2025 Crypto Assets Market Review and Outlook

At the beginning of 2025, the Crypto Assets market experienced a round of intense fluctuations. At the start of the year, political attitudes shifted to support Crypto Assets, driving Bitcoin and Solana to set historical highs in January. However, the market then saw a significant correction, with the S&P 500 index and Bitcoin both dropping by 15-20%, while smaller coins like Ethereum fell even more, by 47%.

This round of adjustment is mainly triggered by macro factors and industry-specific issues. On the macro front, the market is concerned about increased policy uncertainty and the risk of stagflation. The tariff policies implemented by the new government have reduced consumer confidence, corporate profits, and GDP expectations. Additionally, the establishment of the Efficiency Department (DOGE) has also raised concerns about potential cuts in government spending.

Within the industry, events such as the memecoin bubble burst and a major exchange being hacked have also undermined market confidence. In the first quarter, the prices of the vast majority of tokens fell, with a median decline of over 50%. However, tokens with stable income and cash flow performed relatively well.

From a historical perspective, such significant pullbacks are not uncommon in a bull market. During the upward trend from 2020 to 2022, Bitcoin experienced multiple pullbacks of over 20%. In the current long-term upward trend, we have already experienced three similar pullbacks, each proving that panic selling is a mistake.

Despite the severe short-term volatility, there are still favorable factors supporting the market in the long run. Interest rates and global liquidity conditions are beneficial for risk assets, the trend of 10-year U.S. Treasury yields is downward, and major economies around the world are implementing easing policies. In addition, the industry's fundamentals continue to improve, blockchain enterprises are generating considerable revenue, and user activity remains on the rise.

Overall, although the market still faces uncertainty in the short term, extreme pessimism may indicate that the most intense sell-off has passed. As the impact of tariff policies gradually dissipates, investors are expected to refocus on long-term positive factors and strong fundamentals in the industry. As a leading growth asset, Crypto Assets may be the first to bottom out and rebound.