2025 Crypto Assets Market Review and Outlook

In early 2025, the Crypto Assets market experienced significant fluctuations. A shift in political attitudes towards favorable conditions pushed prices up, but after Trump's inauguration, the market saw a "buy the rumor, sell the news" phenomenon. Both the S&P 500 and Bitcoin fell by 15-20%, with small-cap stocks performing even worse.

On a macro level, the market is worried about increasing policy uncertainty and the risk of stagflation. Tariff policies have become the main driving factor of price trends. The establishment of the Department of Government Efficiency (DOGE) has also raised concerns. AI-related stocks and tokens have plummeted significantly, with some declines exceeding 50%.

The digital asset industry faces unique challenges. The Meme coin bubble has burst, and a major exchange has suffered a hacking attack that undermines market confidence. These factors have collectively weighed down market performance.

In the first quarter, the median price of tokens fell by more than 50%. The market is more focused on tokens with solid fundamentals, which have outperformed non-revenue tokens. Although painful, the capital destruction of worthless tokens is healthy.

Historically, Bitcoin has experienced drawdowns of over 20% multiple times. Currently, it has gone through three pullbacks in the long-term upward trend. For long-term investors, enduring volatility is a significant advantage. After a substantial drop, a strong rebound typically occurs.

Multiple sentiment indicators show that market panic is at extreme levels, suggesting that it may have already passed the initial phase of aggressive selling. At the same time, favorable interest rates and liquidity conditions are advantageous for risk assets. The yield on 10-year U.S. Treasuries has decreased, and global liquidity conditions have improved.

The main upward trend in Bitcoin prices occurs during periods of increased liquidity. The current global economy is at a historic moment, which may support another Bitcoin bull market. The crisis of trust in the US dollar highlights the appeal of Bitcoin as a non-sovereign store of value.

Digital assets are starting to show relatively strong signs. Many positive industry developments have been overlooked by market fluctuations, such as favorable policies and improvements in fundamentals. Blockchain companies are generating billions of dollars in revenue, and user activity is at an all-time high.

Despite facing challenges, sentiment indicators suggest that the most aggressive selling point may have passed. In the long run, bullish factors and strong fundamentals are expected to gain attention. As a pioneer of growth assets, Crypto Assets may rebound first.