The cryptocurrency market increasingly resembles the dot-com bubble, as I mentioned in a previous article. Today, this analogy received new confirmation: DeFiance Capital CEO Arthur Cheong stated that the cryptocurrency market may be approaching the final phase of the "fat protocol theory." 📉
Cheong emphasized that successful applied projects are usually valued five to fifteen times more than revenue, while infrastructure projects, which have seen negligible growth over the past two years, are still overvalued by 150–1000 times. He believes that the speculative premium bubble in crypto infrastructure has officially burst. 💥
🌍 Macroeconomic background: risks of global recession
In addition to the issues facing the crypto market, the macroeconomic situation only exacerbates bearish sentiments. The first 50 days of Donald Trump's presidency were marked by significant instability in the US stock market — the largest since the financial crisis of 2009. Since January 20:
📉 S&P 500 fell by 6.4%;
📉 Nasdaq Composite decreased by 11%;
📉 Dow Jones Industrial Average lost 3.6%;
📊 VIX ("fear index") rose more than 60%, to 27.84 units (with a threshold value of 20, indicating increased volatility).
Additionally, a 2.8% decline in US GDP is projected for the first quarter of 2025. Combined with geopolitical risks such as Russia's war against Ukraine and Putin's unwillingness to even consider a "temporary ceasefire," the prospects for a rapid market recovery appear bleak.
📅 When should we expect a bull market?
Considering all these factors, even under the most optimistic forecasts, the market will begin to recover no earlier than the second half of 2025. A more realistic scenario is stabilization throughout 2025 and the start of a new bull cycle in 2026, but only for 10-20% of crypto projects.🚀
This means that investors should be careful in choosing assets, prioritizing only those with real utility and a strong business model.
❓ What do you think about this forecast? Should we expect a quicker recovery, or, on the contrary, has the cryptocurrency market not yet hit bottom? 🤔
💡 Which cryptocurrencies will survive? $BTC , $ETH , $SOL , what are your thoughts?🔥
