How to Continue Profiting in the New Cryptocurrency Landscape of 2025?
The four-year cycle has come to an end. We are entering a new paradigm in cryptocurrency—survival of the fittest, and elimination of the unfit.
Before sharing my strategies for navigating market changes in 2025 to continue accumulating wealth in uncharted territory, let’s first explore why the four-year cycle has become a thing of the past.
I believe there are two main reasons why the four-year cycle is no longer applicable.
**Diminishing Halving Effect**
Firstly, from the supply side, the halving effect of Bitcoin ($BTC) is gradually weakening. With each halving, the issuance of new Bitcoin is reduced by smaller increments.
For example, during the halvings in 2012 and 2016, the issuance was reduced by 50% and 25% respectively, leading to significant impacts on market prices. However, by 2024, the reduction in issuance from the halving is only 6.25%. This implies that the halving’s influence on price has diminished considerably.
**ETFs Changing Market Rules**
Secondly, from the demand side, the introduction of Bitcoin ETFs is a significant variable that has permanently altered market rules. Bitcoin ETFs are financial instruments that allow investors from traditional financial markets to invest in Bitcoin indirectly. Since their introduction, they have become the most successful ETF products in history, with demand far exceeding expectations.
This influx of demand has not only changed the overall landscape of the cryptocurrency market but has also disrupted many old market norms (such as the four-year cycle). The greatest impact of ETFs is actually reflected in the altcoin market. Let me elaborate.
In the past, you might have often seen a chart showing the price rotation relationship between Bitcoin and altcoins. This was indeed valid in 2021. However, that relationship has since broken down.
**Disappearance of Bitcoin’s Wealth Effect**
In 2017 and 2021, when Bitcoin prices surged, many wealthy Bitcoin whales would transfer profits into altcoins on centralized exchanges (CEX), thereby driving the prosperity of the altcoin market. However, now, the majority of new funds are entering the market through Bitcoin ETFs, and these funds are not flowing into the altcoin market. In other words, the flow of capital has fundamentally changed, and altcoins no longer benefit from Bitcoin’s wealth effect.
**Retail Investors Skipping Stages 2 (ETH) and 3 (Mainstream Coins)**
Retail investors are now directly flocking to high-risk speculative projects on-chain, referred to as “on-chain gambling games (Pump Fun).” Compared to 2021, the number of retail investors in this cycle has decreased significantly. This is mainly due to macroeconomic pressures and the scars left by events like LUNA, FTX, BlockFi, and Voyager during the last cycle.
However, those retail players who remain in the market are bypassing mainstream coins and choosing to seek opportunities on-chain. You can read my detailed analysis of how this phenomenon affects the market here.
If my judgment is correct—that the cycle theory is no longer applicable—what changes will this bring to the future market?
I have both bad news and good news to share.
The bad news is: it has become harder to “lie flat and make money.” This is a natural signal of the industry’s gradual maturation. In fact, there are now more trading opportunities in the market, but if you continue to apply strategies from 2021—such as holding a bunch of altcoins while waiting quietly for the “altcoin season” to arrive—you may be disappointed and perform poorly.
The good news is: since there is no longer a so-called four-year cycle, it means that prolonged bear markets triggered by specific factors in cryptocurrency will no longer occur. Of course, from a macroeconomic perspective, long-term bear markets are still possible, as cryptocurrencies do not operate in isolation, and their correlation with the macroeconomy is now tighter than ever.
The market’s “risk appetite periods” and “risk aversion periods” are more likely to be driven by changes in macroeconomic conditions. These changes typically trigger short-term mini echo bubbles, rather than sustained months of one-sided upward trends. An echo bubble refers to a short-term market rebound induced by changes in the macro environment, which, while smaller in scale, bears similarities to past large bubbles.
Within these bubbles, there are numerous profit opportunities. For instance, in 2024, we witnessed rotations of different hot spots: November saw a meme craze, December focused on AI concepts, and January highlighted AI agents. There will undoubtedly be new trends emerging next.
If you are sharp enough, these are excellent profit-making opportunities, but they require strategies that differ slightly from past cycles.
This brings us to my next point: my strategy. A few days ago, I had dinner with @gametheorizing, who made a very insightful observation. Many people are pursuing an ultimate goal: whether it’s to multiply their portfolio by 5, 10, or even 20 times. However, a better strategy is to focus on multiple small bets rather than going all in. By continuously accumulating a series of small victories, this approach may yield greater long-term returns.
Therefore, rather than betting everything on the hope that altcoin season will double your assets quickly, consider trying to accumulate wealth through the compounding effect of time.
Specifically, you can adopt the following strategy:
Small bet > Take profit, re-bet > Take profit again, and repeat.
This is why many top traders and thinkers in the crypto space (like Jordi) were once professional poker players. They learned to approach each trade with probabilistic thinking, assessing possible outcomes rather than betting blindly.
My portfolio is currently allocated as follows: 50% invested in long-term promising high-conviction assets, and 50% in stablecoins and active trading. I will utilize this portion of capital to seek short-term opportunities in the market, entering and exiting flexibly.
Additionally, I use stablecoins as a benchmark to measure trading success or failure. Each time I exit a trade, I convert profits back into stablecoins, allowing me to clearly see my earnings.
If your cryptocurrency portfolio is too diversified and you are unsure how to respond to current market changes, last week I shared a guide detailing how to optimize your portfolio based on market changes.
In that article, I emphasized a key point: the importance of setting an “invalidation” standard for each trade. Just like when you decide to purchase a specific cryptocurrency, you need a clear reason to validate your choice. “Invalidation” refers to the criteria for exiting a trade when market conditions no longer align with your expectations.
I’ve noticed that many people enter trades without a fundamental awareness of risk management and without setting clear exit criteria. This practice often leads to unnecessary losses.
If you are looking for a suggestion that can significantly enhance your future profitability, it is this: set clear technical or fundamental “invalidation” standards for each trade. This not only helps you manage risk better but also improves overall trading efficiency.
Of course, your level of confidence in a particular trade and your expected holding period may influence how you set the “invalidation” standards or trigger conditions. However, this does not change the fact that you need to plan ahead. Having a clear exit plan is one of the keys to successful trading.
Although the current market may not fully adhere to previous cyclical patterns, I remain optimistic about the future. As long as one maintains the right mindset and strategy, 2025 still holds the potential for tremendous growth.
Currently, we are in a bear market phase, but the market trend will eventually change, bringing many new opportunities. Until then, your primary goal should be survival.
The returns in the cryptocurrency market often belong to those who can endure through extreme volatility. Regardless of how the market fluctuates, patience and resilience are the ultimate keys to success.
This article is collaboratively reprinted from: Deep Tide