Macro Interpretation: The year 2024 has come to a close, marked by multiple reversals and expectation discrepancies in the global financial market, shifting from loose trading at the beginning of the year to #特朗普 trading by year-end, with frequent switches in the market's main line. Against this backdrop, we further interpret the main line of the market in 2025 and focus on its impact on the cryptocurrency market. #2025有哪些关键叙事？
1. A Review of Market Characteristics and Patterns in 2024
The global asset market in 2024 appears chaotic, yet it contains certain patterns and characteristics.
(1) #美股 Strong, with technology leaders leading the charge.
U.S. stocks continued to perform well in 2024, particularly technology leaders. The Nasdaq index rose by 31%, significantly outperforming the S&P 500 and Dow Jones indices. The communication technology and information technology sectors in the tech space benefited from earnings support, leading the gains. Moreover, large-cap stocks outperformed small-cap stocks, with a significant concentration effect observed, as represented by MAAMNNG, whose technology leaders rose by 50%, driving the overall market upwards.
(2) #美元 'A solitary bloom', global capital reallocation.
The dollar index rose by 7% in 2024, reaching a high not seen since November 2022, reflecting the relative strength of the U.S. economy. Emerging market currencies generally depreciated, while global capital flowed into U.S. stocks and bond funds, significantly outpacing other markets. The underlying logic is the resilience of the U.S. economy, particularly the strong performance in the technology sector.
(3) Gold's 'Counter-Trend' Rise and Increased Safe-Haven Demand.
Gold prices remain strong in 2024, briefly breaking through $2800/ounce, with a 21% increase for the year. This contrasts with the strengthening of US Treasury yields and the dollar, primarily driven by overseas safe-haven demand and de-dollarization trends. The rise in gold also further supports the logic of a stronger dollar.
(4) Commodity Lagging, Non-Global Improvement in U.S. Growth.
Commodity performance lagged in 2024, with both copper and crude oil prices seeing declines. This reflects that economic growth in the U.S. is more concentrated in the technology sector rather than a broad-based improvement. Other markets have yet to recover, affecting commodity performance.
(5) The 'Swing' of U.S. Treasury Yields and Repeated Expectations of Rate Cuts.
U.S. Treasury yields experienced multiple swings in 2024, rising above 4.7% in Q1, dropping to a low of 3.6% in Q3, and then recently rebounding to 4.6%. This fluctuation reflects repeated expectations of interest rate cuts, indicating that U.S. economic growth is not under significant pressure and does not require many rate cuts.
2. Reasons for the 'Expectation Gap' in Market Expectations for 2024
Multiple consensus in the 2024 market have shown significant deviations, the roots of which are:
(1) Linear Extrapolation and Static Thinking.
The market tends to overly linearly extrapolate in the absence of a formed trend, leading to deviations in expectations regarding interest rate cuts, dollar trends, and U.S. stock performance. At the same time, when a trend exists, there is an emphasis on mean reversion, ignoring the dynamic changes in interest rates and growth environments, thus missing allocation opportunities.
(2) Ignoring the Relative Changes in Costs and Returns.
When assessing the valuation of U.S. stocks, the market often overlooks the offsetting effect of rising short-term natural rates on risk premiums, leading to overly pessimistic judgments about the upside potential of U.S. stocks.
3. Analysis of the Main Line of the Market in 2025
Based on a review of the market characteristics and patterns in 2024, we believe the main line of the market in 2025 hinges on two aspects: whether the internal situation in the U.S. can diffuse and whether the U.S. and external factors can converge.
(1) Can the internal situation in the United States diffuse?
If the growth points in the U.S. can diffuse, it indicates a reboot of the credit cycle and a recovery of cyclical sectors, which will boost the U.S. economic fundamentals and stock performance. In terms of asset performance, the dollar may still remain strong, with the Dow Jones index, representing cyclical styles, exhibiting greater resilience. If growth points do not diffuse, reliance will remain on technology trends, but growth volatility may increase.
(2) Can the U.S. and external factors converge?
If the U.S. and external markets can converge, it means other markets are gradually recovering, closing the growth gap with the U.S., which will bring greater resilience and opportunity. A weakening of the relative growth advantage could lead to a weaker dollar and capital flowing to other markets. Conversely, if convergence does not occur, it suggests a weak recovery in other markets, and the widening growth gap will continue to boost the dollar.
4. Analysis of Key Variables:
(1) The Sequence and Extent of the Implementation of Trump's Policies.
The sequence and extent of the implementation of Trump’s policies will directly affect growth and asset trading directions. If the policies are implemented too aggressively and lead to a significant rise in inflation, the pace of rate cuts may be further delayed. Therefore, close attention to changes in Trump’s policies is essential.
(2) The Impact of AI Trends on U.S. Technology Stocks.
The current trend in the AI industry plays an important supporting role for U.S. technology stocks, while capital expenditure related to AI is also a major component driving fixed asset investment. If the AI industry trend continues and profits gradually materialize, the U.S. technology sector will continue to boost the U.S. stock market and economic growth.
5. Analysis of the Impact on the Cryptocurrency Market:
The cryptocurrency market has become an important part of the global financial market in recent years, attracting a large number of investors due to its volatility and high returns. In 2024, Bitcoin led global assets with a 122% increase, demonstrating the enormous potential of the cryptocurrency market. Looking ahead to 2025, we believe the cryptocurrency market will be influenced by the following factors:
(1) The Impact of Dollar Trends.
As the world's primary reserve currency, the dollar's trend has a significant impact on the cryptocurrency market. If the dollar strengthens, it may lead to some capital flowing out of the cryptocurrency market in search of safer assets. Conversely, if the dollar weakens, it could attract more capital into the cryptocurrency market.
(2) The Impact of Global Economic Growth.
Improvements in global economic growth will boost investor confidence, driving more capital into risk assets, including the cryptocurrency market. At the same time, as the global economy recovers, the application scenarios for blockchain technology will continue to expand, providing more growth momentum for the cryptocurrency market.
(3) The Impact of Regulatory Policies.
Regulatory policies in various countries regarding the cryptocurrency market will directly impact its development prospects. If regulatory policies trend towards relaxation, it will benefit innovation and development in the cryptocurrency market. Conversely, if regulatory policies tighten, it may suppress the vitality of the cryptocurrency market.
Conclusion: The main line of the market in 2025 will revolve around the internal diffusion and external convergence of the U.S. Key variables such as the sequence and extent of the implementation of Trump’s policies and the impact of AI trends on U.S. technology stocks will directly influence market trends. For the cryptocurrency market, factors such as the dollar's trend, global economic growth, and regulatory policies will jointly shape its development outlook. Close attention to these factors will be crucial to seize future investment opportunities.
BTC Data Analysis:
The total open interest across the network has dropped to $112 billion, a decrease of approximately $18.3 billion compared to the peak on December 8.
Since the trading volume peaked at nearly $500 billion on November 13, CoinAnk data shows it has now decreased to $114.4 billion. It is often said that high volumes indicate high prices, while Bitcoin prices touched a new high of over $108,350 on December 17. In this round of adjustments, both trading volume and open interest peaked before BTC prices, serving as a potential leading indicator.
Therefore, if we are to predict the Bitcoin price for 2025, we should pay more attention to changes in the scale of contract open interest and trading volume, which may play a role in price discovery 10-30 days in advance.
CEX on-chain Bitcoin balances show a continuous downward trend, currently at 2.2087 million BTC, reflecting a change in investors' holding strategies towards Bitcoin. Investors are increasingly inclined to transfer Bitcoin to personal wallets, which may indicate confidence in Bitcoin as a long-term store of value, especially in the context of increased market volatility.
The short-term BTC balance's initial increase followed by a decrease may be related to the market's dual expectations of Bitcoin's price short-term volatility and long-term growth potential. During price fluctuations, investors may transfer Bitcoin to personal wallets to avoid potential market risks. At the same time, long-term holders may wait until prices meet their psychological expectations before trading, which helps to reduce selling pressure in the market, potentially positively impacting Bitcoin's price stability.
This trend has a dual impact on market liquidity. On one hand, the reduction in exchange balances may decrease immediate market liquidity due to the reduced number of Bitcoins available for trading. On the other hand, an increase in long-term holders may enhance market stability, as these holders are less likely to sell their Bitcoins during market volatility. This data also indicates the maturity of participant behavior in the Bitcoin market and the evolution of its market structure.
