back, Nvidia's stock performance did not correlate positively with the overall growth of the AI sector—chip companies cannot always be represented by only Nvidia.
Comparison of mainstream AI ETF and Nvidia stock performance in 2024
AI is the main theme, but will there be a product that can anchor the future value development of the AI industry, such that the entire industry's value increase can correspondingly uplift the value of this ETF? Just like how the Dow Jones Index/S&P 500 ETF represents the development of Web0 (equity enterprises), the Nasdaq ETF represents Web1, and investment opportunities in Web2 have not appeared in index form. The most suitable index for the value of the Web3 world, or the entire future digital world of humanity, is BTC.
Why is the value of the Web3 world necessarily measured in BTC?
Because, since the birth of computers and the internet, humanity is destined to spend more and more time in the virtual world rather than the real world. In the future, we will wear VR/AR glasses and can sit at home to visit Yellowstone National Park, feel the palaces of the Tang Dynasty in China, or enter a virtual conference room to face-to-face have coffee with friends on the other side of the globe... The line between reality and the virtual will become increasingly blurred. This is what the future digital world, or the metaverse, will look like. And there, if you want to decorate your virtual space or have a digital person dance for you, you will need to pay—this cannot be in dollars, RMB, and certainly not in physical assets. The only thing that comes to mind as the most suitable and universally accepted in the digital world is Bitcoin.
I remember in the movie (The Xinhai Revolution), Mr. Sun Yat-sen held a 10 yuan bond: 'Once the revolution succeeds, this bond can be exchanged for 100 yuan.'
Three
Back to the present.
We live in economically stable countries where fiat currency can be trusted. However, this does not mean that the entire world’s financial system is as stable as the society we live in: the first action of Argentina's newly elected president was to announce the cancellation of Argentina's fiat currency system—after all, no one in Argentina trusts the government's issued currency, so why bother? In Turkey, the inflation rate reached +127% in 2023, correspondingly, the ownership of digital currencies among its citizens reached as high as 52%. Especially in third-world countries, in recent years, as information technology infrastructure gradually improved, traditional fiat mobile payment and digital currency payment methods have developed almost simultaneously. In contrast, just like in around 2010, when China's information technology flourished, skipping the 1.0 era of POS machines and credit card payments and directly entering the 2.0 era of mobile payments, third-world countries have recently begun to develop, with the 3.0 era of digital currency payments directly replacing the 2.0 era of mobile payment methods, making digital currency payments a common scene in daily transactions.
This brings up an interesting debate: Bitcoin has no controller, and if it cannot fulfill the macro-regulatory functions of fiat currency as a currency or 'currency', then in reality, the dollar is also issued by enterprises, so the so-called government macro-regulation must yield to the interests of the groups behind it; capital power is the driving force behind the world's operations. If we must say that fiat currency has macro-regulation, then the interest groups in Bitcoin mining are the biggest regulators.
Changes in inflation rates of major economies in recent years
Changes in Argentina's inflation rate in recent years
From a micro perspective, with the acceleration of capital flow, technology and financial cycles are becoming shorter. In an environment with weaker economic anti-fragility, traditional equity markets require a lock-up period of 8-10 years. This long-term investment characteristic causes many to worry about liquidity issues. However, crypto assets provide the possibility for early monetization, which not only attracts more retail capital but also offers early investors more flexible exit expectations.
In traditional equity markets, angel or early investors typically seek partial exits through equity transfers or company buybacks about five years after the establishment of the company, when it has entered a relatively mature development stage but is some time away from an IPO or acquisition (usually 8-10 years). This model can effectively alleviate the time cost of investments, but compared to crypto assets, its liquidity is clearly more restricted.
The appeal of the crypto rights model lies in its ability to allow early investors to realize capital return earlier through token issuance or circulation, while attracting a broader market participation. This flexibility may have a profound impact on the structure of traditional equity markets. This aspect can be referenced in ('The Four Parts of Crypto Capital Theory Part Two (Lower): A Battlefield Without Gunpowder - VC or Token Fund?').
On the other hand, the financial markets of most sovereign countries are extremely fragmented and lack liquidity, while the inherent global financial characteristics of crypto have greatly attracted these funds, including those from Korea, Argentina, Russia, etc. Moreover, countries in Southeast Asia, led by Vietnam, have seen their stock market development unable to keep pace with the wealth accumulation of the middle class, causing these emerging classes to directly skip the stage of participating in local financial markets and transition to crypto. Against the backdrop of global digital currency compliance and integration with mainstream financial markets, the demand for investment in private assets in these countries cannot be met by their weak local financial infrastructure—Korea's main board market (KOSPI) and the KOSDAQ market together have over 2,500 listed companies, but 80% have a market value of less than 100 million USD, and daily trading volume is negligible. In contrast, the digital currency market, which absorbs global retail funds, has the most abundant liquidity, making it the best investment target for their participation.
Doge's current market cap and trading volume
Samsung's current market cap and trading volume
Note: From the chart, it can be seen that Doge's current market cap is about 60 billion USD, while Samsung's market cap is about 234 billion USD, which is roughly four times that of Doge. However, Doge's 24h trading volume reached 5.5 billion, which is tens of thousands of times that of Samsung.
In the strategic hub of the global digital currency market—the U.S., 2025 is likely to witness a new transformation in the cryptocurrency legal system. The two most important bills—FIT21 and DAMS—will affect the future fate of the crypto space. These two blockchain bills, regulated by the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission (SEC), fundamentally view token issuance as commodity transactions rather than securities issuance, thus placing them under CFTC management. Considering that these bills are proposed by the Republican Party, and the current SEC chairman Gary Gensler represents the Democratic stance, the bills face considerable resistance. However, if Trump is re-elected and the Republican Party takes the lead, the likelihood of these bills passing significantly increases.
To explain this bill, simply put, issuing tokens is treated as commodity transactions and regulated by the CFTC, thus legalizing it. This can greatly promote the enthusiasm for token issuance financing. Companies can legally and compliantly raise funds through token issuance, attracting more capital into the crypto space. Moreover, with stable channels for long-term compliant development, more people will remain steadfast in this industry after making money. Most importantly, after the U.S. takes the lead in introducing this bill, it will officially open up the global digital currency financial market and blockchain technology market, leading to competition between countries for projects and talents. In the fully globalized and freely flowing crypto space, further developments may occur in the future. If U.S. policies become friendlier, issuing tokens may no longer be a gray industry but a highly regarded financial innovation. Founders residing in currently crypto-friendly countries like Singapore and Switzerland will soon undergo a massive migration.
Four
Looking back to 2016, when the world could count the types of crypto on one hand, and BTC was like a game currency, directly deposited in exchanges with RMB to 'top up and purchase', our generation of crypto natives had hopes for the future. (Refer to the end of the article in 'How Should We Invest in Digital Currency in 2021? Part One of Four')
That is also my dream.
Originally, my plan was to achieve these goals in 8-10 years.
But we only used four years.
It was at that time that I had a new dream—since Bitcoin has been slowly accepted as a monetary asset by mainstream society, other digital currencies, or tokens, should also serve as digital goods in addition to digital equity, creating utility in the future digital world for humanity to better transition into the digital realm.
Oh right, this thing later got a new name—NFT.
'Digital goods of the metaverse era' is my definition of the ultimate future of NFTs, and it is the most important link in realizing 'internet era goods' through Web3 and digitalization, leading to mass adoption.
This is why I firmly decided to build the NFT industry at the beginning of 2021. In my series of articles 'The Path to the Future—Five Parts of Web3,' I described my vision for it.
Wu
Of course, the most intuitive attraction, or rather, the reason why more people are willing to read my articles, naturally lies in the rise of BTC.
It's time to get to the point. I must mention my predictions for BTC's market: The peak of this round will occur at the end of 2025, with a reasonable range between 160,000 and 220,000 USD, and after that, in 2026, I suggest everyone stay out of the market and rest.
In my paper written on January 1, 2019 ('Bitcoin Valuation Model Under the Equilibrium of the Miner Market—Based on Derivative Pricing Theory'), I mentioned the bottom of the four-year cycle from 2018 to 2021.
And the bottom of the four-year cycle I mentioned for 2022-2025.
From the current perspective, the entire crypto space is at a critical crossroads. Today's digital currency industry is like the internet industry at the turn of the century; within the next 1-2 years, a bubble burst is not far away. With the passing of crypto-friendly laws like the U.S. FIT21, the compliance regulation of assets like crypto rights will be completed, and a large amount of traditional old money that previously lacked understanding of crypto or even scorned it will begin to accept BTC and allocate 1%-10% of their portfolios. However, after that, if blockchain and digital currencies cannot gradually integrate with traditional industries, truly ushering in the 'blockchain + industry' transformation, just as the internet industry did with consumption, social interaction, and media, I really do not see any new funds entering this industry or any reason for astonishing growth opportunities to appear again. The DeFi of 2020, NFTs and the metaverse of 2021, these were all the right directions and spurred a wave of innovation back then. Throughout 2024, BTC continuously set new highs, but the blockchain industry as a whole had no significant innovations to discuss, and the market was filled with more memes and Layer 1, 2, and 3, without any new 'business concept innovations'. Moreover, given the atmosphere of the entire industry that I can see in 2025, I hold a pessimistic view on the emergence of milestone 'business concept innovations'.
As the tide rises, now with a flood of capital, small rafts abound, and hundreds of boats are competing, with rowers racing to see who can paddle faster, even mocking the heavy, machine-powered iron ships. But when the waves recede, all wooden boats will run aground, and only those with sustained machine power can sail out of the harbor and into the open sea.
Moreover, making an interesting prediction, a sign that the crypto bubble has peaked will be when Buffett, the world's biggest Bitcoin opponent, begins to change his tune and even participate in the industry. The phased victory of a revolution often marks the moment when the greatest crises are lurking.
One can compare the current crypto space to the internet era of 1999. After experiencing a rapid surge towards normalization, the digital currency industry may face severe adjustments due to significant bubbles starting at the end of 2025. Looking back in history, the internet industry saw the IPO of Netscape in December 1995, followed by Yahoo's IPO in April 1996, which sparked market excitement. On March 10, 2000, the Nasdaq index reached a historical peak of 5408.6 points. However, the bubble quickly burst, and by 2001, the market entered a winter period. Although the broader winter lasted until 2004, the true low point was in October 2002 when the Nasdaq index nearly fell below 1000 points, marking the industry's lowest point from a financial perspective.
In 2020, MicroStrategy successfully drove up its stock value through purchasing BTC, achieving a significantly meaningful stock-coin linkage effect for the first time. By February 2021, Tesla announced its acquisition of Bitcoin, marking a landmark event for giants officially entering the field. These historical moments inevitably remind one of the '1995-1996' of the blockchain industry—when the internet wave first emerged.
Looking ahead, I believe that by the end of 2025, Bitcoin's price may reach a long-term peak, but by early 2027, it may touch new lows. Once the FIT21 bill is passed, it may trigger a wave of public token issuance, reminiscent of the unprecedented grandeur of the '.com' era.
If the threshold for token financing is reduced to almost zero, even ordinary people can issue their tokens as easily as high school students learn to create a website, then the limited capital in the market will be rapidly diluted by the influx of various tokens. In such an environment, the last wave of the 'frenzied bull market' belonging to token issuers may not last more than three months. Subsequently, due to market supply-demand imbalance and capital exhaustion, the industry will inevitably face a comprehensive collapse.
However, before that, in the next 12 months, we still have the potential for BTC to nearly double its beta increase, and for ordinary people, due to the global liquidity gathering, there are countless early coins with opportunities for 'hundreds or thousands of times' in a very short time—why not participate?
Looking back at the internet industry, often criticized by many media as a 'bubble'. Today, the Nasdaq index has broken through the 20,000 point barrier. Looking back at the year 2000, what seemed like a peak is now just a small hill. Even if you entered the internet industry in 2000 and persisted to this day, it would still be one of the best choices.
As for BTC, it’s just one small hill after another.
It has been 3202 days since I bought my first BTC on March 7, 2016.
I still remember the price displayed at the moment I clicked the mouse, which was 2807 RMB, just under 400 USD.
Many people have asked me, how high do you think BTC can ultimately rise?
This question is meaningless. The price of gold has been continuously hitting new highs in recent days and years.
A meaningful question is, how high can BTC's price rise before a certain point in time?
Let's wait and see.
The best is yet to come.
December 12, 2024
