The on-chain economy ETF is coming. What other factors could become catalysts for the bull market in 2025?

Source: Talking Li, Talking Outside

In the past few days, WeChat has pushed a report on the 2024 public account creation review in the background. I also took a look at the traffic performance of Talking Li, Talking Outside over the past year, with a total reading count of 489,000 for the year. As shown in the figure below.

Looking back, in the past year, we published over 200 articles through Talking Li, Talking Outside. Compared to the daily investment of 4-6 hours on this matter (writing articles), the total reading count of less than 500,000 for the year may not be as high as the traffic of a casual short article or tweet from some KOLs.

However, I personally am not too concerned about traffic. Traffic is just a byproduct of doing this, and it's enough to maintain our original intention. As I wrote in Talking Li, Talking Outside's 2023 e-book "Advancing Blockchain Thinking": My goal is simple, I hope to maintain a state of learning even when I have free time, and effectively organize and output some of my daily learning summaries and personal experiences, while also helping those interested in this field, even if only one person reads it, helping one is enough.

Moreover, I shared in the group some time ago about the adjustment direction of Talking Li, Talking Outside this year. This year is mainly about "doing subtraction," not only in the self-media aspect but also continuing to "do subtraction" in trading. Therefore, I won't get too caught up in the traffic issues of self-media; just go with the flow.

Additionally, I quite like the phrase pushed in the public account review report: Creation is a lonely persistence. In short, don't ask where it comes from, don't ask where it goes, just follow your heart and go forward.

In yesterday's (January 15) article, we mainly mentioned Soneium, Xiaohongshu, Ripple (XRP), and the CPI issue. That is, after the CPI was officially announced last night (Beijing time), the data of 2.9 met market expectations, which seemed to alleviate some of the inflation concerns in the U.S. Therefore, after the data was released, the U.S. stock market and the crypto market experienced a strong rally, with Bitcoin breaking the $100,000 mark again, and XRP rising above $3 for the first time in history.

As of the writing of this article, Bitcoin's price remains around $99,000, as shown in the figure below.

As for XRP, we still maintain the basic viewpoint from yesterday's article that this coin still has good long-term prospects, but we also need to pay attention to short-term price risks. According to the latest news from Watcher Guru, the SEC has re-appealed the XRP lawsuit today, requesting that XRP be classified as a security. As shown in the figure below.

Having supplemented some content from yesterday's article, let's continue to share a few other things today:

1. Onchain Economy ETF

There are reports that VanEck (a fund company managing over $118 billion in assets) has applied for a new exchange-traded fund (ETF) called Onchain Economy ETF. It is said that the goal of this ETF is to target crypto infrastructure rather than crypto tokens, thus avoiding direct investment in cryptocurrencies while still maintaining exposure to the digital asset market it comprises. This also means that institutions are encountering actively managed cryptocurrency funds for the first time.

According to a document from the U.S. Securities and Exchange Commission on January 15, the Onchain Economy ETF seeks to allocate at least 80% of its assets to Digital Transformation Companies and Digital Asset Instruments. As shown in the figure below.

So far, institutions can mainly invest in three types of ETFs in the crypto field: BTC ETF, ETH ETF, and Index ETF (such as Bitwise 10 Crypto Index Fund). However, these three types are not managed by a group of people choosing to buy the corresponding assets, while VanEck's Onchain Economy ETF will become the first actively managed ETF targeting the crypto field.

In simple terms, the Onchain Economy ETF will be actively managed by some analysts from VanEck, but their investment scope will not be limited to BTC and ETH, but will be able to invest in a broader range of assets, even crypto-related infrastructure (such as companies).

2. What other factors could serve as catalysts for a bull market?

- Trump's Inauguration

This seems to be something many people are looking forward to. We mentioned this in the previous article (January 15). It is said that Trump is expected to sign an executive order after taking office next week to abolish cryptocurrency banks and eliminate the bank accounting policy that allows banks holding cryptocurrencies to classify digital assets as liabilities.

If the Trump administration can indeed introduce some favorable policies for cryptocurrencies, this could open the green light for further prosperity in the crypto market. Additionally, if staking is allowed under regulation this year, it would also be a good boost for the currently sluggish ETH, and DeFi would see further revival and development.

- FTX Repayment Plan

Regarding the compensation issue of FTX, we have introduced it several times in previous articles of Talking Li, Talking Outside. Interested friends can directly search for historical articles for a review. According to news from a few days ago, the FTX repayment plan reportedly has a preliminary allocation timetable, with creditors claiming less than $50,000 expected to receive about $1.2 billion in compensation, with the first repayment expected to start in February 2025.

If this process goes smoothly, it is not ruled out that some of the funds will return to the crypto market, injecting new liquidity into the market and generating some positive sentiment.

- More Crypto ETF Approvals

Currently, the most anticipated or favored ETFs might be the SOL ETF and XRP ETF. However, as we mentioned in the previous article, it is still unknown who will become the third officially approved ETF after BTC and ETH. But from the existing comprehensive news, it seems to be just a matter of time.

Once new ETFs continue to be approved, it will certainly further boost investor confidence and enhance market liquidity. Moreover, the approval of more altcoin ETFs could also catalyze new altcoin season opportunities from a certain perspective.

- Continued Institutional Participation

In addition to the ETF aspect (paying close attention to ETF-related fund inflows/outflows), one of the institutional participation directions we are optimistic about this year is the RWA field.

Of course, it also includes changes in Bitcoin holdings by institutions like MicroStrategy. It can be anticipated that as institutions become more deeply involved in the crypto field, the volatility in this area may become closer to that of the stock market (U.S. stock market). However, this does not mean that volatility will not be large, as institutions can make money regardless of market fluctuations. For example, when the market is declining, they can hedge risks through options.

But one fundamental aspect will not change: as more institutions choose to include BTC in their asset allocation, this will further solidify Bitcoin's position, which is beneficial for the overall stability of the crypto market in the long run.

In addition to the aspects we mentioned above, in terms of price trends (weekly), Bitcoin's growth trajectory still looks good, continuing to move within an upward channel. If optimistic, there is still about 12% upward space unless it breaks the current channel trend. As shown in the figure below.

Additionally, based on past annual return performance, if history can repeat itself, Bitcoin's overall performance this month should also be good. The Spring Festival in 2021, 2022, and 2024 is in early February, while the Spring Festival in 2023 is at the end of January, and the corresponding overall performance of Bitcoin has been quite good. As shown in the figure below.

However, historical data is only a reference. Whether history can truly repeat itself will be known by the end of the month. Nevertheless, one of the biggest fundamental catalysts this year remains macro factors, especially the policies of the Federal Reserve.

Finally, I need to remind again that even though we have reviewed the above catalysts and still remain optimistic about the overall market performance opportunities ahead, we must maintain respect for the market, as no one knows what new black swan events may occur next. Only by managing our positions and mindset well, staying focused, and going with the flow can we maintain long-term gains in a volatile market.