Original title: (Markets Year Ahead 2025)
Author: Delphi Digital
Compiled by: Felix, PANews
In 2024, cryptocurrencies are at a crossroads: Bitcoin's strong rise contrasts sharply with the overall market's weakness, and only the regulatory shifts by the end of the year make the outlook brighter.
The crypto narrative is being readjusted, and 2025 will usher in a brand new beginning. This article aims to briefly review the market situation this year.
Many crypto enthusiasts believe that with the launch of spot ETF products, the crypto market will rebound to historical highs. But the reality is not entirely so, at least not as many expected.
In the first quarter of this year, with the launch of ETFs, Bitcoin surged over 50%, reaching $73,000. Billions of dollars flowed in directly, and the market no longer had any worries about institutional demand. For about seven months, Bitcoin primarily fluctuated between $60,000 and $70,000.
Unfortunately, most tokens are struggling, with only a few performing well. The initial 'failure' (or lack of liquidity) following the launch of spot ETH liquidity mid-year exacerbated these struggles. Most of the story for 2024 revolves around the gloomy market sentiment and infighting.
However, after the presidential election in November, the crypto industry finally welcomed a glimmer of hope. The changes in market sentiment and risk appetite over the past few weeks also reflect this.
Cycle strategy is on track
At the end of 2022, Delphi Digital outlined the reasons for the bear market bottom and expressed confidence in the upcoming bull market cycle over 15 months ago. In last year's report, it predicted that Bitcoin would break new highs in Q4 2024.
On the macro front, reality has aligned with expectations. So far, Bitcoin halving has not been the main catalyst for the crypto market cycle; rather, it has been the liquidity cycle.
At the end of last year, Delphi Digital listed favorable conditions for Bitcoin to achieve strong performance in the first quarter, one of which was a surge in global liquidity. It also warned that there is a high risk of market correction from the end of Q1 2024 to early Q2 due to signs of weakening liquidity momentum.
So far this year, Bitcoin has risen over 130%, and it has done so without much support from the Federal Reserve. In fact, liquidity from the Fed has been steadily declining over the past 9-10 months.
Optimism returns
2024 is a strange year for the crypto market. On one hand, most mainstream coins have returned to historical highs, while the broader altcoin market has also shown signs of recovery.
However, the crypto community (like Twitter) has been embroiled in infighting for most of this year. The gloomy sentiment of 2024 stands in stark contrast to the positive price movements.
The main reason for the poor market sentiment is, first and foremost, Bitcoin's dominance. Bitcoin has surged 130% since the beginning of the year, reaching a three-year high in dominance.
The second factor is decentralization: some token prices are rising, some are slightly up, but most token prices are falling or moving sideways.
The classic 'road to altcoin season' that many have taken for granted has failed to materialize.
Supply-demand imbalance
As mentioned in many reports over the past year, the crypto market is facing a significant supply-demand imbalance. In short, the demand for cryptocurrencies has not kept pace with the overall supply of cryptocurrencies. The reasons are as follows.
Too many tokens
Aggregators have launched over 10,000 tokens, compared to about 1,500 in 2017, a tenfold increase.
Applications like pump.fun have made token creation simple: over 4 million tokens have been issued since January 2024, with over 50 million tokens entering Solana's Raydium.
Memecoin continues
Will these market dynamics remain unchanged, and will memecoins dominate for another year? Or will the crypto market return to fundamentals?
The reality is more complex, influenced by speculative enthusiasm and ever-changing market trends.
Solana accelerates development
In the last cycle, SOL rose from $1 to $260 in a year. Although the ecosystem is still in its infancy, it has attracted teams like Jito, Drift, and Helium, all of which will become foundational parts of the network.
Solana ultimately rose too high. Following the FTX collapse, the bear market, and doubts about chain stability, SOL fell by 96%.
On Christmas 2022, Bonk airdropped 50% of its supply to the Solana community. SOL was trading at $11, and the outlook was not optimistic. A few days later, SOL fell to a low of $8, ending a brutal year.
Solana has risen from the ashes in 2023. The core team, focusing on serving a loyal user base with Drift Protocol, Jito, and Tensor Foundation, is steadily innovating to drive recovery.
As we enter 2025, there are still some questions:
Is SOL's rise coming to an end?
Will memecoins disappear?
Can Base capture market share?
Will Ethereum make a comeback?
While these concerns are valid, they miss the point. Solana's performance in 2025 will be based on two core beliefs:
Data from Solana indicates that SOL/ETH is being repriced. Lower-level activity shows strong fundamentals, suggesting greater upside potential compared to ETH.
Leadership and culture: Solana's relentless innovation and thriving ecosystem give it a unique advantage in the cryptocurrency space.
2024 can be seen as a turning point for the industry, but no one knows exactly how 2025 will unfold.
