Author: Kyle, Crypto Researcher
Compiled by: Felix, PANews
Since the current bull market cycle began in 2024, the cycle so far has been: January 10, BTC ETF launch → until Bitcoin reached its historical high, triggering altcoin season, entering a volatile second/third quarter of 2024, with Bitcoin continuing to break through at $50,000 and $60,000, and currently hovering around $90,000.
It is noteworthy that the altcoin season began when BTC reached its peak, with the first round being BTC's advance to $69,000 but failing to break through properly, and the next round being the advance towards $100,000.
The next round of altcoin season is likely to occur when Bitcoin stabilizes at $100,000, hopefully happening in the first quarter of 2025. However, it may replay the story of the second/third quarter of 2024 in the coming months. Here are all the possible scenarios:
Scenario 1: BTC + Altcoins generally rise. A continuous rise throughout 2025, followed by another altcoin season, as BTC continues to rise and all tokens perform well, repeating the situation of the past two months (30-40% probability).
Strategy: Buy the dips on outperforming altcoins.
Scenario 2: BTC rises, but fewer altcoins rise; the 2024 story repeats, fluctuating up and down in the coming months, but more bullish than in 2024 (because BTC is rising); thus, choose well-performing tokens (50-60% probability).
Strategy: Buy the dips on selected altcoins. Avoid high-profile tracks and find the next "get-rich-quick token."
Scenario 3: BTC rises, but altcoins generally fall (20-30% probability).
Strategy: Sell all altcoins. Reduce altcoin investments; if the altcoins held do not rise in the long term, it may be necessary to sell them all.
Scenario 4: BTC falls, and altcoins generally fall. Everything has peaked (10-20% probability).
Due to macro positives, a new BTC ATH breakthrough may not take as long as in 2024. During this hellish summer, the ETF was just launched, and TradFi was still struggling to sell the BTC story to clients. Most importantly, the outside world generally does not believe in Bitcoin's significance.
Now that Trump has won, discussions about strategic Bitcoin reserves are underway. Although the likelihood of establishing strategic Bitcoin reserves is low, Bitcoin's reputation has changed.
The narrative is crucial—indeed, the new regime currently in place has brought new attention to the digital asset space, and now the next U.S. president talks about Bitcoin so frequently that it has become much easier to persuade people to buy Bitcoin.
This regime change is extremely important. Therefore, BTC will continue to maintain a favorable trend in 2025. The situation for altcoins is similar but somewhat different.
Total3 (the total market cap trend of all altcoins) reached a historical high in the first quarter of 2024, then peaked in the fourth quarter of 2024. It more or less follows the same pattern (there is not much difference between Scenario 1 and Scenario 2 above).
The key lies in positioning and timing. Although optimistic about 2025, it is uncertain how long it will take. While the rise in 2025 may come earlier than in 2024, altcoins will still experience significant declines during periods without catalysts.
As long as the cycle has not ended, whether Bitcoin or altcoins, remain bullish. There will not be a repeat of the summer of 2024 in 2025, although there may be periods like now (just a consolidation phase), but prices will still remain at relatively good levels.
On-chain conditions are different; when the tide goes out, on-chain can easily see a 70% drop. It is expected that altcoins have not peaked at this time, as it is unclear how BTC can continue to rise while altcoins "die," nor can we see BTC peaking here.
Conclusion:
- BTC rises, with gains exceeding those of 2024.
- Altcoins are in a rising trend, although there will be declines, but not as severe as in 2024.
Risks
Cycle Top
We are far from the cycle top, but it must be reassessed weekly. The cycle top is not necessarily an "event," but more like a range that gradually approaches over time.
Bitcoin Reserve Plan Risk
With the new presidential term beginning, everyone will be watching Trump's words and actions. While there are positives for Bitcoin, if Trump completely ignores the reserve plan, it would be quite pessimistic. A more likely scenario is that the reserve plan does not happen or is delayed by some events.
In the latter case: as long as it is beneficial for Bitcoin, it is initially a bearish event but ultimately a bullish one.
TLDR: Bullish signal = cycle continues. Bearish signal = plans must be modified. The cycle may continue, but the chances are lower.
Supply Risk
The summer of 2024 experienced a crazy macro environment, with the stock market hitting new highs repeatedly. However, due to supply giants like Gox and Grayscale GBTC repeatedly hitting hard, there were no benefits, only downsides.
Supply risk can never be alleviated. There will always be someone holding a large amount of Bitcoin—such as the UK government, Silk Road, FTX distributions, etc. This is just something you have to keep a close eye on, but if all goes well, these events are good buying opportunities.
Macro Risk
A small rate cut is expected; although not overly optimistic, the fact is that as long as interest rates continue to decline, liquidity will improve. Similarly, bullish signal = cycle continues. Unless there are rate hikes or no cuts, the macro environment should be favorable for digital assets.
A bearish signal would be inflation rising again, and the Fed may have to raise interest rates to curb inflation.
Token Recommendations
1. AI
It has already gone through several waves. The next wave is expected to arrive soon. Buying and holding will not yield good results. Goat, the token that initiated all this, has dropped 60% from its peak and may continue to perform poorly.
Preferred: Application technology / Swarms / Games / Consumer-focused AI
ALCH (game development), Griffain (helps control wallets), Digimon, Ai16z, etc., are all preferred.
2. DeFi
DeFi will continue to be a great narrative; however, it is very difficult to invest in, as few tokens benefit from it, and even if they do, they may not see significant increases.
Frankly, in terms of risk-reward, DeFi is not a top choice.
Preferred: AAVE / ENA / Morpho / Euler / USUAL
Secondary: Stablecoins / Payment-related tokens
3. L1
L1 will make a comeback. The hype is evident. L1 itself is something the market has been ignoring—it is one of the overlooked areas but holds great opportunities (as hype grows 10-fold).
Preferred: SUI / Hype
Secondary: Abstract
4. NFT Tokens and Game Tokens
The NFT token space is worth paying attention to. PENGU is slowly recovering, Azuki has ANIME tokens, Doodles has… whatever it is. It is expected that NFTs will not revive, but their tokens will return. Additionally, it is interesting to dig deep to find interesting games with upcoming tokens.
Preferred: Pengu / Anime (Azuki) / Spellborne / Treeverse
Secondary: Prime / Off the grid (if tokens are launched) / Overworld
- Other Narratives
- Data Tokens: Kaito / Arkm
- Meme: PEPE
- DePIN: PEAQ / HNT
- Ordinals
- Old DeFi: CRV / CVX
2025 Predictions
- DePIN will be implemented by a company in some way, perhaps through acquisition.
- Binance will lose market share as the largest exchange. Not from Hyperliquid, but from Bybit / OKX.
- With new advancements in VR, metaverse tokens will be revitalized.
- ICOs will be great again.
- No altcoin season on the ETH chain will occur.
- Sui will reach double digits (at least $10).
- Ethereum ETF staking will be approved, leading to more yield products for staking other tokens and yield aggregators.
- A major artist will use NFTs and tokens to engage and reward fans.
- Bitcoin will reach $200,000.
- More CEOs/founders of L1 institutions will leave their original companies after seeing the Aptos Labs CEO depart. (PANews note: __On December 20, _Aptos Labs_ co-founder Mo Shaikh resigned as CEO, and co-founder Avery Ching will take over.)
- Base will fail in competition with L1s, and another L1 will take its place. Solana will continue to hold its ground.
Related Reading: 2024 Bitcoin Year-End Review: Price Up 131% Less Than Last Year, TVL Surges 21 Times to Over $6.7 Billion
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