Highlights Summary of Delphi’s Outlook on the Cryptocurrency Market in 2025

I’ve always been extremely interested in the research reports released by some of the brightest Web3 teams. These reports are like treasure troves of ideas, inspiring people from various perspectives and making them more certain about the views they already

hold. Moreover, the professional opinions contained therein help us gain a deeper understanding of different people’s perspectives on the Web3 field. Now, let’s take a look at the abstract content of Delphi’s "Outlook on the Cryptocurrency Market in 2025".
Long Live Bitcoin
Not long ago, many people thought that a $100,000 price for Bitcoin was just a pipe dream. However, things have changed dramatically now. Bitcoin’s market capitalization has now reached approximately $2 trillion, which is truly astonishing. If Bitcoin were a listed company, its market capitalization would be enough to make it rank among the sixth most valuable companies in the world.
Although Bitcoin has already attracted a great deal of attention, it actually still has considerable room for growth. In comparison, Bitcoin’s market capitalization is only 11% of the total market capitalization of the seven American tech giants (such as Apple, NVIDIA, Microsoft, Amazon, Google, META, and Tesla); it is less than 3% of the total market capitalization of the US stock market and accounts for only about 1.5% of the global stock market capitalization; its entire market capitalization only accounts for 5% of the total outstanding public debt in the US and is less than 0.7% of the global debt (the sum of public debt and private debt); the size of the US money market funds is more than three times that of Bitcoin’s market capitalization; Bitcoin’s market capitalization only accounts for about 15% of the total global foreign exchange reserve assets. Just imagine that if global central banks reallocated 5% of their respective gold reserves to Bitcoin, it would increase Bitcoin’s purchasing power by more than $150 billion, which is three times the total net inflow into IBIT this year.
Currently, household net worth has reached an all-time high, exceeding $160 trillion, which is more than $40 trillion higher than the peak before the pandemic. This growth is mainly driven by the continuous rise in housing prices and the booming stock market, and this value is more than 80 times higher than Bitcoin’s current market capitalization.
In an environment where the Federal Reserve and other central banks cause their domestic currencies to depreciate by 5 - 7% annually, investors need to aim for an annual return rate of 10 - 15% to make up for the resulting loss of purchasing power in the future. From this, we can understand why Bitcoin and other high-growth industries have received so much attention and have such strong momentum. Because at a depreciation rate of 5% per year, the real value of the currency will halve in 14 years; at a depreciation rate of 7% per year, the real value of the currency will halve in 10 years.
Disillusionment of Altcoins
Although Bitcoin has repeatedly hit record highs this year, for the vast majority of altcoins, 2024 has not been a particularly successful year.
Ethereum (ETH) failed to reach its all-time high; Solana (SOL) hit a new all-time high again, but it was only a few dollars higher than its previous peak, which is rather insignificant compared to the growth in its market capitalization and network activity; Arbitrum (ARB) performed strongly at the beginning of the year but started to underperform towards the end of the year. There are many similar cases. You can clearly see this just by looking at the data of 90% of the altcoins in your investment portfolio.
So, what are the reasons for this?
Firstly, it’s due to Bitcoin’s dominant position. Driven by factors such as ETF flows and support from Trump, Bitcoin has had an extraordinary year, with a price increase of over 130% so far this year, and its dominant position has risen to a three-year high.

Secondly, there is the issue of market fragmentation. A new phenomenon has emerged in the cryptocurrency market this year, which is market fragmentation. In previous market cycles, various cryptocurrencies tended to trade synchronously. For example, when Bitcoin (BTC) rose by 1%, Ethereum (ETH) usually rose by 2%, and altcoins would rise by 3%, following a relatively predictable pattern. However, this cycle is completely different. Only a small number of cryptocurrencies have performed outstandingly, while most have performed poorly, presenting a "red ocean" situation. The rising tide of Bitcoin has not benefited all cryptocurrencies, and the classic "Altseason" that many people were looking forward to did not materialize.
Finally, there is another reason that cannot be ignored, which is meme coins (and recently AI Agents). Cryptocurrencies have always been fluctuating between being seen as a "pure Ponzi scheme" and "technology that has the potential to change the world". In 2024, the former perception dominated. The emergence of the meme coin supercycle has strengthened the idea that cryptocurrencies are just a huge Ponzi scheme. People began to question whether fundamentals really matter and even felt that cryptocurrencies were like "a casino on Mars", and these concerns are reasonable.
I'd like to add one more point here. When people label meme coins as the best-performing assets of the year, they usually only consider those large meme coins that have already created significant market capitalization and established communities. They often overlook the fact that 95% of the issued meme coins have failed to maintain their value, yet people are still "willing to believe" that they can bring returns. With this belief, many people who previously invested in altcoins switched to buying meme coins. Some of them were successful, but most of them failed. As a result, capital inflows have mainly concentrated on Bitcoin (mainly institutional capital) and meme coins (high-risk investments), leaving most altcoins sidelined. The Delphi team believes that in 2025, the market will shift towards recognizing "technology that can change the world". However, personally, I'm not particularly optimistic about this. Because in 2024, there were many key opinion leaders (KOLs) who mainly focused on meme coins. For example, when I created a Telegram folder and wanted to find some truly valuable channels in it, I found it very difficult to find a channel that was not centered around "recommending meme coins". This is what we call the attention game, and widely discussed topics often have a significant impact on market trends.
What's Next?
(1) Stablecoin Growth and Credit Expansion
One of the major obstacles facing the market currently is the oversupply of tokens. A large number of new assets have emerged in the market through private equity investments and public token offerings. For example, in 2024 alone, more than 4 million tokens were issued on Solana's pump.fun platform. However, since the last cycle, the total market capitalization of cryptocurrencies has only increased threefold, while it increased 18-fold in 2017 and 10-fold in 2020.
Now, the previously missing elements - stablecoin growth and credit expansion - are starting to reappear. It is expected that lower interest rates and a more friendly regulatory environment will stimulate speculative behavior and address these market imbalances. As stablecoins regain momentum, their fundamental roles in trading and serving as collateral will be crucial for the market's recovery.
(2) Institutional Capital Inflows
Until last year, due to regulatory uncertainties, institutional capital was very hesitant to participate in cryptocurrency investments. However, with the reluctant approval of the spot Bitcoin ETF by the US Securities and Exchange Commission, the situation has started to change, paving the way for future institutional investors to enter the cryptocurrency market.

These institutional investors will usually look for investment opportunities they are familiar with. Although some investors may dabble in meme coins, they are more likely to be interested in assets in areas such as Ethereum (ETH)/Solana (SOL), decentralized finance (DeFi), or infrastructure. Delphi expects that in the coming year, there may be a situation similar to the "across-the-board rally" in previous cycles. However, this time, projects based on fundamental principles or with core objectives will regain attention. These may include assets like OG DeFi, which have a good historical performance and have been tested in practice. They may also be infrastructure assets, similar to the L1 transactions we have seen before. Others may cover real-world assets (RWAs) or emerging fields such as artificial intelligence or decentralized physical infrastructure networks (DePIN).
It should be noted that not every cryptocurrency will experience triple-digit increases as before, and meme coins will continue to exist in the market. This may signal a new beginning and a broad-based rally in the cryptocurrency market. Generally speaking, most institutional traders rely heavily on option hedging. Therefore, if there is an "across-the-board rally", the assets that are most likely to attract investors' interest will be those with options, which can mainly be traded on platforms like Deribit or Aevo.
(3) Solana's Dominance
Solana has fully demonstrated the resilience of the blockchain ecosystem. After a 96% plunge during the FTX collapse, it achieved an astonishing rebound in 2024.
Its main highlights are as follows:
Firstly, in terms of developer momentum, Solana's hackathons and airdrops (such as the Jito airdrop) have reignited the enthusiasm of developers and users to participate, creating a virtuous cycle of innovation and adoption.
Secondly, in terms of market dominance, from meme coins to artificial intelligence applications, Solana dominated many trends in 2024. It is worth mentioning that its real economic value (measured by transaction fees and maximum extractable value MEV) exceeds that of Ethereum by more than 200%.
Thirdly, in terms of future outlook, Solana is expected to challenge Ethereum's dominance in terms of scalability and user experience. The seamless user experience and centralized ecosystem it provides have significant advantages compared to decentralized L2 solutions.
Final Thoughts
For many people, the current market situation may remind them of the period from 2017 to 2018. At that time, Bitcoin reached a peak of $20,000 before the New Year and began to decline shortly after entering 2018. However, in my opinion, it makes no sense to compare the cryptocurrency market in 2018 with that in 2025, as these are two completely different market environments.
We need to understand that the broad cryptocurrency market actually extends far beyond the timeframes covered by some specific platforms. People outside these platforms have very different views on the market.
It is expected that in 2025, the cryptocurrency market will be divided into two main vertical areas:
One is the Web3 natives. These traders are deeply rooted in the cryptocurrency market. They have a deep and detailed understanding of Bitcoin's unique characteristics and are willing to participate in high-risk transactions, such as meme coins, artificial intelligence agents, and presales. It's like the "Wild West", full of opportunities and risks.
The other is ordinary investors. Institutional investors and retail investors usually have different approaches to risk management. They usually adhere to more basic investment and trading strategies and regard cryptocurrencies as substitutes for the stock market.
Which vertical area will be marginalized? Those early-stage DeFi, RWA, and DePIN protocols that are unable to maintain a leading position in the niche market or at least on the blockchain are likely to face such a situation. Of course, these are just some of my personal thoughts.