Crypto 2025: Is The Bull Market Just Warming Up?
Happy New Year, Crypto Investors!
As we step into 2025, let’s reflect on how the markets have evolved since our last ICONOMI newsletter on 25 October 2024. At that time, Bitcoin was trading at roughly $67,000, and the Total Crypto Market Cap Excluding Bitcoin stood at around $946 billion.
In the October report, we focused on three pivotal charts to watch for year-end performance. Each of these trends played out remarkably well:
These predictions largely held, raising the big question: where does the market stand now?
Let’s break it down.
Bitcoin's Historical Performance:
As discussed in the previous newsletter, Bitcoin historically produced an 80% gain from October through to December. However, Q4 2024 produced a gain of roughly 47% due to Bitcoin's year-end dip back below $100,000 - although Bitcoin was up roughly 70% for Q4 when the price was trading at $108,000.?
Using the same chart, on average Bitcoin has gained 39.3% in previous Q1s and 61.7% in Q2s, leading to an average gain of 101% in the first half of the year.
Whilst these averages provide a very bullish outlook for Bitcoin for the next 6 months, and would take the price of Bitcoin to roughly 200,000 USD, it is wise to use this information with caution. For Bitcoin to reach $200,000, 100's of billions of dollars would need to flow into the asset.
Bitcoin Halving Spiral:
Analysing Bitcoin in terms of blocks mined X price, rather than time X price, allows for a more in-depth look at previous bull and bear market averages. Every lap around the spiral represents a 4-year cycle (roughly speaking) - halving to halving - but actually accounts for 210,000 blocks, 52,500 blocks per year.??
1) The white circle represents Bitcoin halving events.
2) The green circle represents bull market tops.
3) The red circle represents bear market lows.
4) The centre of the spiral is Bitcoin's inception date.
Currently, every mined block contains 3.125 BTC and 144 Bitcoin blocks are mined each day. This equates to an increase in the supply of 450 Bitcoin every day.
Looking at previous cycles, we can observe that Bitcoin typically peaks halfway through the second year after a halving event, around block 78,750. On average, this provides 1.5 years' worth of a bull market phase once a halving event takes place. Keep in mind that the last Bitcoin halving event was in April 2024. If we use previous market averages, this would forecast a Bitcoin cycle top occurring in Q3/Q4 2025.
Furthermore, Bitcoin bear market bottoms generally occur around halfway through the third year of the cycle, and on average 1 year after a major market top. After a halving occurrence, Bitcoin has typically bottomed at block 131,250 (about 2.5 years later).
This cycle can and will most likely change depending on the supply/demand dynamics, the number of miners in circulation and the strength and power of the new miners coming into the market. Every cycle is different, however, this analysis indicates there is still a positive outlook for Bitcoin through the middle of this year.
Bitcoin ETF Latest Inflows/Outflows
After a fairly quiet start of 2025, and some minor outflows, liquidity into the Bitcoin ETFs is now starting to ramp up. On Friday last week the Bitcoin Sport ETFs accumulated more than 9,000 BTC, and yesterday, Monday the 6th of Jan, the Bitcoin Spot ETFS accumulated more than 9,600 BTC. Over the past two trading days, they added 18,600 BTC—over 20 times Bitcoin’s daily production rate of 450 BTC.
Since their January 2024 launch, these ETFs have averaged daily inflows of 1,971 BTC—4.38 times the current mining rate. With sustained accumulation at this scale, supply pressures could intensify, further supporting Bitcoin’s price trajectory.?
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Bitcoin MVRV-Z Score: A Proven Indicator for Market Tops:
The chart above highlights Bitcoin's MVRV-Z Score, a powerful metric with a 100% success record in predicting Bitcoin market cycle tops, within 2 weeks. Historically, when the orange Z-Score enters the red zone (signalling extreme overvaluation), it coincides with Bitcoin's market tops, as shown by the circled peaks.
Right now, the Z-Score remains well below the red zone, trading at a Z-score of 2.97, indicating we are still far from a market top. This suggests significant upside potential for Bitcoin before reaching the next major cycle peak.
Understanding the Z-score:
?? The Z-Score reflects the difference between Bitcoin's market cap and its realized cap (average price investors paid). A high Z-Score means overvaluation; a low Z-Score signals opportunity.
?? Historically, Bitcoin has delivered extraordinary returns following periods of low Z-Scores, like the current one.
?? Investors can optimise entry and exit positions from Bitcoin and other digital assets via the use of the Z-score, entering at lower levels and reducing exposure when the price enters the red zone.
Digital Asset Flows by Asset & Year
Bitcoin received the majority of inflows last year, totalling $38 billion, and has already received $576 million of inflows in the first 6 days of this month. However, it is worth noting that Ethereum received $4.8 billion of inflows, XRP received $438 million of inflows, Litecoin received $53 million of inflows and Chainlink $45 million of inflows last year, all are the largest amount of inflows for those assets over the past 4 years. The demand for Solana at the institutional level appeared to fade as it recorded only $69 million of inflows last year, which is less than half of the inflows seen in 2023.?
Crypto Total Market Cap Excluding Bitcoin:
The chart above is taken from the October ICONOMI Newsletter, where we highlighted the pending bullish breakout. The Total Market Cap Excluding Bitcoin was trading at $946 billion.
Fast forward to today, the Crypto Total Market Cap Excluding Bitcoin is trading north of $1.49 trillion, with a gain of 56% from the October Newsletter. Technically speaking, the price action has now re-tested the new support zone of 1.2 trillion and appears to be moving higher. This indicates liquidity is still flowing into assets outside of Bitcoin.?
Institutional interest remains robust across these key assets:
Summary
Institutional demand for digital assets remains strong, with Bitcoin ETFs accumulating at unprecedented rates— on average more than 4.38 times daily mining production. This supply imbalance suggests a prolonged bullish phase, with the next major market cycle top potentially arriving in Q3/Q4 2025.
The MVRV-Z Score and other indicators signal significant upside potential for Bitcoin and altcoins in the months ahead. Meanwhile, the altcoin market is thriving, with Ethereum, XRP, Litecoin, and Chainlink standing out as institutional favourites.
As always, market cycles can shift due to evolving dynamics, so staying informed is crucial. ICONOMI remains committed to delivering timely insights to help you navigate the exciting opportunities in digital assets.
If you want to learn more about the Cryptocurrency market - Schedule a 1-on-1 consultation with the author Anthony Fernandez - Head of Business Development at ICONOMI:
Risk Warning: Cryptocurrency is classed as a high-risk investment. Previous returns do not guarantee or guidance of future performance. Don’t invest in cryptocurrency unless you’re prepared to lose all the money you have invested. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.