1. A Token for Everything

If you refer back to my thoughts from 2023 (https://t.me/aaaaimthinkinggg/219), most things have plateaued in mindshare. Definitely not peaked, but my initial thoughts revolved around the idea that fresh liquidity was the missing piece to this puzzle. However, after seeing how 2024 played out for crypto, I'm starting to think that fresh liquidity is not the only thing to assess, and that we might be underestimating the implications of enabling speedy liquidity on a decentralised front for the masses.

We saw many captivating token launches in 2024, but it's going to get a lot weirder and irregular in 2025. Chillguy from Tiktok, minor controversies like Luigi, and even isolated crypto incidents like Mira showcase that the financialization of our attention spans has merely begun and will only continue to accelerate for 2025. Most will die out, but some will manage to make a serious comeback aided by various liquidity events. It is highly unlikely that the current rate of narrative consumption is in its final form, especially with the transition to live media and AI being the natural next step forward.

The further we accelerate on this front, the quicker it degrades from a subtle symphony to a chaotic dissonance. I believe liquidity will prefer to chase tangible attention over fundamentals and tech authenticity. The up-only price action seen in 2021 will be replaced with periods of spontaneous shuffling of liquidity, attributing to a sluggish price grind for established high caps, a perfect business scenario for yield solutions. Holding until the end would not be as rewarding as it once was, and instead, rotating would be the preferred strategy. I wouldn't be surprised to see OTHERS (Total excluding top 10) climb up while TOTAL3 (Total excluding BTC and ETH) lags behind, connoting frequent rotations and less overall growth.

Will this time be any different?

2. The Agentic Cycle

We've all seen and heard the enthusiasm about AI changing the world for good. And indeed an AI boom is here, all the while as massive capital expenditures by large corporations continuing to accrue (this probably won't be slowing down anytime soon). With Nvidia releasing their own AI Agents, expect further agentic narratives and creativity to spring from key industry leaders like Apple and Google. They will definitely leverage their existing market power to keep up with Anthropic and OpenAI. An AI producing an animated feature film to be nominated an Oscar doesn't seem that unlikely anymore. Thus, a frenzy of narratives mixed with AI are essentially on 2025's crypto-native doorstep, although at this point in time, AI's impact and true use cases are mostly left to imagination.

Based on observed KaitoAI trends, a lot of alarmists have pointed out that AI mindshare hit a staggering 70% in recent days. Though it may seem somewhat daunting and unsustainable, the market capitalization of AI is still very small relative to the entire space. I personally feel that AI is ultimately a blanket narrative rather than a fixed portion of mindshare. Still there are other factors that need to be monitored like the rate of growth, so ultimately innovation will need to remain consistent for speculation to continue. AI will probably hit > 90% mindshare for many periods at a time. It's happening already, but expect existing narratives to continue being mixed in mindshare with AI:

DeFi → AIDeFi
As I write this, Daniele from Wonderland also shared his vision on "DeFAI."

RWA → AIRWA
Hoping to see an AI stablecoin aggregator that binds multiple mechanisms...

NFT → AINFT
xNomad is working on an MVP for this, expect more to follow.

GameFi → AIGameFi
Parallel Colony is leading in this area; gaming agents are important too.

DeSci → AIDeSci
a16z has started vetting startup pitches for AI doctors with personalities matching the underlying professional. AI and science go hand in hand, pretty self explanatory.

SocialFi → InfoFi (via social graphs)
Projects and AI agents can utilize existing social graphs to trigger a positive liquidity event.

Someone anonymous uploading a large social feed into an LLM and generating a bone-chilling, time restricted strategy game doesn't seem too farfetched for the final touches, does it now?


With future expectations in mind, it's also important to keep track of our progress so far. The agentic cycle will spiral into mania, but before it sees continued growth like DeFi did back in the day, a liquidity test is expected. And an extreme one at that. There will be a period of decay for agents unable to maintain relevancy as innovation keeps trending and standards of expectation keep rising.

DeFi had 3 stages to it IMO, and as of now agents parallel the first stage (DeFi 1.0): anonymous, spontaneous, and strictly inflationary. DeFi 2.0, which aimed to reduce emissions/saturation under verified ownership paved way for stronger PMF models to emerge, and this is the next step in our current agentic agenda. Finally, there was DeFi 3.0. This opened doors to multi-dimensional use cases and called for the infamous and well-timed ponzi known as OHM to be promoted. I believe agents will share the same fate, and while I don't pretend to know or fathom what breakthrough it might be for agents, it will be something extraordinary and something very ridiculous. It will most likely involve the communication of multiple agents with access to multiple liquidity channels. The best that you can do to prepare for this stage is to selectively find leaders in each niche or focus on frameworks that support agents building towards this grandiose vision.

3. The Macro Equation

I've written a lot of words so far that make it sound as if a lot of time remains until the completion of this cycle. However time is indeed limited, so being mindful of the acceleration that occurs in the next few months is paramount to staying on top of things. I've delayed this post for a few days, and in those few days, it seems that the market has showed its hand. I'm expecting bearish price action with a double-top (est. $108k-110k) to occur before the inauguration date, following expert opinions on price. Clarity needs to be addressed on how Bitcoin will continue to find meaningful liquidity, simultaneously while the the dollar keeps rallying. It is very unlikely that Trump is going to want a weaker dollar only to justify a bit of relief and optimism for stonks and risk assets. It probably requires global attention, but global liquidity doesn't seem too encouraging right now either.

On the other side of global liquidity lies China, and China's bond yields have been dropping like no tomorrow. Some people predict and hope that a policy shift is in the cards, but despite signs of economic slowdown, the odds don't look too great right now. While others remark that this shift could cause for liquidity to enter foreign markets (mainly US) and crypto, it isn't something that looks to rebound immediately.

The macro equation for 2025 is introducing a lot more variables than what we are used to. Thus it's almost impossible to say with certainty that we are heading into easier times. Bitcoin is now in the big leagues. This is what we wanted, right?

For now we stick with the basics. FOMC should address some of the concerns, and the return of a Coinbase premium is what I'm expecting for Bitcoin to bounce for that double-top. As for global liquidity, we should see some positive developments shortly after the inauguration date. The inauguration date holds a special trading memento for crypto as well. Many people are speculating that a Strategic Bitcoin Reserve will be filed under executive order along with potential catalysts for DeFi to surface in the form of government support. I believe this to be unlikely, but rather policymakers will start planning for these objectives in the next few months.

Can we truly rely on government promises? To me, it is reminiscent of the notorious China approval and aftermath in 2017. The market will price things accordingly, but without some sort of unprecedented miracle, expect sluggishness to ensue as reality sets in. Expecting AI to struggle a bit then as well.

Eventually I expect the same old crypto dynamics to play out. Bitcoin will top first along with most leading majors in the next few months. Equities will also top sometime in April, preventing further liquidity drives to crypto. Remaining majors top here. Ethereum will likely deviate from its expected path with ETF flows predominantly controlling its trajectory. AI and minor on-chain narratives will continue to expand until the summer. GameFi takes a bit longer to materialize, but lasts a bit longer.


TLDR:
- Choppy and bearish leaning outlook for most of January, subject to change via injection of fresh global liquidity. Exceptions are based on mindshare.

- Temporary mindshare shifts toward newer launches (eg. DeSci, Abstract, Initia, Berachain, Monad) and meme resurgences take place. Murad was right!

- Markets to shy away from any type of bearishness in mid February and crypto naturally ascends higher.

- Ethereum to take the lead starting in February with staking ETFs and institutional flows dominating both traditional and crypto-centric mindshare.

— — — — — — — — — — — — — — — — — — —
Now let's call this market's bluff and send it higher.

Watching BTC.D as we get the last bit of panic selling

Good chance we see some news today for crypto.

Not sure if this will do much, but here's the news

No credit to me. All credits to the experts, especially Rickus, that were bullish when everyone was bearish.

Good luck out there...

If Trump's executive orders are very good for crypto, it will invalidate everyone's trading plans, so stay alert.

I sense a seismic disturbance for all things crypto.
These next few months are going to be legendary.
Green light.

Just shedding some perspective on something Vitalik wrote 3 years ago: https://x.com/VitalikButerin/status/1479501366192132099/photo/1

As the years have gone by, the gradual phase for new ideas and emerging blockchain use-cases has become noteworthy, but few have proven to show staying power. This has swung the pendulum back in favor of originality and stability, swaying from liberated mass activity to a limited radius of do's and dont's. And now, that same pendulum is ready to swing again. I believe this cycle has more room to reflect the progress of a multi-chain economy, and we will see a good glimpse of its potential before the pendulum swings back in favor of against.

This is typical psychology when it comes to assessing adoption and understanding what the market holds dearly — for better or for worse. As blockchains finalize their scaling plans, there is no going back. Things will only accelerate, but not in the exact path you'd think.

The internet is potentially a foray of what's to come for blockchains. Right now, the hot ball of capital is slowly gravitating from infrastructure into applications — applications that may or may not work at all, but promise to deliver. The key takeaway is that these apps are being built all over the place. This is not anyone's fault in particular; it's naturally a result from the misalignment of user incentives. The blockchain matrix will consist of domains and instead of communicating at the infra level, interaction between application layers is the obvious next step. And this is what Vitalik was warning us about. Vitalik is not implying that one chain is the solution here. He is implying that we must all be aligned in our efforts, otherwise it will lead to a stark downfall.

The further we go into the cycle, voices will get louder. People will go to extreme depths to prove their chain or product is superior than others. Others will try to discredit another's efforts as disparity and bias runs rampant. Conflicts will arise and division will follow, but you must not falter. Stay impartial (to a degree) and stay focused on the flow. The line which you draw between your personal belief of the space and your investing philosophy needs to be explicitly clear. Otherwise you may find it difficult to navigate these markets, even as seasoned cycle traders.

Whether you're a profit maximalist, or a tech purist and pragmatist, or perhaps you sit somewhere in the middle, it is abundantly clear the double-edged sword of opportunity will take us all by surprise.

AI should bottom or start to bounce in the next 1-2 weeks. It's time to start paying attention on-chain, rather than on macro.

This is not the time to be bearish.

This is not the time to be bearish.