Thought of the week

The year 2025 starts with altcoins, most of which have lost ground from their December highs. The risk/reward ratio here is currently good.

Digital Asset News

Deng Chao, the CEO of institutional asset manager HashKey Capital, recently predicted to Cointelegraph that he expects crypto projects to attract more capital from venture capitalists in 2025, as many venture capitalists (VCs) are now eyeing stablecoins, real-world asset tokenisation (RWA), artificial intelligence (AI) and blockchain infrastructure. According to Chao, the higher valuations of digital assets in 2024 and the tailwind from the re-election of Donald Trump in the United States will flush more venture capital into the market for crypto projects.

Chao explained: ‘As we are currently transitioning into a supportive macroeconomic environment driven by stimulative US policies and the formalisation of the regulatory framework for cryptocurrencies, this macroeconomic tailwind will lead to more venture capital investment in 2025.’ Despite the optimistic outlook, the CEO warned that macroeconomic risks, including geopolitical tensions or increased deficit spending, could increase price volatility and uncertainty in the new year. Chao added that stablecoins were the strongest proven use case for cryptocurrencies in 2024 and VCs would therefore also increasingly focus on the use of stablecoins in emerging markets.
The United States accounted for over 40% of the Bitcoin network’s global hashrate – the total computing power that secures the Bitcoin protocol – at the end of 2024, with two US-based mining pools alone, Foundry USA and MARA Pool, accounting for over 38.5% of all blocks mined.

According to TheMinerMag, Foundry USA has increased its hashrate from 157 exahashes per second (EH/s) at the beginning of 2024 to around 280 EH/s in December. Foundry, meanwhile, is the largest mining pool in terms of hashrate and controls around 36.5% of the total hashrate on the Bitcoin network. Data from the Hashrate Index shows that MARA Pool currently controls about 32 EH/s or 4.35% of the total hash power. Despite the increase in computing power, China-based mining pools still control the majority of the global hashrate. In addition, mining pools may be headquartered in one country but rely heavily on the computing power of miners outside that country, TheMinerMag pointed out in an article published in September 2024. However, the concentration of computing power in an ever smaller number of mining pools has caused alarm among industry executives.

In October, Rajiv Khemani, co-founder and CEO of mining chip manufacturer Auradine, told Cointelegraph that the decentralisation of Bitcoin was a matter of national security. Bravo’s BTC could weaken similarly to equities and indeed, BTC is already facing headwinds in the new year and will initially remain below the important USD 100,000 mark. This is primarily due to record-breaking capital outflows from Bitcoin ETFs as well as a weakening stock market and the US Federal Reserve’s more cautious monetary policy. As a result, Bravos assumes that the Bitcoin price will initially retreat, although it is already ‘clearly in the parabolic phase’.

‘This is the opposite of September 2024, when the stock markets climbed to new heights while Bitcoin weakened. Back then, Bitcoin was catching up with the stock market,’ the experts point out. They add: ‘Now it could be the case that BTC is moving in the opposite direction to the weakening equities.’ In the accompanying price chart, they refer to the direct comparison between BTC and the S&P 500, which shows a clear divergence in December.

‘If Bitcoin also corrects now, we would buy the downturn at just under USD 80,000 before moving one level higher again,’ they conclude. As Cointelegraph reports, more and more analysts currently believe that a fall to USD 80,000 is likely. The general global financial market situation should therefore always be kept in mind in the coming months.

Digital Asset Market

Market report including trading idea

The majority of digital assets experienced upswings last week, with Bitcoin establishing a new all-time high of ~$106,000 at the start of the week. Altcoins also benefited from these renewed Bitcoin advances and were able to show positive price developments in lockstep. The period before Christmas is usually a positive one for the global financial markets, which is expected to be a solid week, especially as interest rate cuts are expected in the US. Analysts expect the first setbacks to follow in the course of the first quarter of 2025, so the momentum in the market remains positive and could lead to further upswings. Based on news, the market saw a relaxed trading week.

Chart technology

From a chart perspective, Bitcoin is once again trading around the strong resistance zone of $100,000 and has thus been able to establish a strong trend from the support zones. Temporary strength at the start of the new year is fuelling the hopes of many market participants to reach new highs soon, while altcoins continue to lag well behind the local highs. Altcoins therefore offer a good risk/reward ratio for the coming weeks. However, should the New Year effect fizzle out, the support zones could quickly be tested again.

The next price targets in the event of a positive development: ~$102,000, ~$105,500 ~$108,500

The next price targets in the event of a negative trend: ~$95,000, ~$92,500 ~$89,000

Trading idea

Altcoins have not yet established an equivalent positive trend since the correction at the end of the year. As a result, altcoins that rank significantly below the local highs could represent a lucrative alternative.