Source: Talking about Li and other things
Remember in the previous series of articles, we have been full of expectations for the possible performance in the second quarter of this year. Judging from the current results, it is relatively good. The quarterly return rate of Bitcoin is 30.32%, and the quarterly return rate of Ethereum is 37.91%, both exceeding the median level. As shown in the figure below.
As for the possible performance in the third quarter, according to the expectations in the previous article, we will remain cautious about the overall market, because the market may still need to face some existing uncertainties, such as:
1) Trump’s tariff policy
In April of this year, Trump announced a 90-day buffer period for the Liberation Day (Trump named April 2 Liberation Day) tariff plan on the European Union and other countries. According to the time calculation, the end date of this buffer period is July 8.
If there are no new negotiations or plans by then, Trump may continue to restore tariffs of up to 50%. Although the market has already digested this to a certain extent, as risk markets (crypto markets, stock markets) are highly sensitive to the macro situation, if this tariff plan continues to be implemented, it will undoubtedly increase the short-term volatility risk of the market.
According to the latest news on the Internet, the US Treasury Secretary hinted that the tariff policy will continue to be considered to be extended to September 1, but Trump said in an interview that "it can be extended or shortened." Anyway, it seems that the United States will not suffer any loss, and whether it will be extended or not depends on the degree of compromise of other countries.
2) The Federal Reserve’s interest rate meeting
It seems that many people are now expecting the Federal Reserve to start cutting interest rates in July, and the latest interest rate meeting will be in July. However, judging from some of the information currently known, the probability of a rate cut in July is not high, and there may still be some variables.
There were previous reports on the Internet that Trump was considering announcing a successor to Powell in September or October at the latest, and Trump also publicly stated in a recent interview: "Yes, I know who I will choose among three or four people. Fortunately, Powell's term will end soon. I think he is terrible."
However, we think these are just superficial remarks. What if Trump continues to nominate Powell? Trump only cares about interests and doesn’t care whether his remarks will be slapped in the face. If Trump and Powell (including the forces behind both parties) can reach an agreement on interests, then it is not ruled out that the market may see a rate cut as early as September this year. Currently, the probability of a 0.25% rate cut (i.e. 400–425bps) at the September interest rate meeting has risen to 75.9%, as shown in the figure below.
In addition to the important macro events such as tariff policies and the Federal Reserve interest rate mentioned above, there are many other uncertainties that need to be paid attention to in the third quarter for the crypto market, such as:
-Progress on the Stablecoin Bill GENIUS . It is expected to be further advanced to the negotiation between the two houses in the third quarter.
-The progress of the Market Structure Bill . It is still in the early stages. We will see whether it will be promoted together with the Stablecoin Bill in the third quarter.
- Changes in bank regulation of stablecoins . Currently, the Federal Reserve, OCC, and FDIC have cancelled a number of restrictive regulatory letters to banks (the banks here mainly refer to the United States). In plain words, banks can easily participate in stablecoin and crypto asset businesses. We should be able to see more and more banks involved in cryptocurrencies in the third quarter (conversely, strong crypto-related listed companies may also get involved in banking business in the future).
-The transmission effect of the heat of crypto concept stocks . If the crypto concept can continue to ferment and hype further in the stock market (such as the US stock market) in the third quarter, then some announcements or dynamics of related listed companies may also affect the trend of some crypto projects themselves. For example, before (Bloomberg reported on May 8 that Robinhood was considering developing a blockchain platform that would allow European investors to trade US stocks. It was said that Robinhood was already in contact with Arbitrum and Solana at the time) it was reported that Robinhood, a US-listed company, might launch its own L2 blockchain based on Arbitrum, which would also be conducive to the short-term speculation of ARB. In addition, it is said that Robinhood also plans to launch ETH or SOL Staking, which in theory would also be beneficial to ETH or SOL. Similar to Robinhood's behavior, we may also see more announcements or dynamics from other listed companies in the third quarter.
- SEC's regulatory changes for the crypto industry . At the beginning of this year, the SEC established the Crypto task force and carried out a series of related work, as shown in the figure below. Let's see what new practical actions they can take in the third quarter. In addition, regarding ETFs, we have mentioned in previous articles (such as the article on June 15) that at the end of May, the SEC had already made it clear through a statement (Statement on Certain Protocol Staking Activities) that staking transactions do not belong to securities transactions. This seems to continue to increase the probability of the ETH ETF adding a staking function this year. If the SOL ETF that many people are concerned about can receive preliminary approval in July, then according to the process, it may be implemented at the end of the third quarter or the beginning of the fourth quarter.
In short, the third quarter of this year should be a relatively important market period from a macro-cycle level. We might as well call it: the intersection season of crypto regulation and market change. Whether it is at the macro level, political level, policy level, market level... we may continue to witness some different changes.
As for the longer-term trend of the crypto market, there are currently two main views:
One is to continue the historical cycle , for example, continuing the bull-bear cycle for 4-5 years. Under such a regular pattern, we will usher in a new round of bear market in 2026 and a new round of bull market in 2028-2029.
One is to change and break the existing rules , such as going out of a super cycle like the U.S. stock market. The starting point of this super cycle may occur in the current round of crypto bull market, or it may occur in the next round of crypto bull market. That is, after undergoing a series of changes (accompanied by transitions between small bull markets and small bear markets at different stages), Bitcoin will officially enter a multi-year long bull and slow bull cycle.
However, the above are just speculations at present. No matter what the result is, from an investment perspective, only if we continue to "survive" in this field can we witness everything in person, and now we seem to be approaching a new era of encryption.
While looking forward to the future, it is still important to grasp the present. Specifically, in the next week, there are still opportunities and risks. We will gradually experience some important data changes, including the US June ISM manufacturing data (Tuesday), the US June ADP employment data (Wednesday), the US June unemployment rate data (Thursday)... etc. If the development trend based on various macro or policy aspects fails to meet market expectations, it is not ruled out that there will be another wave of corrections or relatively large fluctuations starting from the third quarter.
The overall market conditions in recent days have actually been rather dull, with Bitcoin fluctuating around $108,000 and continuing to hover near its previous high. However, compared to the dull market conditions, everyone’s mood seems to be more dull and pessimistic.
As for the possible market conditions in the future, the current market structure of Bitcoin is still relatively intact and basically similar to previous cycles (such as the previous bull market cycle). If the script remains unchanged, we will most likely continue to see Bitcoin continue to break new historical highs in the third quarter (or postponed to the fourth quarter).
Of course, this statement is also based on other considerations. For example, by comparing Bitcoin with the S&P500, it can be found that the overall trend structure of Bitcoin and the S&P500 is basically following, but there is a slight delay in reaction at times. Currently, the S&P and the Nasdaq are breaking new highs together. If this situation can continue, then the possibility of Bitcoin continuing to rise will be relatively high. As shown in the figure below.
For example, by comparing Bitcoin with DXY (US Dollar Index), we can find that in most cases, Bitcoin tends to perform well when the US dollar weakens. Currently, the US dollar continues to be in a low range. If the US dollar trend cannot be reversed quickly in the future, but continues to linger and fluctuate in the low range, it is not ruled out that some funds may continue to choose to enter Bitcoin for risk hedging, thereby pushing up the price of Bitcoin again. As shown in the figure below.
However, these are all possible trend speculations. In the short term, the market cannot be accurately predicted because we never know what will happen tomorrow (in the future). All we can do is make speculations from various angles based on some things that may happen or existing data.
We mainly talked about Bitcoin above. In the articles a few days ago, we have repeatedly mentioned that for the current crypto market, two separate plans should be implemented, that is, the investment plan for Bitcoin and the investment plan for Altcoin should not be mixed up. Yes, because compared with Bitcoin, due to the lack of overall liquidity and the serious dilution of the market itself (such as too many new altcoin projects), the overall performance of Altcoin has disappointed many people so far, although we have experienced 3 mini altcoin seasons in this cycle, as shown in the figure below.
However, judging from the daily discussions in the group and the messages in the background of the official account, many people do not seem to have made any money on Altcoin. Instead, many people continue to be trapped or suffer losses.
Although some people no longer believe in the Altcoin Season and related indicators, as far as the current stage of market development is concerned, we still believe that some experiences (market behaviors) are worth referring to. In fact, whether it is the historical bull market cycle or the current bull market cycle, Bitcoin has dominated most of the time (theoretically more than 90% of the time). Except for a few projects in some special hype areas (such as the AI concept in this cycle has risen for several rounds in a row), most Altcoin will perform poorly in a complete cycle. On the contrary, it is in the final stage of the bull market that Altcoin are most likely to perform well.
In other words, although the overall performance of Altcoin is not very good in this cycle due to serious dilution and other issues, the market value of TOTAL2 has not even exceeded the high point of the previous bull market, as shown in the figure below.
Judging from the current performance of Bitcoin dominance (BTC.D), we seem to be in a more interesting stage. If Bitcoin can continue to hit a new high in the second round similar to the previous bull market (compare the current market with the market in September 2021), then there is a high probability that Bitcoin's dominance will decline. At that time, we will have the opportunity to see the fourth mini-altcoin season opportunity, and TOTAL2 will reach a good position again (but considering the problems on the chain in this cycle, the current TOTAL indicator may be different from the TOTAL in the historical cycle. We have already shared and discussed this in the article on February 3).
The traditional altcoin season in the impression of old investors: When the altcoin season comes, it seems that almost all coins are rising. It is no exaggeration to say that you can make money by buying them with your eyes closed on OK or Binance at that time.
The mini altcoin season that began in this cycle means that there will no longer be a chance for the comprehensive and spectacular scene of the traditional altcoin season. We will only see some of the leading Altcoin with stories perform well, while most of the Altcoin(especially various on-chain meme projects on the chain) will not only fail to set new highs, but will also go on the road to zero.
In addition, from the performance level, the mini-altcoin season of this cycle can be roughly divided into several main stages. The initial stage focused on the hype and popularity of individual "new concepts" such as AI and inscriptions. The mid-term stage focused on the hype and popularity of SOL + Memes. In theory, it will enter (or has already entered) the late stage. This stage is currently focusing on individual narrative areas with stories to tell, such as Stablecoin and RWA.
This division is actually quite clear. That is to say, in addition to Bitcoin, if you want to allocate some positions in Altcoin again, it is best to focus on narrative areas such as Stablecoin, RWA, etc., and we also mentioned in the article a few days ago that the current popularity of the Stablecoin concept is being reflected in the stock market. If funds (hype) have the opportunity to return to the crypto market in the future, then now is still a good time for you to continue your research, because when Bitcoin is consolidating at a high level, when Altcoin have made most people lose hope, when more and more people leave the crypto market and go to speculate in stocks... this may be your new opportunity. Taking Stablecoin as an example, stablecoin-related projects such as AAVE and ENA will still have room for performance.
Of course, we still say the same old thing in the previous article. If there are new performance opportunities for Altcoin in the third quarter (or fourth quarter), then you must pay attention to timely profit-taking as much as possible (that is, convert your Altcoin into BTC or USDC). Opportunities and risks are often proportional. A surge is for a better plunge, and a plunge is for a better surge. In the later stage of the bull market, it is more important to maintain profits than to take higher risks to gamble.
The first half of 2025 has ended so badly. I hope that we can continue to stay focused, thoughtful, and patient in the second half of the year. Although many people now say that "crypto is dead", in fact, it may only be the positions of some people that are "dead". Although the crypto market has been developing for 17 years so far (starting from the appearance of the Bitcoin white paper in 2008), the simple "violent dividend period" and "barbaric development period" are passing or becoming history, but in comparison, this field is still one of the few opportunities for ordinary people.
That’s all for today. The sources of the images/data cited in the text have been added to Notion. The above content is only personal opinion and analysis, and is only for learning records and communication purposes, and does not constitute any investment advice.
