2025 Crypto Market Outlook: 4 Scenarios and 11 Predictions

Since the beginning of 2024, the crypto market has experienced a bull market cycle. From the launch of the Bitcoin ETF on January 10, to Bitcoin reaching an all-time high and driving altcoins up, followed by the volatile market in the second/third quarter, Bitcoin broke through the $50,000 and $60,000 thresholds, and is currently hovering around $90,000.

It is worth noting that the altcoin market often starts when Bitcoin breaks through important levels. The first round was when Bitcoin surged to $69,000, and the second round was when it approached $100,000. The next round of altcoin market activity is expected to occur after Bitcoin stabilizes above $100,000, likely in the first quarter of 2025. However, a repeat of the scenario in the second/third quarter of 2024 is also possible. Here are four possible market scenarios:

Scenario 1: Bitcoin and altcoins rise broadly

In 2025, the overall market will rise, with Bitcoin continuing to climb, driving all tokens to perform well, repeating the market trends of the past two months. (30-40% probability )

Strategy: Select high-quality altcoins and buy on dips.

Scenario 2: Bitcoin rises, some altcoins follow the increase

Replaying the trend of 2024, the next few months will see fluctuations upward, but overall it is more bullish than in 2024. (50-60% probability )

Strategy: Select high-quality altcoins to buy on dips, avoid popular tracks, and look for the next "get-rich-quick coin".

Scenario 3: Bitcoin rises, altcoins generally decline

(20-30% possibility)

Strategy: Reduce or liquidate altcoin positions.

Scenario 4: Bitcoin and Altcoins Decline

The market has peaked and is retreating. (10-20% possibility )

Due to favorable macroeconomic conditions, the time for a new round of Bitcoin reaching a new high may come sooner than 2024. Currently, with Trump's victory, discussions about Bitcoin as a strategic reserve are heating up. Although the actual possibility of establishing such a reserve is low, the public image of Bitcoin has already improved.

The important thing is the change in narrative - the new regime brings attention to digital assets, with the president frequently discussing Bitcoin, making the promotion of Bitcoin easier. Therefore, Bitcoin is expected to maintain its strength in 2025.

The total market capitalization of altcoins reached a new high in the first quarter of 2024, the highest since 2021, and then peaked in the fourth quarter of the cycle. A similar pattern may be repeated in 2025. The key lies in selection and timing. Although there is optimism for 2025, the timing of the rise is difficult to predict. In the absence of catalysts, altcoins may still experience significant declines.

As long as the cycle has not ended, one should remain optimistic about Bitcoin and altcoins. It is unlikely that the dismal market of the summer of 2024 will be repeated in 2025; even if there is a consolidation, prices will remain at a good level.

Conclusion: • The increase in Bitcoin is expected to exceed that of 2024. • Altcoins are generally on the rise, but a pullback may occur.

risk factors

Cycle Top

Currently, we are still far from the cycle peak, but continuous assessment is necessary. The cycle peak is often a gradual process rather than a single event.

Bitcoin Reserve Program

After the new president takes office, the market will closely watch Trump's words and actions. Ignoring the reserve plan completely would be bearish, while it is more likely that the plan will be postponed or shelved. In this case: short-term bearish but long-term bullish.

Supply Risk

Supply pressure is difficult to eliminate. The holding conditions of large players such as the UK government and FTX need to be closely monitored, but if handled properly, it could also become a buying opportunity.

Macro Risk

The expected rate cut is limited. As long as interest rates continue to decline, liquidity will improve, which is beneficial for digital assets. The risk is that inflation may rise again, leading to interest rate hikes.

Token Recommendation

1. AI

After several rounds of increases, a new round is expected to arrive soon.

Preferred: Application Technology/Swarms/Games/Consumer-facing AI

Recommended: ALCH, Griffain, Digimon, Ai16z, etc.

2. DeFi

DeFi is still an important narrative, but investment difficulty is high, and there are few benefiting tokens.

Preferred: AAVE/ENA/Morpho/Euler/USUAL Secondary selection: stablecoins/payment-related tokens

3. L1

L1 may make a comeback, containing huge opportunities.

Preferred: SUI/Hype Secondary selection: Abstract

4. NFT Tokens and Game Tokens

NFT tokens are worth paying attention to, and game tokens also have opportunities.

Preferred: Pengu/Anime/Spellborne/Treeverse Second choice: Prime/Off the grid/Overworld

5. Other Narratives

• Data Token: Kaito/Arkm • Meme:PEPE • DePIN:PEAQ/HNT • Ordinals • Traditional DeFi: CRV/CVX

11 Predictions for 2025

1. A certain company implements DePIN, possibly through acquisition.
2. A certain trading platform's market share surpasses that of a leading exchange.
3. VR advancements drive the revival of metaverse tokens
4. ICO rises again
5. There will not be a large-scale altcoin market on the Ethereum chain.
6. Sui reached a double-digit price of at least 10 dollars ( )
7. Ethereum ETF staking approved, leading to more staking products and yield aggregators.
8. Famous artists use NFTs and tokens to maintain fan engagement.
9. Bitcoin reaches 200,000 US dollars
10. More L1 project executives leave.
11. Base lost in competition with other L1s, Solana maintains its advantage.