2024 Crypto Market Review and 2025 Outlook

Recently, PANews held an online interview on the theme of "The Future of Bitcoin and Macroeconomic Trends," inviting Old Bai, a partner at ABCDE Investment Research, Suji Yan, the founder of Mask Network, Ming Dao, the founder of dForce, and Jeffrey Hu, the head of investment research at HashKey Capital, to discuss the future development trends of the crypto market.

2024 Market Review

2024 is a critical year for the crypto market. Events such as the Bitcoin halving, the approval of the Bitcoin ETF in the United States, and Trump's victory are driving the market up, with Bitcoin surpassing $100,000. More institutions, companies, and even countries are beginning to participate in the encryption field.

Lao Bai believes that the emergence of GOAT is the most shocking, as it overturns the understanding of the AI track. Smart contracts may have been inherently designed for AI agents, and the first citizens of the blockchain should be AI agents rather than humans.

Suji Yan stated that the direct involvement of the Trump family in DeFi projects is unexpected, and this combination of politics and encryption has come earlier and more intensely than anticipated.

Mingdao pointed out that the mainstream financial market in the United States has undergone a fundamental change in attitude towards encryption assets, and many teams are starting to return to the United States, with the entire industry moving towards mainstream.

Retail Participation After Bitcoin Breaks $100,000

Regarding the view that retail investors find it difficult to participate after Bitcoin breaks $100,000, Lao Bai believes it depends on how "participation" is defined. If one expects hundredfold or thousandfold returns, it is indeed difficult, but as an investment and financial management tool, it remains one of the best choices.

Suji Yan emphasized that as the scale increases, it is almost impossible to outperform Bitcoin in terms of both liquidity and returns at the same time. However, opportunities still exist for investors who truly understand the industry.

Mingdao suggests that retail investors consider allocating 50% to Bitcoin and the other 50% to low market cap secondary market projects or primary market projects. The economic model and liquidity of Bitcoin have reached a new level, and it may potentially break through a market value of several trillion dollars in the future.

Jeffrey Hu pointed out that retail investors should choose the appropriate way to participate and find a balance between risk and return. They can consider strategies like dollar-cost averaging or moderate use of leverage.

Institutional Investment Strategy

Mingdao Analysis: Currently, multiple listed companies have followed the convertible bond model of MicroStrategy. This type of convertible bond trading actually involves trading the volatility between MicroStrategy's stock and Bitcoin, which somewhat diverts the volatility business from centralized exchanges.

Lao Bai expects that similar models based on Ethereum or even Solana may emerge in the next 2-3 years. MicroStrategy has entered the Nasdaq 100, providing a channel for institutions and retail investors to indirectly hold Bitcoin.

Suji Yan pointed out that due to regulatory reasons, many non-US countries restrict the purchase of US Bitcoin ETFs, which may give rise to local versions of micro-strategies. Large tech companies may accumulate public chain tokens like Ethereum, similar to the logic of hoarding graphics cards back in the day.

The Liquidity of Bitcoin and the Essence of Decentralization

Jeffrey Hu believes that the centralization of Bitcoin holdings is not contradictory to its degree of decentralization. The inclusiveness of Bitcoin mainly manifests in self-custody and transaction verification. The concentration of large institutions' holdings may affect price volatility, but it does not impact the core value of the Bitcoin network.

Mingdao stated that the large-scale purchases by institutions have actually enhanced the accessibility of Bitcoin. ETFs and MicroStrategy stocks can be seen as packaged tokens of Bitcoin, allowing more people to participate in the market. It is expected that institutions will stop increasing their holdings at 7-8%, as excessive concentration will affect the decentralized nature of Bitcoin.

Lao Bai pointed out that the current market structure has undergone significant changes. The trading volume of contracts has far surpassed that of spot, and the discovery of spot prices relies more on the futures market.

Suji Yan believes that in the long run, Bitcoin is likely to achieve true inclusivity like gold. Although short-term price fluctuations are not closely related to decentralization, long-term development will heavily depend on its level of decentralization and the proportion of public holdings.

The Current Status and Future of the Bitcoin Ecosystem

Jeffrey Hu believes that the Bitcoin ecosystem itself is not necessarily Bitcoin, as many projects will issue their own tokens. The income from BTC-Fi mainly comes from staking, trading fees, and lending, but its security and sustainability still need to be verified.

Mingdao pointed out that the concept of "Bitcoin Layer 2" is somewhat contrived. The so-called Bitcoin Layer 2 is essentially just a bridge, and its security may not even be as good as that of centralized exchanges. There is indeed a demand for BTC-Fi, but the risks are significant.

Lao Bai believes that Bitcoin Layer 2 is currently in a semi-falsifiable state and may need to wait for BitVM 2. For BTC-Fi, it is recommended to explore cooperation models between on-chain projects and traditional financial institutions.

Suji Yan pointed out that the Bitcoin ecosystem should focus on areas that are particularly important and require absolute neutrality, such as infrastructure for free speech. If BTC-Fi can maintain stable returns, it may become a multi-billion dollar sector.

Bitcoin During Trump's Tenure

Jeffrey Hu stated that by 2025, we may see Bitcoin become a national strategic reserve, with more countries setting up special zones for experimentation, and the scope of ETF issuance may expand.

Mingdao pointed out that after Trump took office, the Republican Party simultaneously controlled both houses of Congress, which is conducive to the passage of bills. It is expected that the probability of passing cryptocurrency-friendly legislation during his term is very high.

Suji Yan believes that the attributes of Bitcoin and crypto punks align more closely with Republican ideals. The Republican policy stance may be more favorable to the development of encryption, but risks such as stricter nationality checks must also be considered.

2025 Prediction

Mingdao is relatively optimistic about Ethereum, believing that it may break through historical highs in the future. The bull-bear conversion may not happen until the second quarter or later, due to reasons including the implementation of Trump’s policies and favorable regulations for smart contract platforms.

Suji Yan predicts that several important structural changes may occur in 2025: traditional financial institutions will become more deeply involved in the crypto market, large tech companies will incorporate cryptocurrency into their balance sheets, the Layer 2 ecosystem may experience explosive growth, and the integration of DeFi with traditional finance will accelerate.

He suggests that entrepreneurs should seize opportunities, and ordinary investors should not be influenced by short-term fluctuations and be forced out of the market. Overall, the market is expected to perform well in the long term, but the way in which the positive news materializes may differ from expectations.