Continuously accumulate wealth through the compound interest effect of time.

We’re entering a new paradigm for crypto - either adapt or die.

Here’s how I’m approaching the market in 2025 to keep building wealth in uncharted waters.

Before I get into my strategy, let’s firstly address the opening statement of this thread.

There are 2 reasons why I believe the 4-year cycle is dead.

1. Halving effect weakened

Over-time, the relative impact of the halvings diminish, as the reduction in issuance gets continuously slashed in half.

The reason the halving was so powerful in 2012 and 2016 is because the issuance reduction was 50% and 25% respectively.

Compared to the 2024 halving, which was 6.25%, you can see why the halvings aren’t having the same impact on price anymore.

2. ETFs change the rules of the market

Secondly, there is one major variable on the demand-side which has permanently changed the game: The $BTC ETFs.

(A Bitcoin ETF is a financial instrument that allows investors in traditional financial markets to invest indirectly in Bitcoin.)

They’re the most successful ETF launches in HISTORY.

Demand has exceeded everyone’s expectations.

But, this demand has fundamentally changed the crypto market, and with it, abolished many of the old market expectations/adages (the 4-year cycle being one of them).

But it’s BIGGEST impact has been on the altcoin market - let me explain.

You’ve probably seen this image countless times.

And this was true in 2021.

But there are two fundamental reasons why it’s now defunct.

There is No Longer Bitcoin Wealth Effect

In 2017 and 2021, you had rich Bitcoin whales who would rotate down the risk curve, into alts on CEXs, with their profits.

But now, because the majority of new flows are coming via the ETFs - these profits never touch the altcoin market.

This has fundamentally changed the way liquidity flows in the space.

Retail have skipped phases 2 (ETH) and 3 (majors) altogether

Retail have skipped phases 2 (ETH) and 3 (majors) altogether, and are instead opting to play on-chain casino games (Pump Fun).

There was already less retail this cycle than 2021, due to macro conditions, and how many people got rekt last cycle via LUNA/FTX/BlockFi/Voyager etc.

But the remaining retail who ARE still playing the game, are jumping straight on-chain and skipping the majors.

You can read my in depth thoughts as to how this has affected the market here:

So if I’m correct, and the cycle theory is dead, then what does it mean for markets going forward?

Well I’ve got both bad news, and good news.

The bad news: It’s now harder to make lazy money. This is a natural sign of an industry maturing.

There are actually more trading opportunities now, but if you’re still following the 2021 approach of holding a bunch of alts and waiting for a magical “alt season” - expect to underperform.

The good news: Just as there’s no 4-year cycle, this also means there won’t be painful multi-year bear markets either (triggered by crypto specific variables - of course it’s possible from a macro POV, as crypto doesn’t operate in a vacuum and we are more correlated to macro than ever before).

Risk on vs risk off periods in the market are likely going to be driven by changes in macro conditions, which trigger mini echo-bubbles, as opposed to a multi-month up-only-esque rally.

Within these bubbles, there are tons of opportunities to make money.

In 2024, we saw memes in November, AI in December, agents in January, and there will no doubt be another trend which emerges soon.

If you’re savvy, these are great money making opportunities - but require a slightly different approach than past cycles.

So this leads me to the next section of this thread: My strategy.

I had dinner with @gametheorizing the other night, and he made a great point.

Everyone is so focused on an end goal: Whether it be 5xing, 10xing or 20xing their portfolio.

BUT, it’s actually better to adopt a mindset where you simply focus on making multiple smaller bets vs one big hail mary.

A bunch of small wins over a sustained period of time = a much bigger long-term win overall.

So instead of going all-out trying to “make it” by relying on “alt season” to multiply your portfolio, try and consistently compound wealth over time.

Small bet > take profits, another bet > take profits and so on.

There’s a reason why so many of crypto’s greatest traders/minds are ex-poker pros (Jordi included), because it teaches you to think in bets and consider the probabilistic outcomes of each trade.

The way I’m structuring my portfolio is 50% long-term high conviction plays, and 50% allocated in stables/active trades, which I use to go in-and-out of opportunities as they arise.

I’m denominating all my trades in stables as a metric to judge my success over time, taking profits back into stables every time I exit a trade.

If you’re holding a bloated crypto portfolio, and are unsure of how to maneuver - last week I wrote a guide on how you can adapt your portfolio to the changing market conditions.

One of the key points I highlighted in this post is the importance of having an INVALIDATION criteria for each trade, just as you would have a validation for why you’re buying a coin in the first place.

I see far too many people entering positions with absolutely no concept of risk management/invalidation.

If there’s one tip that you can implement right now, that will drastically improve your profitability going forward, it’s the importance of having a technical and/or fundamental invalidation for each position.

Your conviction/time horizon of a specific trade may impact where/how you invalidate, but it doesn’t change the fact that you need a plan in place.

Although we may not be exactly following past cycles, I’m still optimistic that with the right mindset and approach, there is still lots of upside in 2025.

Even though we are currently in a bear phase, momentum at some point will shift and create many new opportunities.

Your goal until then is to survive. Crypto rewards those who are able to stay in the game despite enduring volatility.

Disclaimer：

1. This article is reprinted from [TechFlow]. Forward the Original Title‘Say goodbye to the 4-year cycle, how to continue to make profits in the new crypto landscape in 2025?’. All copyrights belong to the original author [Miles German]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.