2025 Crypto Assets Market Review and Outlook

At the beginning of 2025, the cryptocurrency market experienced the impact of a series of major events. Macroeconomic conditions have dominated the market, leading to a decline in risk appetite across most sectors and asset classes. Although digital assets have led the way in growth investing, they have not been completely immune to the effects of this trend.

At the beginning of the year, the political atmosphere turned positive for Crypto Assets, driving prices up from the post-election highs in November to January. However, after Bitcoin and Solana hit all-time highs in January, the inauguration of the new government triggered a typical "buy the rumor, sell the news" market reaction. The S&P 500 index and Bitcoin both fell by 15-20%, while smaller market cap tokens saw even larger declines, with Ethereum down 47%. This pullback was mainly due to macro factors and specific issues related to certain digital assets.

From a macro perspective, the market is concerned about increased policy uncertainty and the risk of stagflation. The tariffs introduced by the new government have lowered consumer confidence, corporate earnings and GDP expectations. Each major tariff announcement caused the market to fall, peaking in early April. The establishment of the Ministry of Government Efficiency has also had a significant impact on the mentality of government employees and related businesses.

The digital asset industry also faces unique challenges. The burst of the Meme coin bubble has impacted the market, and while high-profile individuals participating has brought attention to the industry, it has also reinforced the public's negative perception of Crypto Assets. The world's second-largest trading platform suffered a hacker attack, which did not result in customer fund losses, but weakened market confidence.

In the first quarter, the median price of tokens fell by more than 50%, with almost all token prices experiencing declines. The market is increasingly focused on tokens with strong fundamentals, which have outperformed tokens without revenue by 8 percentage points. Although this pullback may be painful, the capital depletion on tokens with no actual value may be healthy.

Historically, the Crypto Assets market has frequently experienced similar pullbacks. During the upward trend from 2020 to 2022, Bitcoin saw multiple significant pullbacks exceeding 20%, while other coins even experienced pullbacks of 40% to 50%. In the current long-term upward trend, there have been three such pullbacks, and being shaken out each time has proven to be a mistake.

Although the first quarter of 2025 was the worst quarter since the summer of 2022, history shows that a sharp decline is usually followed by a strong rebound. Market sentiment indicators have reached historical extremes, signaling that the worst sell-off may be over.

At the same time, favorable interest rates and liquidity conditions are favorable for risk assets. The yield on the 10-year Treasury note is trending downward, and global liquidity conditions continue to improve. Stimulus measures are being implemented in Europe and China, and the United States may also switch to quantitative easing.

From another perspective, the four-year cycle of Crypto Assets often coincides with significant macroeconomic events. The current macroeconomic events are evolving into a crisis of trust in the dollar, which may enhance the appeal of Bitcoin as a non-sovereign store of value.

! Pantera Partners: The sell-off due to the tariff war has passed, and BTC will re-enter the bull market

Recently, crypto assets have begun to show relatively strong signs. In April, certain coins rose while US stocks fell. Although it is still early, digital assets may lead the way in a rebound.

In addition, many positive industry developments are overlooked amid price fluctuations, such as improvements in policy actions and the continuous strengthening of fundamentals. Blockchain companies have generated substantial revenue, on-chain application activity continues to grow, and the usage of stablecoins has reached new highs.

Overall, despite the challenges in the first quarter of 2025, market sentiment indicators suggest that the most aggressive sell-off may be over. As the volatility brought by tariffs gradually subsides, investors may refocus on long-term positive factors and strong fundamentals. As a pioneer of growth assets, Crypto Assets may rebound first and perform strongly.

! Pantera Partners: The sell-off caused by the tariff war has passed, and BTC will re-enter the bull market

! Pantera Partners: The sell-off due to the tariff war has passed, and BTC will re-enter the bull market

! Pantera Partners: The sell-off caused by the tariff war has passed, and BTC will re-enter the bull market