Source: Talking about Li
I remember in previous series of articles, we were full of expectations for the potential performance of the second quarter this year. Looking at the current results, it is relatively acceptable. The quarterly return rate of Bitcoin is 30.32%, and the quarterly return rate of Ethereum is 37.91%, both exceeding the median level. As shown in the figure below.
As for the potential performance in the upcoming third quarter, according to previous articles' expectations, we will maintain a cautious attitude towards the overall market because the market may still face some existing uncertainties, such as:
1) Trump's tariff policy
In April of this year, Trump announced a 90-day buffer period for the tariff plan on the Liberation Day (i.e., Trump named April 2 as Liberation Day) for EU countries and others. By timeline, this buffer period ends on July 8.
If there are no new negotiations or plans by then, Trump may continue to restore tariffs up to 50%. Although the market has already digested this to some extent, for risk-sensitive markets (crypto market, stock market), if this tariff plan continues to be enforced, it will undoubtedly increase short-term volatility risk in the market.
From the latest news available online, the U.S. Treasury Secretary has hinted that tariff policies will continue to be considered for extension until September 1. However, Trump stated in an interview that they could be 'extended or shortened.' It seems that the implication here is that the U.S. will not suffer losses; whether the tariffs are extended or not will depend on the compromise of other countries.
2) Federal Reserve's interest rate meetings
It seems that many people are expecting the Federal Reserve to begin cutting rates in July, and the next interest rate meeting is indeed in July. However, based on currently known information, the probability of a rate cut in July is low, and there may still be some variables.
Earlier, there were reports online saying that Trump is considering announcing a replacement for Powell by September or October at the latest. Moreover, Trump publicly stated in a recent interview: 'Yes, I know who I want to pick from three or four people. Fortunately, Powell's term will end soon, and I think he is terrible.'
However, we believe that these are superficial comments. What if Trump continues to nominate Powell? After all, Trump only cares about interests and does not care whether his words will contradict him. If Trump and Powell (including the forces behind both) can reach a consensus on interests, we do not rule out the possibility that the market may welcome interest rate cuts as early as this September. Currently, the possibility of a 0.25% rate cut (i.e., 400-425bps) at the September meeting has risen to 75.9%, as shown in the figure below.
In addition to the important macro events we mentioned regarding tariff policies and the Federal Reserve's interest rates, there are still many other uncertain factors to pay attention to in the crypto market in the third quarter, such as:
- Progress of the Stablecoin Bill (Stablecoin Bill GENIUS). It is expected to further advance to negotiations in both houses in the third quarter.
- Progress of the Market Structure Bill. Currently, it is still in the early stages, so let's see whether it will proceed together with the Stablecoin Bill in the third quarter.
- Regulatory changes regarding Stablecoins by banks. Currently, the Federal Reserve, OCC, and FDIC have lifted several restrictions on banks (mainly referring to U.S. banks), which means banks can easily participate in Stablecoin and crypto asset businesses. We should be able to see more banks participating in cryptocurrencies in the third quarter (conversely, capable crypto-related listed companies may also venture into banking business in the future).
- The transmission effect of the heat of crypto concept stocks. If the crypto concept can continue to ferment and speculate in the stock market (like the U.S. stock market) in the third quarter, then some announcements or dynamics from related listed companies may also affect the trends of some crypto projects themselves. For example, previously (on May 8, Bloomberg reported that Robinhood is considering developing a blockchain platform that would allow European investors to trade U.S. stocks, and at that time, Robinhood was already in contact with Arbitrum and Solana), it was rumored that the U.S.-listed company Robinhood might launch its own L2 blockchain based on Arbitrum, which would also benefit short-term speculation in ARB. Additionally, Robinhood is said to be planning to launch ETH or SOL staking, which theoretically would also benefit ETH or SOL. We may also see more announcements or dynamics from other listed companies in the third quarter similar to Robinhood's actions.
- SEC regulatory changes regarding the crypto industry. Earlier this year, the SEC established a Crypto task force and carried out a series of related work. Let's see what new actual actions they might take in the third quarter. Additionally, regarding ETFs, we mentioned in previous articles (such as on June 15) that at the end of May, the SEC passed a statement clarifying that staking transactions do not fall under securities trading. This seems to significantly increase the probability of ETH ETF incorporating staking functionality this year, and many are paying attention to the SOL ETF, which, if it receives preliminary approval in July, may be implemented by the end of the third quarter or the beginning of the fourth quarter.
In short, from the perspective of the larger cycle, the third quarter of this year should be a relatively important market period, which we might as well call: the season of intersection between cryptocurrency regulation and market transformation. Whether at the macro level, political level, policy level, or market level... we may continue to witness some different changes.
As for the longer-term trends in the crypto market, there are currently two main viewpoints:
One is to continue the historical cycle pattern, such as maintaining a bull-bear cycle of about 4-5 years. Under such rules, we would welcome a new bear market in 2026 and another new bull market in 2028-2029.
One is to transform and break existing rules, such as emerging from a super cycle like the U.S. stock market. This super cycle may begin in this round of crypto bull market or in the next round, whereby Bitcoin, after undergoing a series of transformations (along with different phase shifts between mini bull and bear markets), will officially enter a multi-year long bull and slow bull cycle.
However, all of the above are currently speculations. Regardless of the outcome, from an investment perspective, only by continuing to 'live' in this field can we possibly witness everything firsthand, and it seems that we are approaching a new era of cryptocurrency.
While looking to the future, it is still important to grasp the present. Specifically, in the upcoming week, we will still experience both opportunities and risks. We will gradually start to see some significant data changes, including U.S. June ISM manufacturing data (Tuesday), U.S. June ADP employment data (Wednesday), U.S. June unemployment rate data (Thursday), etc. If the subsequent developments based on various macro or policy aspects do not meet market expectations, we cannot rule out the possibility of experiencing another round of corrections or significant volatility in the third quarter.
The overall market in recent days has been relatively calm, with Bitcoin fluctuating around $108,000, lingering near previous highs. However, compared to this calm market, people's mood seems to be more subdued and pessimistic.
As for the potential market trend ahead, Bitcoin's market structure still appears relatively intact and is basically similar to previous cycles (like the previous bull market cycle). If the script does not change, we are likely to see Bitcoin continue to break new historical highs in the third quarter (or delayed until the fourth quarter).
Of course, this statement is also based on considerations from other angles. For example, comparing Bitcoin with the S&P 500 shows that the overall trend structure of Bitcoin and the S&P 500 basically follows each other, just with some slight delays at times. Currently, both the S&P and Nasdaq are breaking new highs together. If this situation can continue, then the possibility of Bitcoin continuing to rise will be relatively high. As shown in the figure below.
For example, comparing Bitcoin with DXY (the U.S. Dollar Index), we find that in most cases, when the dollar weakens, Bitcoin tends to perform well. Currently, the dollar is still at a low range. If the dollar's trend cannot quickly reverse and continues to fluctuate at low levels, it is possible that some funds may continue to choose Bitcoin for risk hedging, further boosting Bitcoin's price. As shown in the figure below.
However, these are all potential trend speculations. In the short term, the market cannot be predicted accurately because we never know what will happen tomorrow (in the future). All we can do is make various speculations based on possibilities or existing data.
Above, we mainly discussed Bitcoin. In our previous articles, we have already repeated that for the current crypto market, there should be two independent plans executed: one for Bitcoin investment and one for altcoin investment, which should not be mixed together. Yes, because compared to Bitcoin, due to overall insufficient liquidity, along with the market being severely diluted (for example, too many new altcoin projects added), the overall performance of altcoins so far has still left many people disappointed. Although in this cycle we have already experienced three mini altcoin season stages, as shown in the figure below.
However, from the discussions among members in the daily group and the observations of comments in the public account's backend, it seems that many people have not made any money on altcoins, and instead, many are still trapped or suffering losses.
Although some people no longer believe in the altcoin season (Altcoin Season) and related indicators, we still believe that some experiences (market behaviors) are worth referencing at the current stage of market development. In fact, in both historical bull market cycles and the current bull market cycle, Bitcoin has dominated for most of the time (theoretically over 90% of the time). Aside from a few projects under special speculative fields (for example, the AI concept in this cycle has continuously risen several times), most altcoins tend to perform poorly throughout a complete cycle, and it is only in the final phase of a bull market that altcoins are most likely to perform exceptionally well.
In other words, although the overall performance of altcoins in this cycle has not been very good due to severe dilution and other issues, the market value of TOTAL2 has not even exceeded the peak of the previous bull market, as shown in the figure below.
From the current performance of Bitcoin's dominance (BTC.D), we seem to be in a relatively interesting stage. If Bitcoin can continue to set new highs in a manner similar to the previous bull market (comparing the current market condition with that of September 2021), then it is highly likely that Bitcoin's dominance will decline afterward. At that time, we would have the opportunity to see a mini altcoin season for the fourth time, and TOTAL2 might also reach a decent position again (but considering the issues on-chain in this cycle, the current TOTAL indicator may differ from the TOTAL in historical cycles, which we already discussed in our article on February 3rd).
The impression of traditional altcoin seasons among veteran traders: when the altcoin season arrives, it seems that almost all coins are rising. It's not an exaggeration to say that back then, one could buy anything on OK or Binance with eyes closed and still make money.
The current mini altcoin season at the beginning of this cycle refers to the fact that there will no longer be opportunities for the traditional altcoin season's spectacular scenes. We will only see some leading and story-driven altcoins perform well, while most altcoins (especially various low-quality projects on-chain) not only cannot create new highs but also may head towards zero.
Additionally, the mini altcoin season in this cycle, from a performance perspective, can be roughly divided into several main stages. The early stage is focused on the speculation and explosion of individual 'new concepts' like AI and inscriptions. The mid-stage concentrated on the speculation and explosion of SOL + Memes, while currently, we are theoretically entering (or have already entered) the later stage. This stage appears to be focused on individual narrative fields that have stories to tell, such as Stablecoins and RWA.
This classification is actually quite clear. That is to say, aside from Bitcoin, if altcoins hope to allocate some positions again, it is best to focus on narrative fields like Stablecoins and RWA. Moreover, we mentioned in our previous articles that the popularity of the Stablecoin concept is currently being reflected in stock market performance. If funds (speculation) have the opportunity to return to the crypto market, now is still a good time for you to continue your research. When Bitcoin is consolidating at a high level, when altcoins have caused most people to lose hope, and when more and more people are leaving the crypto market to speculate on stocks... this might be your new opportunity. Taking Stablecoins as an example, projects related to stablecoins like AAVE and ENA still have some performance space.
Of course, we still hold the old saying from previous articles: if there are new performance opportunities for altcoins in the upcoming third quarter (or fourth quarter), one must pay attention to realizing profits in a timely manner (i.e., converting your altcoins into BTC or USDC). Opportunities and risks are often proportional; surges are meant for better crashes, and crashes are meant for better surges. In the later stages of a bull market, preserving gains is more important than taking higher risks to gamble.
The first half of 2025 has ended in a rather watery way. I hope we can continue to stay focused, keep thinking, and maintain patience as we enter the second half of the year. Although many people are saying 'crypto is dead' now, perhaps what has 'died' is just some people's positions. Although the crypto market has developed for 17 years so far (counting from the emergence of the Bitcoin white paper in 2008), that simple 'violent dividend period' and 'barbaric development period' are passing or becoming history. However, relatively speaking, this field is still one of the few areas of opportunity for ordinary people.