Looking ahead to 2025, I make the following top ten predictions:
First, with the arrival of the new president in 2025, the U.S. will not only welcome its first 'cryptocurrency president' but will also see the most pro-cryptocurrency Congress in history. A series of genuine positive developments regarding cryptocurrencies will materialize. The infrastructure of the cryptocurrency industry was significantly damaged in 2022-2023, which will be repaired in 2025, resulting in more robust infrastructure than in 2021.
Second, the Federal Reserve and Powell's hawkish expectation of two rate cuts (a total of 50bp) for 2025 given at the December meeting is overly pessimistic. Once the rate-cutting cycle begins, it will not end easily. I believe the Federal Reserve will cut rates by at least 75bp in 2025, with the possibility of 100bp or even 125bp. Additionally, I believe the Federal Reserve will end the balance sheet reduction in Q1 2025 and maintain it for a while to determine whether to expand the balance sheet.
Third, 2025 will still be a bull market cycle, but there should also be very severe mid-term adjustments in 2025, possibly more than once. The most important reason for the adjustments is the repeated U.S. inflation leading to rising hawkish expectations. 2025 may become the year when the bull market for U.S. stocks and cryptocurrencies ends, specifically depending on the fiscal policy, monetary policy, and tariff evolution after the arrival of the new president. An eternal bull market (in the short term) does not exist.
Fourth, BTC is expected to break through $150,000 at its peak in 2025, and ETH is expected to break through $10,000 at its peak in 2025. 2025 will be a year of significant upward momentum for ETH. The missed increase in ETH in 2024 will be realized in 2025. Considering the absolute level of the Federal Reserve's benchmark interest rate is relatively high, the cryptocurrency bull market in 2025 will have strong structural characteristics. The optimistic structural trends for 2025 mainly include ETH, SEC lifting restrictions on ETH staking, potential ETFs by the SEC, DeFi, AI subfields (high-quality fundamentals, AI agents, AI applications), DePin, RWA, bankruptcy restructuring of high-quality assets, and decentralized science (DeSci), most of which will be driven by relevant events. The rhythm of rotation has a significant impact on returns.
Fifth, U.S. stocks are currently not cheap based on the high growth in 2023 and 2024. Although still in a bull market cycle, the cost-effectiveness is relatively limited, requiring a focus on structural trends.
Sixth, AI has passed the stage of speculative concepts; the beta effect has relatively weakened while the alpha effect has strengthened, requiring the selection of fundamentally strong assets. Due to the lack of training data, the AI application side has become a hotspot. I am optimistic about the development of AI agents in 2025.
Seventh, with the entry of cryptocurrencies into mainstream and the deepening development of AI, 2025 may be the last period for ordinary people to change their fate through cryptocurrencies and AI. After that, the fluctuations of cryptocurrencies and AI will become smaller. However, new trends will emerge, and what we need to do is to always be friends with trends, always stand at the forefront, although this is difficult.
Eighth, the RMB to USD exchange rate will show a trend of fluctuating depreciation. 7.5 is a very important threshold, and this threshold may not hold in 2025.
Ninth, the improvement-oriented housing in core locations of Beijing and Shanghai has already bottomed out in September last year, making it the most core asset domestically. It is said that in January 2025, Beijing and Shanghai will further relax purchase restrictions. However, the overall clearance of the national real estate market will still take considerable time. Recovering from balance sheet recession is not a short-term task.
Tenth, after the end of September 2024, the A-shares market will enter a slow bull market, but it may be very slow.
Of course, the market is constantly changing and evolving, and I will respond to market changes, relying on my latest judgments and actions at that time.
