Macro Interpretation: The year 2024 has come to a close, and during this year, the Global financial markets experienced multiple reversals and discrepancies from expectations, shifting from loose trading at the beginning of the year to Trump's trading by the end of the year, with the market's main line frequently changing. Against this backdrop, we further interpret the main line of the market in 2025 and focus on analyzing its impact on the cryptocurrency market.

I. Review of Market Characteristics and Trends in 2024

The Global asset market in 2024 appears chaotic, yet it contains certain规律与特征.

(I) Strong performance of US stocks, with Technology leaders leading the way.

US stocks continued to perform excellently in 2024, especially the leading Technology stocks. The Nasdaq index rose by 31%, significantly leading the S&P 500 and Dow Jones Industrial Average. Within the Technology Sector, the telecommunications and information technology fields benefited from profit support, leading the increases. Furthermore, Large Cap stocks outperformed Small Cap stocks, with a prominent concentration effect, as represented by MAAMNNG, whose Technology leaders rose by 50%, driving the overall market upwards.

(II) The dollar stands out, with Global capital reallocation.

The USD rose by 7% in 2024, reaching a high point since November 2022, reflecting the relative advantages of the USA economy. Emerging Markets currencies depreciated generally, while Global capital flowed into US stocks and Bonds, significantly outpacing other markets. The logic behind this is the resilient growth of the USA economy, particularly the strong performance in the Technology field.

(III) Gold rises against the trend, with increased demand for safe-haven assets.

Gold prices remained strong in 2024, once breaking through $2,800 per ounce, rising 21% for the year. This diverges from the rising trends of US bond rates and the dollar, largely driven by overseas risk aversion and de-dollarization trends. The increase in gold further supports the logic of a stronger dollar.

(4) CSI Commodity Equity Index lagged, and US growth was not a global improvement.

The performance of the CSI Commodity Equity Index lagged in 2024, with both Copper and Crude Oil Product prices retreating. This reflects that US economic growth is more concentrated in the Technology sector, rather than a global improvement. Other markets have not yet recovered, which also affected the performance of commodities.

(5) US bond rates are 'swinging', with fluctuating expectations for interest rate cuts.

US bond rates experienced multiple swings in 2024, rising above 4.7% in the first quarter, touching a low of 3.6% in the third quarter, and then recently rebounding to 4.6%. This change was driven by recurring expectations for interest rate cuts, indicating that US economic growth does not face much pressure and does not require many rate cuts.

2. Reasons for the 'expectation gap' in the 2024 market.

Several consensuses in the 2024 market have shown significant deviations, with the root of these deviations being:

(1) Linear extrapolation and static thinking.

The market overly linearly extrapolates in the absence of a trend, leading to deviations in expectations regarding interest rate cuts, the USD trend, and the performance of US Stocks. At the same time, when a trend exists, it emphasizes mean reversion, neglecting the dynamic changes in the interest rate and growth environment, thereby missing allocation opportunities.

(2) Ignoring the relative changes in costs and returns.

When evaluating US Stock valuations, the market often overlooks the offsetting effect of the short-term natural interest rate rise on risk premiums, resulting in a too pessimistic judgment of the upside potential for US Stocks.

3. Analysis of the market's main line in 2025.

Based on a review of the market characteristics and patterns in 2024, we believe the key aspects of the market's main line in 2025 lie in two areas: whether the internal situation in the USA can diffuse, and whether the USA and the external environment can converge.

(1) Can the internal situation in the USA diffuse?

If the growth points in the USA can diffuse, it signifies a restart of the credit cycle and a recovery of pro-cyclical sectors, which will boost the fundamental outlook for the US economy and the performance of US Stocks. In terms of asset performance, the USD may still remain strong, with the Dow Jones Industrial Average, representing cyclical styles, showing greater elasticity. If growth points fail to diffuse, reliance will still be on Technology trends, but growth fluctuations may increase.

(2) Can the USA and the external environment converge?

If the USA and external markets can converge, it means that other markets are gradually recovering and the growth gap with the USA is narrowing, which will bring greater resilience and opportunities. The relative decrease in growth advantage may weaken the USD, and funds may flow to other markets. If convergence does not occur, it indicates that the recovery in other markets is weak, and the expanding growth gap will continue to boost the USD.

IV. Analysis of Key Variables:

(1) The sequence and extent of the implementation of Trump's policies.

The sequence and extent of the implementation of Trump's policies will directly affect growth and the direction of asset trades. If overly aggressive policy implementation leads to a significant rise in inflation, the pace of interest rate cuts may be further postponed. Therefore, it is necessary to closely monitor changes in Trump's policies.

(2) The impact of the AI trend on US Technology Stocks.

The trend of the AI industry currently plays a significant supporting role for US Technology Stocks, and AI-related capital expenditures are also a major component driving fixed asset investment. If the AI industry trend continues and profits gradually materialize, then the US Technology Sector will continue to boost the US stock market and growth.

V. Analysis of the Impact on the Cryptocurrency Market:

The cryptocurrency market has become an important component of the Global financial market in recent years, attracting a large number of investors due to its volatility and high returns. In 2024, Bitcoin leads Global assets with a 122% increase, demonstrating the tremendous potential of the cryptocurrency market. Looking ahead to 2025, we believe the cryptocurrency market will be influenced by the following factors:

(1) The influence of USD trends.

As the world's primary reserve currency, the trend of the USD significantly impacts the cryptocurrency market. If the USD strengthens, it may lead to some funds flowing out of the cryptocurrency market in search of safer options.Its price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve.Conversely, if the USD weakens, it may attract more funds into the cryptocurrency market.

(2) The influence of global economic growth.

The improvement in global economic growth will boost investor confidence, driving more funds into risk assets, including the cryptocurrency market. At the same time, as the global economy recovers, the application scenarios of blockchain technology will continue to expand, providing more growth momentum for the cryptocurrency market.

(3) The influence of regulatory policies.

Countries' regulatory policies toward the cryptocurrency market will directly affect its development prospects. If the regulatory policies become more lenient, it will be beneficial for the innovation and development of the cryptocurrency market. Conversely, if regulatory policies tighten, it may suppress the vitality of the cryptocurrency market.

Conclusion: The main theme of the market in 2025 will revolve around internal diffusion and external convergence in the USA. The order and extent of the implementation of Trump policies, as well as the impact of AI trends on US Technology Stocks, will directly influence market trends. For the cryptocurrency market, factors such as the movement of the USD, global economic growth, and regulatory policies will jointly shape its development prospects. Closely monitor changes in these factors to seize future investment opportunities.

BTC Data Analysis:

The total BTC Futures contracts open interest has decreased to 112 billion USD, down about 18.3 billion compared to the peak on December 8.

Meanwhile, since the trading volume peaked at nearly 500 billion USD on November 13, CoinAnk data shows it has now decreased to 114.4 billion USD. As the saying goes, excessive volume leads to excessive prices, and the price of Bitcoin reached a new high of over 108,350 USD on December 17. In this round of adjustments, both trading volume and open interest peaked before the BTC price, serving as a potential leading indicator for reference.

Therefore, if predicting the Bitcoin price for 2025, paying attention to the changes in the scale of contract open interest and trading volume may provide price discovery effects 10-30 days in advance.

CEX on-chain Bitcoin balance shows a continuous downward trend. CoinAnk data indicates that the current balance is 2.2087 million BTC, reflecting a change in investors' holding strategies for Bitcoin. Investors are increasingly inclined to transfer Bitcoin to personal wallets, which may represent confidence in Bitcoin's long-term value storage, especially against the backdrop of increasing market volatility.

The short-term balance of Bitcoin first rises and then decreases, which may be related to the market's dual expectations of Bitcoin's price short-term volatility and long-term growth potential. During price fluctuations, investors may transfer Bitcoin to personal wallets to avoid potential market risks. At the same time, long-term holders may wait until the price reaches their psychological expectations before trading, which helps reduce selling pressure in the market, potentially having a positive impact on the stability of Bitcoin's price.

This trend has a dual effect on market liquidity. On one hand, the decrease in exchange balances may reduce the market's immediate liquidity, as the amount of Bitcoin available for trade decreases. On the other hand, the increase in long-term holders may improve market stability, as these holders are less likely to sell Bitcoin during market fluctuations. This data also illustrates the maturity of Bitcoin market participants' behavior and the evolution of market structure.