Compiled by: Yuliya, PANews
Recently, PANews conducted an online interview on Twitter Space with the theme of " Year-end Special Space: Bitcoin's Future and Macro Trend Outlook ". This interview invited Lao Bai, the investment research partner of ABCDE, Suji Yan, the founder of Mask Network, Ming Dao, the founder of dForce, and Jeffrey Hu, the investment research director of HashKey Capital, to discuss the future development trend of the crypto market.
This Space focuses on major events in the crypto market in 2024, including the approval of the Bitcoin ETF, the arrival of the halving cycle, and the impact of key events such as Trump's victory on the market. The guests analyzed the underlying logic behind these events from their respective professional fields and put forward unique insights into the market trends in 2025.
Guest Introduction
Walter White:
As an investment research partner of ABCDE, we are currently focusing on two directions: the primary market and the secondary market. In the primary market, we continue to focus on project investment research, especially AI-related projects. In fact, we started to lay out the AI field a year ago and have previously published research reports on AI+Crypto.
In the secondary market, we mainly focus on new DeFi, compliant DeFi and AI agent related projects. The primary and secondary markets do overlap, especially in the field of AI, where we focus on various projects from tools to agents to platforms. We originally planned to write an AI+Crypto research report at the end of the year, but the sudden rise of the AI agent track disrupted the original plan, which also reflects the rapid changes in the development of the industry.
Suji Yan:
As the founder of Mask Network, we also run a fund, Bonfire Union, and are also making strategic donations and non-profit mergers and acquisitions. We are currently focusing on the development of non-financial application areas, including AI applications, social products, and gaming.
I believe that the current cryptocurrency cycle has basically completed the financial scenarios envisioned in the early days. As a participant in this field since 2016, I have observed that more innovative directions need to be explored in the future. We are exploring opportunities in the fields of AI and social through products such as Firefly, and are also conducting M&A investments and integrations, hoping to return to the essence of venture capital and support the development of more early projects.
Ming Dao:
At present, I am mainly focusing on two directions: one is the combination of DeFi and AI agent, and the other is the development of new products. We are particularly concerned about how to introduce DeFi's economic model and liquidity management into the field of AI agent. Although there are many general AI agent frameworks on the market, there are relatively few projects that are deeply integrated with DeFi, which is exactly the direction we are currently focusing on.
Market Review in 2024
PANews: 2024 is a particularly important year for the entire Bitcoin and crypto market. Several key words: Bitcoin halving, US Bitcoin ETF, Trump's victory, etc. These nodes have driven the market up and Bitcoin has exceeded $100,000. At the same time, more institutions, companies and even countries have begun to participate in the crypto field. What is the most impressive thing in 2024? How do you view these changes?
Walter White:
Although Trump's victory and MicroStrategy's move are gratifying, what shocked me the most was the birth of GOAT. This completely overturned our understanding of the AI track.
Previously, the industry generally focused on the direction of "model assetization", "computing power assetization", "data assetization", etc., corresponding to projects such as Bittensor, IO.Net, and Vana. However, these projects give people the feeling that they are forcibly combining AI with encryption, and have not found the real product market fit (PMF).
The emergence of GOAT made me realize that smart contracts may not be designed for humans, but for AI agents. The "Mass Adoption" we have been talking about for seven years may be in the wrong direction - the first citizen of the blockchain should be AI agents, not humans . Just like most transactions on Uniswap are now completed by robots, this may only be the most basic form of AI. In the future, there may be a large number of AI agents (Web2 and Web3) using blockchain technology to complete various functions such as payment and DeFi. This is the real combination of encryption and AI.
Suji Yan:
Looking back at an outlook article I wrote at the end of 2020, I predicted that in the next 4-8 years, we should pay attention to the relationship between politics, geopolitics and Bitcoin, as well as the relationship between non-financial politics and the digital world. Today, four years later, these predictions have all come true.
In 2020, the most optimistic expectation might be that a certain country will support Bitcoin (such as El Salvador). But who would have thought that the US presidential candidate would now propose to turn Bitcoin into a national reserve? Although it will take time to achieve, the direction has been set.
Based on this, I want to make a bolder prediction: in 40-60 years, AI may obtain human rights, and this process will be closely related to Bitcoin . We may even see the birth of the richest man in AI. This may sound exaggerated, but just like four years ago no one dared to imagine that the chairman of the Federal Reserve would respond to the issue of Bitcoin reserves, technological development always exceeds our imagination.
Ming Dao:
I agree with Suji that Trump's crypto policy shift is indeed the most shocking. In the crypto field, only the United States and China have real say. If these two markets do not accept cryptocurrencies, real mass adoption will not be possible.
The Trump family's direct involvement in DeFi projects is completely unexpected, as DeFi requires a deep understanding of cryptocurrencies. This shift may break the four-year halving cycle of Bitcoin . From MicroStrategy's bold issuance of convertible bonds, it can be seen that the attitude of the mainstream financial market in the United States towards crypto assets has changed fundamentally .
Recently, many teams have begun to return to the United States, which shows that the entire industry is moving towards mainstreaming. There has been a lot of progress not only in the executive branch, but also at the legislative level. The combination of politics and encryption has come earlier and more violently than expected, and this trend will only continue to deepen.
Retail investor participation after Bitcoin breaks through $100,000
PANews: There is a popular view that after Bitcoin breaks through $100,000, it will be difficult for retail investors to participate. What do you think of this view? At the same time, the altcoin market this year does not seem to be as enthusiastic as the past bull market. What do you think of this?
Walter White:
Whether it is difficult for retail investors to participate depends mainly on how to define "participation":
- If you expect to get a hundred or a thousand times return and easily cross classes like in the past few rounds of bull and bear markets, it is indeed difficult to achieve after $100,000.
- However, if Bitcoin is viewed as an investment and financial tool similar to US stocks and gold, it is still one of the best choices. Bitcoin's cryptographic protection is more secure than a safe or paper gold, and can be used as an asset passed down to the next generation.
The crypto market may still need to rely on copycats and memes to carry the dream of growing a hundredfold or a thousandfold.
Regarding the market trend, I agree with Mr. Mingdao's view that Trump may break the four-year obvious bull-bear cycle. Although a perpetual bull market may be difficult to achieve, a slow upward trend similar to that after the gold ETF is possible. In this case, regardless of the size of the funds, allocating a certain proportion of Bitcoin and holding it firmly is a strategy worth considering.
Regarding the altcoin market, many people (including me) have not outperformed the returns of full-position Bitcoin this year. This is because:
- The past pattern has been broken
- VC valuations in the primary and secondary markets were overvalued in the last bull market
- Every project with a valuation of billions at the opening is draining market liquidity
The market is undergoing a process of self-healing. In the future, there will still be altcoins and meme coins that carry the dream of high returns, but it may no longer be a "blind buying and you can make money" model. Instead, it may move towards specialization and US stocks. It requires strong investment and research capabilities to obtain returns that exceed Bitcoin.
Suji Yan:
From our experience in primary market funds:
- Even though some funds may be close to or occasionally outperform Bitcoin in terms of yield, they are definitely not as liquid as Bitcoin.
- Any fund that claims a high return multiple has lower liquidity than Bitcoin
- The redemption period ranges from T+N days to a lock-up period of more than 3 years.
We honestly admit that it is impossible to achieve both high returns and high liquidity in the primary market.
This reminds me of an interesting phenomenon circulating in the Chinese Internet investment circle, and there is a similar situation in the US market. From 2008 to now, all VCs investing in the TMT field have finally found that if it is a business field involved in Tencent, directly buying Tencent stocks may actually bring better returns. There are similar cases in the United States, such as Meta (formerly Facebook), which has a market value of more than 100 billion US dollars when it went public to 2 trillion US dollars now. If all VC funds with similar businesses are added together, it may not be as good as directly buying Meta stocks. Facebook's market dominance in the United States is far less than Tencent's influence in China.
A typical case in the market this year is Virtual. This is a project that one of our investors participated in, although we unfortunately invested in a poorly performing competitor at the time. Looking back at Virtual's development history, they had almost no support when they transformed from GameFi, which was very difficult. But for investors at the time, if you have enough knowledge and faith in the project, you can seize this opportunity with a very small position, whether it is $1,000 or $10,000. There is an opportunity to buy tokens early or get certificates before the airdrop.
This reminds me of the case of Nvidia. Before the rise of the AI wave, Nvidia's stock also gave investors, including SoftBank, ample opportunities to build positions. Although SoftBank ultimately failed to hold on, this shows that opportunities always exist.
Bitcoin now has dual attributes: it is an asset, and in the eyes of traditional investors it is similar to a blue-chip technology stock.
I think the key for the average investor is to:
- Be patient and focus on what you really know
- Agree with the project on an ideological level, especially on the concept of decentralization
- Focus on projects that can find a balance between centralization and regulation
- Don’t be confused by the number of projects. Even if there are only ten competitors in a track, you should study each one in depth.
When you see traditional financial giants like BlackRock start to discuss a certain field frequently, you may need to be alert to whether you have missed the best time to enter the market. We must admit that it is almost impossible to outperform Bitcoin in terms of liquidity and returns at the same time when the scale is larger . But this does not mean that the opportunity has disappeared. On the contrary, for investors who truly understand the industry, this market still contains huge opportunities. The key is to be patient and wait for the right time. From our entrepreneurial and investment experience in the past few years, such opportunities will continue to emerge.
Ming Dao:
As an investor who entered the market in 2013, my experience is that I do not recommend 100% allocation to Bitcoin. At that time, I adopted an allocation strategy of 70% Bitcoin and 30% participation in ICO. Looking back over the years, among the 30% investment, except for the Ethereum ICO I participated in in 2014, almost no project can outperform Bitcoin. Bitcoin has increased 1,000 times since 2013, while Ethereum has increased by more than 3,000 times.
An important issue is that many projects have difficulty crossing cycles . From 2013 to now, there may be tens of thousands of projects, but only a few have survived to this day. For retail investors, the key is to consider the size of their own capital. If the funds are relatively small, you can consider allocating 50% to Bitcoin and the other 50% to some low-market-value secondary market projects or primary market projects.
The development of Bitcoin has entered a new stage. The issuance of the entire ETF in the past year has exceeded the issuance of gold ETF in the past 20 years. This means that its economic model and liquidity have reached a new level, and the market value may exceed tens of trillions of dollars in the future. Investors should compare Bitcoin with gold, real estate or stock indexes and maintain a reasonable allocation in their investment portfolios.
PANews: Looking through the screenshots of Yuanbao.com's exchange in 2015, except for Bitcoin, Ethereum and Dogecoin, the top-ranked tokens at that time have basically disappeared. This does show that we need to consider the cyclical issues and allocation ratio issues of the project. Jeffrey Hu, what do you think of the view that it is difficult for retail investors to participate after Bitcoin breaks through 100,000?
Jeffrey Hu:
This question reflects a concern: after Bitcoin breaks through $100,000, will retail investors have fewer opportunities to make profits? Although it is difficult to accurately predict future price trends, historical experience shows that it is extremely difficult for both institutional and individual investors to consistently outperform Bitcoin's returns.
There are always opportunities and ways to participate in the market. The specific investment strategy needs to be determined according to personal trading style and preferences.
- For investors who pursue stability, they can consider adopting a fixed investment strategy, referring to indicators such as HR999;
- For investors with aggressive styles, they can consider using leverage moderately, or investing heavily in a certain altcoin, but they will need to take higher risks.
From the recent market situation, we can observe:
- When Bitcoin rises, altcoins follow;
- When Bitcoin falls back, altcoins tend to fall back to their starting points, but Bitcoin remains relatively stable.
Therefore, we cannot simply assume that it is difficult for retail investors to participate in the market. The key is to choose the right way to participate and find a balance between risk and return.
Institutional investment strategy
PANews: In the process of Bitcoin's rise this year, institutions such as MicroStrategy and BlackRock played an important role. Mr. Mingdao previously published an article detailing MicroStrategy's strategy as a company that "sells Bitcoin volatility" and BlackRock's continuous purchases through ETFs. Will these institutional strategies continue in 2025? Will there be more imitators?
Ming Dao:
At present, more than one institution is following this strategy. Seven or eight mining companies among US listed companies are using similar convertible bond structures, trying to copy the MicroStrategy model. However, MicroStrategy's structure is relatively unique because, in addition to Bitcoin strategy, its software business accounts for a small proportion, making it a more pure Bitcoin volatility company. In contrast, other mining companies such as Marathon, because they also have mining businesses, even if they issue convertible bonds, their correlation with Bitcoin volatility is not as close as that of MicroStrategy.
According to the data, MicroStrategy currently holds about 2% of Bitcoin, with a daily trading volume of 5-6 billion US dollars. If it increases to 10-20 billion US dollars, it will basically be comparable to the mainstream centralized exchanges. This convertible bond transaction is actually trading the volatility between MicroStrategy stocks and Bitcoin , which to some extent diverts the volatility business of centralized exchanges. Although this model may have a ceiling, it should not be a problem to double it at present.
Walter White:
As long as Bitcoin does not experience a major collapse, more companies will inevitably follow MicroStrategy. Some believe that similar models based on Ethereum or even Solana may appear in the next 2-3 years. However, the current consensus of Ethereum is far behind that of Bitcoin. Both the price performance and the on-chain transaction volume recently affected by Solana show that its consensus needs another 2-3 years to be consolidated. If Ethereum can be established as the first smart contract platform or the birthplace of the largest AI agent, related institutions may also appear. It is worth noting that MicroStrategy has entered the Nasdaq 100, which provides institutions and retail investors with a channel to indirectly hold Bitcoin.
Suji Yan:
I met Saylor a few years ago, and he had limited knowledge of cryptocurrencies at the time, but he caught the most critical Bitcoin. The key to MicroStrategy's success is continuous execution and the establishment of a good profit structure, which is different from most crypto projects. It is expected that more small institutions like MicroStrategy will appear in the future, especially in different countries. Due to regulatory reasons, many non-US dollar countries restrict the purchase of US Bitcoin ETFs, which may give rise to local versions of MicroStrategy .
For technology companies, they are unlikely to buy a large amount of Bitcoin because it is difficult to explain the business relevance to shareholders. But they are investing a lot of resources in developing wallets and solutions. For large technology companies, issuing new coins is risky, and they are more likely to build positions in public chain tokens such as Ethereum, similar to the logic of hoarding graphics cards in the past. This trend may begin to emerge next year, but it may eventually encounter setbacks.
Bitcoin Liquidity and Decentralized Nature
PANews: As large institutions and imitators continue to buy and transfer Bitcoin from exchanges, Bitcoin liquidity on centralized exchanges has become scarce. Some believe that this may lead to a rapid surge in prices. Does this trend go against the decentralization and inclusiveness of Bitcoin? As an unstoppable trend, does the industry need to worry about this? Jeffrey Hu:
From my understanding, some concerns may not be necessary, but there are indeed some issues worth paying attention to. First of all, the centralization of Bitcoin holdings is not inconsistent with its degree of decentralization. The inclusiveness of Bitcoin is mainly reflected in autonomous custody and transaction verification, which is different from other networks. Bitcoin runs through full nodes, and users can fully verify each transaction independently. This power distribution mechanism can still protect user interests in extreme cases (such as 51% attacks).
Regarding the issue of withdrawing coins to the chain, I think this is not a big problem. In contrast, if Bitcoin is concentrated in the hands of centralized exchanges or institutions, it is more worrying. Although many people admire MicroStrategy's strategy from a price perspective, when they recommend that users hand over Bitcoin to custodians instead of self-custody, this is a real problem that we need to be vigilant about.
Of course, the concentration of large institutional holdings may indeed affect price fluctuations, which is one of the risks that investors need to pay attention to. However, from the perspective of Bitcoin's decentralization and inclusiveness, this is not the main concern. The core value of the Bitcoin network lies in its ability to verify and keep it autonomously, which will not change due to the concentration of institutional holdings.
Ming Dao:
Regarding the scarcity argument, I think it is more of a meme in the cryptocurrency circle. In fact, there is no problem of insufficient spot supply. Take MicroStrategy as an example. They invested about $10 billion from $90,000 to $100,000, but their large purchases were made through OTC rather than directly on exchanges. Many transactions are completed through off-chain OTC and transferred directly through on-chain wallets, so concerns about market liquidity may be exaggerated.
From the perspective of inclusiveness, the large-scale purchase of Bitcoin by institutions such as BlackRock or MicroStrategy actually enhances the accessibility of Bitcoin . BlackRock's ETF now holds about 1 million Bitcoins, but these are held on behalf of customers, not by institutions themselves. ETFs and MicroStrategy's shares can be regarded as Bitcoin's packaged tokens, allowing more people who cannot directly purchase or manage Bitcoin to participate in the market. MicroStrategy's model can even be regarded as a leveraged Bitcoin packaged token that will not explode.
Regarding the concentration issue, I think it is unlikely that institutions like MicroStrategy will hold too high a proportion. I expect that they may stop increasing their holdings at 7-8% , because excessive concentration will affect the decentralized properties of Bitcoin, and this impact will eventually be reflected in the price. This is a self-regulating process, and institutions will also take this factor into consideration.
Walter White:
I completely agree with Mr. Mingdao's point of view. This kind of institutional participation actually expands the inclusiveness of Bitcoin. The decentralization and anti-manipulation of Bitcoin are mainly guaranteed from the perspective of cryptography. The price fluctuation has little to do with the decentralization of Bitcoin itself.
It is worth noting that the current market structure has changed a lot. Take Hyperliquid as an example. There are billions of dollars of on-chain contract trading volume every day, and the contract trading volume has far exceeded the spot. Recalling the incident on March 12, 2020, BitMEX had to take technical intervention because the excessive liquidity of perpetual contracts affected the spot price. This shows that the discovery of spot prices depends more on the futures market, and the decentralization of spot holders is still well maintained.
Suji Yan:
From an institutional perspective, this cycle is fundamentally different from the previous ones. New-generation institutions such as BlackRock and Hyperliquid have adopted more standardized and transparent operating methods, which is in stark contrast to some problematic operations in the previous cycle. This change has actually improved the stability and resistance to manipulation of the market.
In the long run, Bitcoin is likely to achieve true universal access like gold . Historical data shows that about 40-45% of gold is in the hands of the public in the form of jewelry. Bitcoin, due to its portability and divisibility, may penetrate into the lives of ordinary people in a similar way and become a carrier of gifts and inheritance. Although short-term price fluctuations have little to do with decentralization, from a long-term development perspective of more than ten years, the success of Bitcoin will deeply depend on its degree of decentralization and the proportion of people holding it.
The current status and future of Bitcoin ecology
PANews: With the development of Bitcoin ecology, including this year's popular Layer 2, BTC-Fi, and Inscription, there has not been a particularly large development with the surge in Bitcoin. So, has the concept of Bitcoin ecology been falsified? What is the driving force for its continued development? Who may provide demand and a reasonable source of income for BTC-Fi?
Jeffrey Hu:
This is a good question. Regarding the Bitcoin ecosystem, I have a potentially controversial view: the Bitcoin ecosystem itself is not necessarily Bitcoin. Because many projects will issue their own tokens, which are related to Bitcoin but are essentially independent assets.
This year's market performance clearly shows that the market trends of Bitcoin and these ecological projects are relatively independent. Even when the price of Bitcoin rises, ecological projects do not show a particularly strong trend. This shows that the correlation between Bitcoin ecology and Bitcoin itself may not be as strong as the market expects.
Regarding the sources of income, they can be divided into three main directions:
- Staking income: such as obtaining network security rewards through staking, and obtaining token rewards as a network validator, you can achieve multi-layered income through LST (Liquid Staking Token)
- Transaction fees: They come from Layer 2 or on-chain transaction activities. They depend on the activity of on-chain activities and may become a stable source of income.
- Lending income: Earn income through BTC lending, including lending of BRC20 or inscription assets, and consider risk management and collateral ratio
However, it should be noted that the security and sustainability of these benefits need further verification. Especially in complex financial products, security is always the primary consideration. I am personally optimistic about BTC-Fi's various application combinations on L1 or L2 in the future.
Ming Dao:
The concept of “Bitcoin Layer 2” is a bit forced, and it makes the mistake of Ethereum’s empiricism . As an asset, any platform that can trade Bitcoin can be regarded as its ecosystem - MicroStrategy’s stocks and ETFs can be regarded as its Layer 2.
The so-called Bitcoin Layer 2 is essentially a bridge, and its security may not be as good as centralized exchanges such as Coinbase/Binance. From the perspective of financial functions, there is no essential difference from Ethereum. WBTC is actually the earliest BTC Layer 2.
The demand for BTC-Fi does exist, which is equivalent to a Bitcoin profit strategy (such as Pendle mining and Babylon earning points), but there are great risks involved. Some teams use Bitcoin to do interest rate arbitrage, which is actually a black box. What if the DEX is hacked? What if it is rigged? It may lead to a loss of the underlying Bitcoin.
The current mainstream BTC yields a 5-7% yield, which is attractive in the short term, but I am skeptical about whether it can be sustained. After the EigenLayer airdrop, the yield of Ethereum LSD is basically the same as the staking yield. So after the TGE of projects such as Babylon, the yield may drop to 1-2 points, because it is unsustainable to maintain a TVL of 5-6 billion US dollars in the long term with a 5-7% yield.
Walter White:
Bitcoin Layer 2 is currently in a semi-falsified state. The development momentum in EVM is not ideal, and we may need to wait for BitVM 2, which may take another 1-2 years . I am more optimistic about the exploration of native Bitcoin Layer 2 (such as Lightning Network, RGB++, etc.). From a technical point of view, Bitcoin has always had the dream of electronic cash, which is also the original intention of Satoshi Nakamoto. In the field of payment, the performance of state channels must be higher than any PoW or PoS.
As for BTC-Fi, I think it has just started, and I am looking forward to the launch of Solv and Babylon. If it can provide safe and stable returns, even if it is only 2-3 points of currency-based returns, it will attract some big players to participate. It is recommended to explore the cooperation model between on-chain projects and traditional financial institutions, and generate interest through on-chain methods to pay the interest expenses of traditional financial products.
Suji Yan:
I think we need to distinguish three concepts: Bitcoin ecology, BTC-Fi, and Bitcoin Layer 2. Bitcoin ecology is the largest category, covering all Bitcoin-related projects.
Bitcoin Layer 2 is a relatively niche track. Building any virtual machine or cross-chain bridge on Bitcoin may not be as good as innovating on Ethereum.
From the perspective of entrepreneurs, I have observed an interesting phenomenon: on other public chains such as Solana or Ethereum, entrepreneurs are generally much younger, mostly in their 20s. Entrepreneurs in the Bitcoin ecosystem tend to be more mature, which is both an advantage and a disadvantage. Entrepreneurs in the Bitcoin ecosystem usually need to operate in a non-profit form, which requires a small team to persist for a long time. Although this model is difficult to make a profit quickly, it can gain more community support and even obtain donation support that exceeds traditional VC investment.
I think the Bitcoin ecosystem should focus on areas that are particularly important and require absolute neutrality . For example, entertainment content is relatively unimportant, and you can develop games or entertainment applications on any platform. But infrastructure such as freedom of speech is very important, and it is related to the foundation of society and the country. This scenario is more suitable for development in the Bitcoin ecosystem.
Take the Nostr project as an example. Although it is currently difficult to develop, when I communicate with entrepreneurs working on free speech projects on different public chains, I find that entrepreneurs in the Bitcoin ecosystem show stronger faith and persistence. They are willing to stick with it for ten years, even if there is no income. This is in stark contrast to projects on other public chains, which may be more inclined to find business models or turn to other directions.
For BTC-Fi, if it can maintain stable returns, I think it can become a multi-billion dollar track. Although Bitcoin Layer 2 has been falsified many times, entrepreneurs still need to think about how to develop real landing scenarios. My suggestion is that entrepreneurs should either focus on important projects that really need neutrality, or focus on areas with strong certainty such as asset management. If projects like Nostr can find a suitable business model, they are likely to become an important track. The key is to find scenarios that are "important enough to rely on the Bitcoin ecosystem". Once such projects succeed, they will generate huge value both from a business perspective and from a social impact perspective.
Bitcoin During Trump’s Presidency
PANews: Trump will be inaugurated as the US President on January 20, and the market generally believes that this is a major positive. What do you think of the development of Bitcoin and the encryption industry during his next four years in office?
Jeffrey Hu:
At this point in time, it is difficult to determine whether this is actually a positive:
- There may be a difference between the promises made during the election campaign and the policies implemented after taking office.
- It remains to be seen whether the market has fully digested this policy expectation.
Positive changes you may see by 2025:
- Crypto assets such as Bitcoin may become strategic reserves of countries or sovereigns
- More countries and regions may follow suit and set up special zones to make more radical attempts.
- The scope of ETF issuance may be expanded to include spot ETFs for other crypto assets such as Solana and XRP
Ming Dao:
An important background after Trump came to power is that the Republicans control both the Senate and the House, which makes it easier to pass bills. There may be several important plans at the regulatory level, including a clear plan for stablecoins as a substitute for the US dollar, and a new regulatory framework related to ICOs and fundraising.
It is worth noting that Trump appointed David Sacks (who holds a large amount of Solana and is involved in multiple DeFi project investments) as the White House AI advisor, which is a positive signal. I think the market has not fully digested the policy changes after Trump took office, and it is expected that there is a high probability that a cryptocurrency-friendly bill will be passed during his term.
Suji Yan:
During 2020-2021, the market was highly optimistic about the Democratic Party. At that time, SBF donated a large amount to the Democratic Party and even invited politicians such as Clinton to participate in activities. However, the outbreak of the SBF incident ultimately dealt a heavy blow to the industry. This lesson tells us that we cannot rely too much on a single political force.
In fact, the attributes of Bitcoin and cypherpunks are more consistent with the Republican Party's philosophy (small government, limited government power). Republican policy positions may be more conducive to the development of cryptocurrencies, and this ideological fit may bring more lasting support.
Judging from market expectations, currently only 20%-30% of people believe that Trump will advance relevant policies within 100 days of taking office. I think this expectation may be too conservative and underestimates the possibility of policy advancement.
However, we should also pay attention to the risks. This may not be very favorable for entrepreneurs with non-US backgrounds. The number and frequency of foreign projects launched by Coinbase have been declining, and stricter nationality reviews may appear in the future.
As for investment strategies, individual investors can participate more aggressively, but institutional investors need to be more cautious. The implementation of policies needs to be gradual and not forceful. We should look at favorable policies rationally and pay attention to the actual implementation methods and pace of policies.
2025 Prediction
PANews: Many institutions predict that Q1 may be a big bull market. I would like to ask you how you view the market trend in 2025? Will there be a bull-bear transition in 2025?
Ming Dao:
Although price trends are difficult to predict, from the current market, Bitcoin's performance has exceeded expectations. I am more optimistic about Ethereum and believe that it may break through its historical high in the future. As for Solana, considering that it has risen many times in the past year, there is still a lot of unlocking to be released.
Regarding the bull-bear transition, I think it is less likely to happen in the first quarter, and it may happen in the second quarter or later. The reasons are:
- In the first 100 days after Trump took office, many of his promises may be gradually implemented
- Policy bills have a greater impact on smart contract platforms, especially the regulation of stablecoins and token issuance
- If the regulation is further clarified, it will be a major boon to smart contract platforms such as ETH and Solana
- Large US companies are developing Layer 2 at an accelerated pace, and this trend is likely to continue
Suji Yan:
The market in 2021 has left us with a profound lesson. When Coinbase went public in 2021, the market generally believed that this marked the beginning of a perpetual bull market. But later, due to China's mining policy on May 19, the market suffered a heavy blow. However, interestingly, the market did not end there. On the contrary, driven by DeFi innovation and new funds, including the influence of factors such as Dogecoin and Tesla, it soon created a new high and formed a typical double-top structure.
Regarding the policy impact, I think we need to look at it in different levels:
- In the short term, the market tends to over-interpret policy expectations, just like the current ETF market.
- In the medium term, policy implementation is a gradual process that requires multiple adjustments and market feedback.
- In the long run, when the policy framework is finally established, the market reaction will be extremely violent.
I have observed several important structural changes that may occur by 2025:
- Traditional financial institutions will become more involved in the crypto market, not just in Bitcoin, but in a wider range of digital assets
- Big tech companies may add cryptocurrencies to their balance sheets, a trend that will have ripple effects once it starts
- The Layer 2 ecosystem may see explosive growth, especially in terms of scalability and user experience
- The integration of DeFi and traditional finance will accelerate, creating new business models and investment opportunities
For example, many people now believe that Microsoft will not buy Bitcoin, but it is entirely possible that in Q1 or Q2 of next year, for example, when the AI industry encounters a bottleneck, Microsoft's cloud department suddenly announces the purchase of $1 billion in Ethereum/SOL. This kind of thing is entirely possible.
So my suggestion is:
- For entrepreneurs, you must seize this opportunity
- For ordinary investors, don’t be affected by short-term fluctuations and get washed out.
- Overall, the market is positive in the long run, but the way the positive effects are realized may be different from expectations.
