It’s that time of the year again, I have published my thoughts and musings on the blockchain sector in the annual crypto market thesis for 2025. Full document published here: https://jamesbachini.com/resources/CryptoMarketThesis2025.pdf
The crypto market in 2025 is poised at a critical juncture, following a historic year in 2024 that saw Bitcoin surpass $100,000 for the first time. Institutional adoption, such as BlackRock's Bitcoin ETF, and Bitcoin's halving event contributed to this milestone, cementing its role as the dominant digital asset. Regulatory shifts following Donald Trump’s election, marked by the retirement of SEC head Gary Gensler, have created a more favourable environment for the industry. Speculation about sovereign wealth funds allocating capital to Bitcoin and discussions about a potential US Bitcoin treasury fund further underscore the growing global adoption of digital assets. As 2025 begins, optimism persists, with expectations of the bull market continuing. However, the market’s cyclical nature suggests a potential psychological shift from greed to fear later in the year. This sentiment could result in significant selling pressure as participants anticipate a downturn aligned with the established four-year cycle. While the "supercycle" thesis contradicts this cyclical pattern, it remains speculative and unproven. Smart contract platforms are positioned as a strong contenders for 2025, with the upcoming Ethereum Pectra update aiming to enhance protocol efficiency, user experience, and scalability. Despite taking a back seat to Bitcoin in 2024, Ethereum’s potential as a "shared world computer" gives it the capacity to outperform long-term. Emerging technologies like GameFi, DeFi, and NFTs could play a key role in driving market interest, though no dominant narrative has yet emerged for the year. While technological innovation in blockchain continues, the integration of trends like AI remains limited. Opportunities for blockchain to disrupt traditional sectors are growing, but full-scale usability and adoption are likely years away. In 2025, the focus remains on identifying emerging trends and managing risk in an evolving and highly speculative market environment. Portfolio positioning reflects a cautious approach. Majority of digital assets are allocated to staked Ethereum, complemented by smaller investments in Bitcoin, altcoins, and NFTs. Altcoin investments are focused on short-term, momentum based opportunities rather than long-term fundamentals. The plan is to gradually rebalance to a semi-passive portfolio with a 60/40 crypto to stablecoin ratio.
The chart above is BTC.D, Bitcoin Dominance. This has broken below the support trend line which I hope could be good for altcoins. A failure to make a new high above 60% could be a good sign for the rest of the market which is waiting patiently to play catch up. Social links are below and if you enjoyed this newsletter I would appreciate it if you could share this content
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