Delphi Digital 2025 Market Forecast Summary: Bitcoin's Potential Remains Huge, Stablecoins Will Continue to Grow
The growth of stablecoins may bring hope for market recovery.Original Title: "Delphi's 'The Year Ahead for Markets 2025': Key Insights"
Author: Stacy Muur
Compiled by: Shenchao TechFlow
Introduction
As the year comes to a close, various research and predictions are pouring in. @Delphi_Digital recently released the "2025 Market Outlook," which delves into the analysis of the current market conditions and forecasts future trends, covering a range of topics including Bitcoin price movements, major trends, and risk factors.
Given the length of the full text, which requires a significant amount of time to read, Shenchao TechFlow has compiled an article summarizing the key insights from Stacy Muur regarding the "2025 Market Outlook."
This article divides the Delphi Digital report into three main sections: The Rise of Bitcoin, The Illusion of Altcoin Season, and Trends for Future Development. Currently, Bitcoin's market capitalization 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 shares her unique perspective on the crypto market in 2025, suggesting that the crypto market is evolving from the "Wild West" into 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 strategies, focusing on long-term value, with some narratives potentially being marginalized.
Main Text
The Rise of Bitcoin
Once upon a time, a Bitcoin price of $100,000 was considered a fantasy.
Now, that perspective has changed dramatically. Bitcoin currently has a market capitalization of about $2 trillion—remarkable. If Bitcoin were considered 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:
BTC's market cap accounts for only 11% of the total market cap of MAG7 (Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta, and Tesla).
It represents less than 3% of the total market cap of the U.S. stock market and about 1.5% of the global stock market.
Its market cap 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 that of Bitcoin's market cap.
Bitcoin's market value is only about 15% of the total global foreign exchange reserve assets. If global central banks were to allocate 5% of their gold reserves to Bitcoin, it would bring over $150 billion in purchasing power to Bitcoin—equivalent to three times this year's net inflow of IBIT.
The current global household net worth has reached a historic high of over $160 trillion, which is $40 trillion higher than the pre-pandemic peak. This growth is primarily driven by rising housing prices and a booming stock market. In comparison, this figure is 80 times Bitcoin's current market cap.
In a world where the Federal Reserve and other central banks are driving currency depreciation of 5-7% per year, investors need to pursue annual returns of 10-15% to offset future purchasing power losses.
You need to know:
If currency depreciates by 5% per year, its real 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 sectors are receiving so much attention.
The Illusion of Altcoin Season
Although Bitcoin has set one historical high after another this year, 2024 has not been friendly for most altcoins.
$ETH failed to break its historical high.
$SOL, while reaching new highs, only increased by a few dollars compared to previous peaks, which seems insignificant compared to its market cap and network activity growth.
$ARB performed strongly at the beginning of the year, but its performance gradually declined as the year-end approached.
There are many similar examples. Just look at the performance data of 90% of the altcoins in your portfolio.
Why is this happening?
First, Bitcoin's dominance is a key factor. BTC has performed exceptionally well this year, driven by ETF inflows and factors related to Trump, with its price rising over 130% year-to-date, reaching the highest dominance level in three years.
Secondly, there is market fragmentation.
This year's market fragmentation is a new characteristic of the crypto market. In previous cycles, asset prices typically moved in sync. When BTC rose by 1%, ETH usually rose by 2%, and altcoins would rise by 3%, forming a predictable pattern. However, this cycle is quite different.
Despite a few assets performing exceptionally well, more assets are in a state of loss. Bitcoin's rise has not led to a comprehensive increase in the prices of other assets, and the much-anticipated "altcoin season" has not materialized.
Finally, meme coins and AI agents have also played significant roles.
The crypto market oscillates between "this is a Ponzi scheme" and "this technology will change the world." In 2024, the "scheme" narrative has taken the lead.
In the collective imagination of the public, the crypto market swings between "a global financial system unified by future technology" and "the biggest scam in human history," occurring every two years.
Why does this narrative seem to alternate between these two extremes and happen every two years?
The Supercycle of Meme Coins and Market Sentiment
The supercycle of meme coins further reinforces the impression that the crypto market is a "Ponzi scheme." Many people begin to question whether the fundamentals of the crypto market really matter, even viewing it as a "casino on Mars." These concerns are not unfounded.
In this context, I would like to add a note.
When memes are referred to as the best-performing assets of the year, people usually focus only on those "mainstream memes" (like DOGE and SHIB) that have already established significant market caps and communities. However, 95% of memes quickly lose value after launch, which is often overlooked. Yet, even so, people still "want to believe."
This belief has led many funds that previously invested in altcoins to shift towards memecoins—where a few profit, but most do not succeed. As a result, capital inflows are primarily concentrated between Bitcoin (institutional funds) and memecoins (high-risk investments), while most altcoins are ignored.
Delphi believes that 2025 will be a year of technological transformation in the market, with these technologies set to "change the world."
However, I am not so optimistic about this. In 2024, a large number of KOLs (key opinion leaders) focused on memecoins emerged. When I tried to create a folder on Telegram containing channels with "real value" (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?
Growth of Stablecoins and Credit Expansion
One of the main challenges facing the current market is the oversupply of tokens. Driven by private investments and public token offerings, a large number of new assets have flooded in. For example, over 4 million tokens were launched on Solana's pump.fun platform alone in 2024. However, in contrast, the total market cap of the crypto market has only increased threefold compared to the previous cycle, while it grew 18 times and 10 times in 2017 and 2020, respectively.
Two key factors missing from the market—growth of stablecoins and credit expansion—are re-emerging. With declining interest rates and an improving regulatory environment, speculative behavior is expected to become active again, 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 uncertainties. However, with the SEC's reluctant approval of spot Bitcoin ETFs, this situation is beginning to change, paving the way for future institutional capital inflows.
Institutional investors typically prefer familiar investment areas. While 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 track records may become focal points; infrastructure assets (such as L1 protocols) may also regain prominence. Additionally, RWA (real-world assets) or emerging fields (such as artificial intelligence and DePIN) may also become hotspots.
Of course, not all tokens will achieve triple-digit gains as in the past, but the presence of memes will remain part of the market. This may mark a new starting point, a broad crypto rebound driven by an overall market increase.
Note: Most institutional traders typically 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 the Aevo platform.
Arguments Regarding Solana
@Solana has demonstrated remarkable resilience in the blockchain ecosystem. After experiencing a 96% drop in market cap due to the FTX collapse, Solana has seen 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 increased participation not only drives innovation but also creates a virtuous cycle of technological development and user adoption.
Market Leadership: In the 2024 crypto market trends, Solana is leading in both the meme and AI application sectors. 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 seen as a challenger to Ethereum's dominance in 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 competitive advantage.
Stacy's Final Thoughts
The current market situation may remind one of 2017-2018, when Bitcoin reached a historic high of $20,000 on New Year's Eve, only to decline in early 2018. However, I believe it is inappropriate to compare the 2018 crypto market 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 extends far beyond the discussions on Crypto Twitter (CT) and the X platform. For those not active on these platforms, their understanding and perception of the market may be entirely 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 operations, and willing to take high risks, participating in speculative trading involving memes, AI agents, and presale projects. These behaviors evoke memories of the early "Wild West" era of the crypto market.
Ordinary Investors: Including institutional and retail investors, they typically adopt more prudent risk management approaches and prefer fundamental-based investment strategies. They view the crypto market as an alternative to traditional stock markets, focusing on long-term value rather than short-term speculation.
So, which areas may become marginalized? Early DeFi projects, RWA (real-world assets), and DePIN (decentralized IoT) protocols that fail to establish a leading position in their fields or within the blockchain ecosystem may gradually lose market attention. This is just my perspective.
PS: This article summarizes the key insights from @Delphi_Digital's 2025 Market Outlook. If you want to gain a comprehensive understanding of Delphi's detailed predictions for 2025 and beyond, I highly recommend reading their original research report.
