Original source: Delphi Digital
Original text organized by: Stacy Muur, crypto researcher
Original text translated by: ShenChao TechFlow
Introduction
As the year-end approaches, various studies and predictions are coming in. @Delphi_Digital recently released (Market Outlook 2025), which delves into the analysis of the current market situation and outlook for future trends, covering a range of topics including Bitcoin price trends, major trends, and risk factors.
Given the length of the full text, complete reading requires a significant amount of time. ShenChao TechFlow hereby compiles the core viewpoints of Stacy Muur regarding (Market Outlook 2025).
This article divides Delphi Digital's report into three main parts: the rise of Bitcoin, the bubble of the altcoin season, and the trends of future development. Currently, Bitcoin's market value has reached approximately $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 crypto market in 2025, 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, while newcomers will adopt prudent risk management, focusing on long-term value, with some narratives possibly marginalized.
The Rise of Bitcoin
Once upon a time, a Bitcoin price of $100,000 was considered fanciful.
And now, this viewpoint has undergone a dramatic change. The current market capitalization of Bitcoin is approximately $2 trillion—remarkable. If Bitcoin were regarded as a publicly traded company, it would become the sixth most valuable company in the world.
Despite Bitcoin attracting widespread attention, its growth potential remains enormous:
· The market capitalization of BTC accounts for only 11% of the total market capitalization of MAG7 (Apple, Nvidia, Microsoft, Amazon, Google’s parent company Alphabet, Meta, and Tesla).
· It accounts for less than 3% of the total market capitalization of the U.S. stock market and about 1.5% of the total global stock market capitalization.
· Its market value is only 5% of the total U.S. public debt and less than 0.7% of the total global (public + private) debt.
· The total amount of funds in U.S. money market funds is three times the market value of Bitcoin.
· The market value of Bitcoin is only about 15% of the total global foreign exchange reserve assets. If global central banks invest 5% of their gold reserves in Bitcoin, it would bring over $150 billion in purchasing power to Bitcoin—equivalent to three times the net inflow of IBIT this year.
· Current global household net worth has reached a historic high, exceeding $160 trillion, which is $40 trillion higher than the pre-pandemic peak. This growth is primarily driven by rising property prices and a booming stock market. In comparison, this figure is 80 times the current market value of Bitcoin.
In a world where the Federal Reserve and other central banks push for a 5-7% annual depreciation of currency, investors need to pursue a 10-15% annual return to offset future purchasing power losses.
What you need to know:
· If the 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 industries are receiving significant attention.
The Bubble of the Altcoin Season
Although Bitcoin has set one historic high after another this year, 2024 is not friendly for most altcoins.
· $ETH failed to break through its historical high.
· $SOL, while reaching new highs, only increased a few dollars beyond its previous peak, rendering this performance insignificant compared to its market value and network activity growth.
· $ARB performed strongly at the beginning of the year but has gradually declined as the year-end approaches.
There are many similar examples. Just take a look at the performance data of the 90% altcoins in your portfolio.
Why is this the case?
First, the dominance of Bitcoin is a key factor. BTC has performed exceptionally well this year, driven by ETF inflows and factors related to Trump, with its price up over 130% year-to-date, reaching the highest dominance level in three years.
Secondly, there is the phenomenon of market divergence.
This year's market divergence is a new characteristic of the crypto market. In previous cycles, asset prices usually fluctuated in sync. When BTC rose by 1%, ETH typically increased by 2%, and altcoins by 3%, forming a predictable pattern. However, this cycle is very different.
Despite a few assets performing exceptionally well, many more are in a state of loss. The rise of Bitcoin has not driven up the prices of other assets comprehensively, and the 'altcoin season' that many anticipated has not materialized as expected.
Finally, meme coins and AI agents also play important roles in this.
The crypto market constantly oscillates between 'this is a Ponzi scheme' and 'this technology will change the world.' In 2024, the narrative of 'scam' dominates.
In the collective imagination of the public, the crypto market oscillates between 'a global financial system unified by future technology' and 'the biggest scam in human history' every two years.
Why does this narrative seem to oscillate 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 impression that the crypto market is a 'Ponzi scheme.' Many begin to question whether the fundamentals of the crypto market really matter, even viewing it as a 'casino on Mars.' These concerns are not without reason.
In this context, I would like to add a note.
When memes are referred to as the best-performing assets of the year, people typically focus only on those that have significant market capitalization and have successfully built communities, the 'mainstream memes' (such as DOGE, SHIB). However, 95% of memes lose value quickly after launch, a fact often overlooked. Yet even so, people are still 'willing to believe.'
This belief has driven many funds that previously invested in altcoins to shift towards Memecoins—few profit, but most fail. As a result, capital inflows are primarily 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-driven market transformation, with technologies that will 'change the world.'
But I am not so optimistic about this personally. In 2024, a large number of KOLs (key opinion leaders) focusing on Memecoins are emerging. When I tried to create a folder on Telegram that includes channels discussing 'truly valuable' assets (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?
The Growth of Stablecoins and Credit Expansion
A major challenge facing the current market is the oversupply of tokens. Fueled by private investments and public token offerings, a massive influx of new assets has occurred. For instance, over 4 million tokens were launched on Solana's pump.fun platform alone in 2024. However, in contrast, the total market capitalization of the crypto market has grown only threefold compared to the last cycle, while it grew 18 times and 10 times in 2017 and 2020, respectively.
The two key factors missing from the market—growth of stablecoins and credit expansion—are re-emerging. With declining interest rates and an improved regulatory environment, speculative behavior is expected to revive, alleviating the current market imbalance. The core role of stablecoins in trading and collateral will be crucial for market recovery.
Institutional Capital Inflows
Until last year, institutional investors remained cautious about crypto assets due to regulatory uncertainty. However, with the SEC's reluctant approval of spot Bitcoin ETFs, this situation began to change, paving the way for future institutional capital inflows.
Institutional investors typically prefer to choose familiar investment areas. Although a few institutions may dabble in Memecoins, they are more likely to focus on assets with fundamental support, such as ETH/SOL, DeFi, or infrastructure.
Delphi predicts that the market may experience a 'full rebound' similar to previous cycles in the coming year. Unlike before, this time the market will pay more attention to fundamentally driven projects. For example, OG DeFi projects (original decentralized finance projects) with proven market records could become the focus; infrastructure assets (such as L1 protocols) may also shine again. In addition, RWA (real-world assets) or emerging fields (such as AI and DePIN) may also become hotspots.
Of course, not all tokens will achieve triple-digit gains as in the past, but the existence 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 usually 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 Aevo platforms.
Arguments about Solana
@Solana showcases the strong resilience of the blockchain ecosystem. After experiencing a 96% drop in market capitalization due to the FTX collapse, Solana saw a remarkable recovery in 2024.
Here are its key performance highlights:
· Developer Momentum: By hosting hackathons and distributing airdrops (such as the Jito airdrop), Solana has successfully rekindled 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 both meme and AI application fields. 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 believed to have the potential to challenge Ethereum's dominance in terms of 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 advantage in competition.
Stacy's Final View
The current market conditions may remind one of 2017-2018 when Bitcoin reached a historic high of $20,000 on New Year's Eve, only to start declining in early 2018. However, I believe it is inappropriate to compare the crypto market of 2018 with that of 2025. The two are 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 discussion circles of Crypto Twitter (CT) and X platform. For those who are 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, participating in speculative trades involving memes, AI agents, and presale projects. These behaviors evoke memories of the early 'Wild West' era of the crypto market.
· General Investors: Including institutional and retail investors, they usually adopt more robust risk management approaches and tend to focus on fundamental-based investment strategies. They view the crypto market as an alternative to traditional stock markets, concentrating on long-term value rather than short-term speculation.
So, which areas might be marginalized? Early DeFi projects, RWA (real-world assets), and DePIN (decentralized IoT) protocols that have failed to establish a leading position in their fields or blockchain ecosystem may gradually lose market attention. This is just my point of view.
PS: This article summarizes the core viewpoints from @Delphi_Digital's 2025 market outlook. If you want to fully understand Delphi's detailed predictions for 2025 and beyond, I highly recommend reading their original research report.
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