Executive Summary

The first half of 2025 unfolded amid macroeconomic turbulence and structural shifts in the global financial system. Escalating trade tensions and uneven economic recoveries pushed several central banks toward monetary easing, while the U.S. Federal Reserve held rates steady at historically elevated levels. Despite these headwinds, real-time inflation indicators like Truflation show inflation decelerating, opening the door for rate cuts in the second half of the year.

The U.S. Dollar Index (DXY) fell below the key psychological level of 100, reflecting improving global risk sentiment and rising expectations of U.S. monetary easing. Meanwhile, Bitcoin’s tight correlation with global M2 liquidity suggests an easing of macro liquidity conditions and a setup for a renewed crypto rally in Q3 and Q4. Supporting this view are strong inflows into Bitcoin Spot ETFs — over $137 billion in AUM — led by institutional allocators. In contrast, Ethereum ETFs have yet to see significant traction, a lag we expect to reverse as ETH-specific fundamentals (e.g., staking, Pectra upgrade) gain wider institutional understanding.

On-chain indicators reinforce the bullish setup: long-term Bitcoin holders are accumulating, miner revenues remain stable, and the market continues to hover in a historically favorable zone according to the Puell Multiple and Moving Average Heatmap.

Beyond crypto price action, Q2 marked a turning point for stablecoins and tokenized assets. The passing of the U.S. Genius Act, the IPOs of Circle and Galaxy Digital, and major stablecoin integrations (e.g., Shopify x Coinbase) signal that stablecoins are entering the mainstream. Meanwhile, tokenized equities and regulated on-chain capital formation are becoming reality — ushering in the next phase of blockchain-based financial infrastructure.

Our Thoughts on the Current Environment

The first half of the year started quite turbulent, shaped by renewed international trade tensions, rising tariffs, and uneven economic recoveries. In response, several central banks implemented additional rate cuts to stimulate growth and counter deflationary pressures. However, despite these efforts, long-term interest rates in the U.S. remain high, reflecting persistent structural concerns around inflation, fiscal sustainability, and global capital flows.

The U.S. 10-Year Treasury yield remains elevated, recently fluctuating around 4.00–4.55%. While the Federal Reserve has signaled potential rate cuts later this year, long-duration yields continue to price in structural inflation risk and persistent fiscal deficits.

As the U.S. prepares to refinance over $9 trillion in maturing debt in 2025, sustained high yields are both a reflection of market caution and a pressure point on risk assets. We expect any material decline in yields to be gradual, and largely dependent on declining core inflation and reduced geopolitical risk.

According to Truflation’s real-time inflation index, U.S. inflation stands at approximately 1.46%, significantly below headline CPI and near the lower end of its 12-month range.

This continues to open space for accommodative monetary policy. Importantly, inflationary pressures from supply chains and wage growth have subsided, while tariff-related noise should remain a short-term distortion. This trend strengthens the case for a more constructive environment for risk-on assets in H2 2025.

The Federal Reserve still holds the benchmark rate at 4.25% — 4.50%. Their June statement and dot plot imply two cuts by year-end, conditional on continued inflation moderation. Market participants are currently pricing in a 70% probability of a first rate cut by September. Our view remains that monetary easing is imminent, especially if inflation remains anchored.

The DXY has recently broken below the psychologically important 100 mark and currently trades near 96 — its lowest level since early 2022. This decline marks a notable shift in market sentiment, reflecting easing demand for the U.S. dollar amid improving global risk appetite and expectations of rate cuts by the Federal Reserve. A sustained move below the 95 level could further accelerate capital rotation into risk-on assets. In this context, the recent dollar weakness acts as a tailwind for crypto markets and supports the thesis for a Q3/Q4 rebound.

The relationship between Bitcoin and global M2 liquidity remains one of the most consistent long-term signals in the macro-crypto landscape. Following a peak in late 2021 and a bottoming through 2022, we saw an uptick early 2023 and again late 2024. Forward-looking indicators (12-week lead chart below) point to a gradual liquidity expansion, driven largely by monetary easing by major central banks. Historically, these conditions have preceded major Bitcoin uptrends, typically with a lag of one to two quarters. In line with this pattern, we maintain a base-case scenario for a renewed rally in Q3 and Q4 of 2025.

Furthermore, Bitcoin Spot ETFs have since their deput attracted over $137 billion in AUM, with net inflows remaining strongly positive throughout Q2. Driven by demand from institutional investors, pension funds, and family offices. The largest flows were into BlackRock’s IBIT and Fidelity’s FBTC. These flows validate Bitcoin’s status as a macro asset and institutional-grade vehicle. Our strategy remains focused on frontrunning the next ETF waves — namely altcoins and staking-based assets.

Ethereum ETFs have yet to see meaningful demand, even as broader crypto markets have begun to recover. This reflects weaker institutional conviction in ETH at this stage, especially given underperformance vs. BTC since mid-2023. We interpret this as temporary. Once staking mechanics and the “Pectra” upgrade are better understood by institutions, sentiment could shift rapidly.

An important milestone was set early July, the first U.S.-listed Solana Staking ETF debuted, offering investors direct exposure to SOL with native staking rewards built in. This milestone marks a significant shift — moving beyond Bitcoin and Ethereum — and signals growing institutional appetite for alternative Layer 1 assets. We expect this to be the first of several altcoin-focused ETFs to follow in the coming quarters.

Looking at long-term investors in Bitcoin, recent data shows a sharp increase in Long-Term Holder Supply, with LTH wallets accumulating steadily since March. Conversely, Short-Term Holder Supply is in decline, suggesting that speculative flows are being replaced by structurally motivated positioning. Historically, such dynamics have preceded major price increases within 3–6 months. The current behavior mirrors early accumulation phases seen in 2016 and late 2020, where new bull cycles rapidly evolved under similar on-chain supply conditions. This provides a strong foundation for a Q3 breakout in Bitcoin and later, altcoins.

Crypto Outlook & Cycle Indicators

To gather a broader understanding of the current Bitcoin and overall crypto cycle we are observing a set of on-chain indicators, some of which you will find below. These set of indicators provides a perspective of buying & selling pressure, velocity of coins transferred, value of coins transferred and average price movement range.

The chart above provides a detailed view on the value of coins being transferred. By adding a multiplier to coins being held longer on the same wallet we can clearly see the timeframes where long term holders sold their holdings (red peaks) and the timeframes when only short term holders are selling (green areas). Since long term holders and institutional investors are heavily buying at the moment we clearly witness the current market in the lower orange zone.

Looking further at the Bitcoin Puell Multiple, this metric looks at the supply side of Bitcoin’s economy — Bitcoin miners and their revenue.

It explores the market cycles from a mining revenue perspective. Bitcoin miners generally need to cover fixed costs of mining hardware and energy consumption in a market where price is extremely volatile. The revenue they generate can therefore influence price over time. The Puell Multiple is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365- day moving average of daily issuance value.

It therefore indicates when miner revenues in USD terms are significantly higher than historical norms — providing advantageous profit-taking.

So the Puell Multiple can be a useful tool to identify whether price is too high and needs to drop (when the indicator is in the red zone), or whether it is too low and may need to bounce (indicator is in the green zone).
At the moment we find ourselves in the middle of both areas where we usually stay during the upwards trend of a cycle.

The Bitcoin Moving Average Heatmap (below) tells us where the Bitcoin price is in comparison to the typical bandwidth and how fast it is increasing in price compared to the baseline.

Since faster rising prices need substantially more new capital inflows each week the price surges continue, the chart indicates times where further positive price action can no longer be sustained. In the past these times were indicated by yellow and/or red dots and reliably marked the cycle tops.

The actual chart still shows deep blue dots signaling a healthy long term price increase for the moment.

Stablecoins — The Killer App of Crypto in Q2 2025

Stablecoins at an Inflection Point

In Q2 2025, stablecoins have emerged as crypto’s breakout use case — not only within digital assets but as a transformative force in global finance. Nearly a decade after their inception in 2014, regulatory clarity, institutional backing, and infrastructure maturity have aligned. Many now call this crypto’s “ChatGPT moment” for payments: a widely understood and impactful demonstration of utility.

No longer limited to DeFi or on-chain traders, stablecoins are now essential payment rails for businesses, a cost-saving upgrade for banks and fintechs, and a financial lifeline for unbanked populations. Their unique ability to combine blockchain’s speed with fiat stability — especially the U.S. dollar — makes them exceptionally powerful.

Q2 Highlights: Regulation, Adoption, and Growth

Regulatory Tailwinds: Genius Act Passed
In June, the U.S. Congress passed the Genius Act, a landmark law creating a federal framework for fiat-backed stablecoins. With clear reserve, audit, and licensing standards, the U.S. has positioned stablecoins as a strategic tool to digitally export the dollar.

IPO Momentum: Circle and Galaxy Go Public
Circle (issuer of USDC) and Galaxy Digital listed on public markets this quarter, signaling sector maturity and providing investors exposure to the stablecoin ecosystem.

Merchant Adoption: Shopify x Coinbase
Shopify integrated stablecoin payments via Coinbase Commerce, allowing thousands of merchants to accept USDC globally. Lower fees and instant settlement make this an attractive alternative to legacy networks.
Banking & Fintech Participation
Banks and fintechs are increasingly building or integrating stablecoins to cut settlement times, reduce costs, and expand access beyond traditional infrastructure.

Geopolitical Stakes: A Digital Dollar Offensive

The U.S. is driving stablecoin adoption as part of a geopolitical strategy. Dollar- backed stablecoins expand global demand for U.S. Treasuries and strengthen the dollar’s role as the reserve currency — this time on-chain.
In contrast, Europe is reacting. EU regulators and central banks recognize that unless they accelerate a euro-stablecoin initiative, dollar dominance may deepen further. A credible EUR stablecoin push is likely within 12–18 months. The global stablecoin race is emerging as a defining financial battleground, with the winner exporting not only its currency but also financial infrastructure and standards.

Expanding the Total Addressable Market of Finance

Stablecoins decouple currency access from bank accounts, offering financial inclusion at smartphone scale. They eliminate borders, reduce costs, and make global payments radically faster.

This has wide-ranging effects:
Businesses cut settlement costs and improve efficiency.
Consumers gain access to global markets and dollar stability.
Capital moves on-chain, increasing liquidity and innovation.
Q2 2025 shows these dynamics are no longer theoretical — they are starting to scale.

Tokenization and the On-Chain GDP Thesis

Stablecoins pave the way for tokenizing treasuries, commodities, equities, and real estate. Though the idea isn’t new, viable infrastructure and liquidity are finally here.
Early signs point to tokenized U.S. Treasuries gaining traction as yield-bearing products for crypto investors. Real-world asset (RWA) tokenization is poised to be the next wave, driven by accessibility and capital efficiency.

The stakes are immense:
Crypto’s market cap stands at ~$3 trillion versus ~$900 trillion in global assets. Even a small migration on-chain could unlock a generational opportunity for investors aligned with this megatrend.

Internet Capital Markets — The Next Evolution of On-Chain Finance

The Vision of Internet Capital Markets

Stablecoins have laid the groundwork for a global payment layer; now crypto is enabling the next leap: Internet Capital Markets. This vision describes a permissionless, always-on financial system where capital forms and flows instantly — without the bottlenecks of geography, intermediaries, or legacy rails.

A defining crypto property became clear in 2024, even amid memecoin hype: instant capital formation. Communities raised millions in minutes, showing how crypto can aggregate global liquidity directly from users. This was the signal beneath the noise — a fundamentally new mechanism for financing innovation. Unlike traditional fundraising, which depends on institutional gatekeepers and months of roadshows, crypto-native rails let projects tap global liquidity in real time. It’s more than a technical upgrade; it’s a structural shift in capital markets.

Q2 2025: From Tokenized Funds to Tokenized Equities

2024 brought the first wave of tokenized funds, with BlackRock and Franklin Templeton testing on-chain money market products. While still modest in size, these launches validated that blockchain infrastructure is ready for institutional-grade assets.

In Q2 2025, tokenized equities gained momentum:
Kraken’s XStocks offers tokenized shares of public companies with 24/7 trading, lower fees, and access to private equity previously reserved for VCs. Robinhood unveiled its own RWA-focused Layer 2 network for tokenizing traditional assets, alongside tokenized equity products for its retail user base. These moves signal that mainstream fintechs are embracing blockchain not only as a trading venue but as core infrastructure for capital markets.

ICO 2.0: A Regulated Alternative to Venture Funding

The ICO wave of 2017 showed crypto’s potential to democratize fundraising but was plagued by scams and regulatory gaps. Now a regulated ICO 2.0 is emerging: compliant token offerings that let projects raise capital globally while protecting retail participants.

Crypto represents the first-principles best way to raise capital — borderless, efficient, and open to anyone with a wallet.

The Opportunity Ahead

Internet Capital Markets will not only bring traditional assets on-chain but unlock entirely new categories: human time, attention, and behaviors. They promise:
• Ultra-low fees and instant settlement.

• Maximum capital efficiency through atomic composability across protocols.

This isn’t about replicating Wall Street on-chain — it’s about creating a digital- native financial system designed for inclusivity and speed.

Conclusion

Q2 2025 highlighted the structural convergence of macroeconomic inflection, crypto-native innovation, and institutional adoption. While the first half of the year was defined by caution — elevated U.S. yields, global trade instability, and selective risk appetite — underlying indicators now point to a maturing investment environment for digital assets.

Crypto is no longer an isolated sector — it is being integrated into global capital markets. The proliferation of Bitcoin ETFs, the emergence of Solana staking products, and stablecoin adoption across commerce and fintech ecosystems reveal a new layer of infrastructure being built beneath the surface. This infrastructure is not speculative; it is functional, increasingly regulated, and designed to scale globally.

The weakening U.S. dollar and anticipated liquidity expansion reinforce a historical pattern: Bitcoin and risk-on crypto assets tend to outperform in the quarters following monetary pivot points. On-chain accumulation by long-term holders, coupled with low realized selling pressure, suggests that we are still in the early innings of the next cycle.

Moreover, we are witnessing a renaissance in crypto’s utility stack. Stablecoins are no longer just a DeFi mechanism — they are becoming the rails of a digital dollar strategy, with geopolitical and commercial consequences. Likewise, the growth of Internet Capital Markets — real-time, borderless, permissionless capital formation — is redefining how financial value is created, distributed, and accessed.

This is not a narrative-driven rally. It is a technologically grounded, institutionally reinforced transition toward a blockchain-powered financial system.

At VIRA Ventures, our positioning reflects these dynamics:

We are allocating toward yield-bearing, ETF-prepositioned altcoins.
We are building exposure to stablecoin and AI-powered infrastructure layers. And we continue to use macro volatility as an opportunity to deepen long- term, high-conviction positions.

We believe the second half of 2025 will reward those who’ve stayed focused on structural trends over short-term noise. In a market moving from speculation to adoption, from narrative to utility, now is the time to position with clarity and discipline.

If you are interested to learn more about our service & investment opportunities visit us at www.vira.ventures.

Rethinking intelligence through the lens of incentives, networks, and permissionless innovation.

Markets reward what works. And what works at scale is rarely what looks good on a pitch deck.

Crypto is not just a database. Nor is it merely a speculative asset class. It is the most efficient coordination mechanism ever discovered — capitalism distilled into code, with incentives sharpened into atomic precision. A token is not a currency; it is a gravitational field. A well-designed cryptoeconomic system warps the behavior of thousands toward a single objective: progress.

Bitcoin organized global monetary consensus with no leaders. Ethereum built a parallel financial and developer ecosystem without hiring a single engineer. Solana scaled throughput and mindshare with the memecoin mania. These are not random anomalies. They are proof points of a deeper truth: that incentive-aligned networks outperform hierarchies when scale, speed, and adaptability matter.

AI is hitting bottlenecks. Not in model size — in model scaling. The frontier is no longer in building bigger LLMs. It is in orchestrating the right data, talent, and compute faster and better than anyone else. And centralized orgs — even the best funded — are fundamentally bottlenecked by their own structure: hiring cycles, internal politics, data moats, resource misallocation.

We believe crypto offers a fundamentally superior architecture to solve this. At its core, cryptoeconomic systems are real-time optimization engines. They find global optima by rewarding local contributions. They turn human and machine behavior into market dynamics — a force multiplier for progress.

This is not a narrative play. It is an architectural one.

To understand why, consider what producing world-class AI requires:

1. Orchestrating brilliant minds and compute at global scale.
2. Optimizing every layer of the AI stack — from data pipelines to inference markets — faster than the next player.

Cryptonetworks solve both.

1. Talent Coordination Without Borders

Tokens transform contributors into owners. This creates aligned, compounding incentives no salary or ESOP can match. A contributor with skin in the game ships faster. A network that rewards open competition unlocks global intelligence that corporate org charts never even see.

In traditional AI orgs, breakthroughs are made by salaried teams, filtered through management, and budgeted by quarterly roadmaps. In crypto-AI networks, breakthroughs are made by whoever has the best idea and fastest execution — regardless of credentials, location, or org structure.

Think Kaggle, but with real capital flow and lasting ownership.

2. Economic Feedback Loops at Warp Speed

Blockchain economies operate on feedback cycles measured in days, not quarters. A surge in onchain activity creates higher fees, which drive up token prices, attracting new users, builders, and investors. The result is an economic flywheel that outpaces traditional product-market cycles.

The recent memecoin explosion on Solana wasn’t just speculative fluff. It rebooted the chain’s economic engine: TPS surged, fee revenue spiked, developer activity reignited, and SOL appreciated — drawing in more capital, more users, more devs.

This same reflex loop applies to crypto-AI systems. Networks that tokenize data curation, inference, labeling, or training contributions will rapidly self-optimize based on usage, demand, and market rewards.

3. Permissionless Infrastructure > Centralized Chokepoints

Today’s AI infrastructure is highly centralized: compute access is gated, datasets are siloed, and distribution is owned by a few mega-platforms.

Crypto enables permissionless access at every layer:

• Compute marketplaces
• Data networks
• Inference protocols
• Contribution tracking and reputation layers

This turns AI development into an open ecosystem rather than a walled garden — one where participation isn’t granted but earned, and innovation is not planned but emergent.

4. Specialization and Modular Swarm Intelligence

Centralized orgs struggle with specialization. Crypto networks thrive on it.

A protocol can incentivize hyper-focused micro-agents: one network optimizing model weights, another sourcing long-tail datasets, a third benchmarking outputs for truthfulness. As composability increases, these modular agents begin to self-organize into higher-order intelligence systems.

This is swarm intelligence at market scale — the Cambrian explosion of agent economies.

Why Most Will Miss This

Structural shifts never feel obvious while they’re happening. Especially not in bear markets.

When crypto feels quiet, people assume it’s dead. But these are the phases when foundational experiments are built — often ignored until their impact is too large to miss. Remember: Bitcoin was born in the shadow of the 2008 crisis. Ethereum rose while the mainstream dismissed smart contracts as vapor.

Today, decentralized AI protocols are quietly bootstrapping — attracting early contributors, allocating tokens, refining incentives. The momentum is real, even if the sentiment isn’t.

We believe the convergence of crypto and AI is not a trend. It’s a transformation.

A shift from closed labs to open networks. From corporate bottlenecks to global competitions. From permissioned access to permissionless emergence.

And most importantly: from engineered intelligence to market-driven intelligence.

At Vira Ventures, this is not just a thesis — it’s a position.

We invest in these primitives through our Blockchain Select AMC, providing qualified investors with access to the most promising building blocks of the decentralized intelligence economy.

If you’re thinking on this frequency — let’s talk.

Executive Summary

The year began with optimism, but persistent high U.S. bond yields and upcoming refinancing pressures are tempering expectations. The Federal Reserve’s rate cuts have had limited impact so far, with two more cuts anticipated in 2025. While inflation remains low, geopolitical and tariff-related risks are being used to cool market sentiment.

A strong U.S. dollar continues to suppress risk-on assets like Bitcoin. However, indicators such as rising global M2 liquidity, stable employment, and upcoming easing suggest improved market conditions ahead — likely starting in May.

In crypto, Bitcoin has shown resilience despite a rough Q1. Long-term holders are accumulating, suggesting potential upside within 3–6 months. On-chain indicators like the Puell Multiple and Moving Average Heatmap support a healthy, sustained uptrend. ETF inflows into BTC and ETH, though volatile, remain net positive, while altcoins may soon benefit from improving macro conditions.

The convergence of crypto and AI is also accelerating, with DePIN and autonomous agent systems gaining traction. Key events this year — including Ethereum’s Pectra upgrade, Solana’s Firedancer launch, and potential Solana Spot ETFs — highlight growing institutional involvement.

Conclusion: With rising liquidity, a potentially weakening dollar, and strong on- chain signals, Q2 is shaping up to be a more bullish phase for crypto. While volatility remains, strategic positioning during drawdowns and a focus on long- term trends — not short-term noise — will be key. Crypto fundamentals have never looked stronger, and the broader adoption curve continues to steepen.

Our Thoughts on the Current Environment

The year started with quite a positive outlook in perspective of economic recoveries and market sentiment.
But as we covered in our last report, US Bond Yields showing that in the long end the FED’s interest rate cuts have not yet made the significant impacts as hoped. Since the US has to refinance about 9.2 trillion US dollars of maturing bonds in 2025 their clear goal is lower bond yields.

When looking at the chart beneath we can see the 10 Year US Bond yields still comparably high to their baseline of prior to 2020.
In order to induce more interest in US Bonds and not spark inflation again with coming quantitative easing measures, the US is using the current tariffs’ policies to create a risk-off sentiment to cool the markets down.

The actual inflation, regarding to Truflation, is about 1,46% — creating possibilities for more fiscal policies in the future. Regarding further interest rate cuts the US can rely on relatively stable unemployment rates demonstrating a still resilient economy. Frankly, we need to have a permanent eye on how this tariffs gamble will play out in the long run.

Since the beginning of interest rate hikes at the end of 2022 there have been already 3 interest rate cuts. For 2025 we are expecting at least 2 more cuts, depending on the economic conditions in the US.

When looking at the US dollar strength index (DXY) we see again relatively high numbers. Taking in consideration that the former Bitcoin cycle tops always occurred during the index touching the 90 points line, we are still in anticipation of a weaker Dollar and therefor a more bullish setup for risk-on assets.

For the DXY to fall we need lower rates, more liquidity and less uncertainty in the markets.

Having a look at the chart of Global Liquidity M2 the forward looking indicators (leading 12 weeks & 107 days) indicate more liquidity to come this year.

We are now in the phase between April and May where we are seeing a bottoming out of the liquidity drawdown. And since Bitcoin is historically following the M2 Liquidity chart very closely, we expect to see a still volatile April, before starting a new upwards trend around May.

The year’s beginning also witnessed a very volatile trend of BTC Spot ETF inflows which nonetheless have been overall net positive.

A similar picture we see with the Ethereum Spot Etfs, although there is much less interest in Ethereum, which has been in a downward trend since last year’s end.

Since the crypto market in general, same as the tech stocks market, has experienced quite a rough Q1 (as shown in the correlation chart of BTC to Global Liquidity M2 above) we are now seeing a strong shift in investors interest.

The chart below indicates intensified buying pressure from long term holders.

The orange line indicating the supply stock of long term holders’ wallets while the light red and light green areas show the areas of net selling and net buying pressure. Hence they strongly correlate with Bitcoin price action we can anticipate rising prices after approx. 3–6 months of intensified net buying action.

Crypto Outlook & Cycle Indicators

To gather a broader understanding of the current Bitcoin and overall crypto cycle we are observing a set of on-chain indicators, some of which you will find below. These set of indicators provides a perspective of buying & selling pressure, velocity of coins transferred, value of coins transferred and average price movement range.

The chart below provides a detailed view on the value of coins being transferred. By adding a multiplier to coins being held longer on the same wallet we can clearly see the timeframes where long term holders sold their holdings (red peaks) and the timeframes when only short term holders are selling (green areas). Since long term holders and institutional investors are heavily buying at the moment we clearly witness the current market in the green zone.

Looking further at the Bitcoin Puell Multiple, this metric looks at the supply side of Bitcoin’s economy — bitcoin miners and their revenue.
It explores the market cycles from a mining revenue perspective. Bitcoin miners generally need to cover fixed costs of mining hardware and energy consumption in a market where price is extremely volatile. The revenue they generate can therefore influence price over time. The Puell Multiple is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365- day moving average of daily issuance value.

It therefore indicates when miner revenues in USD terms are significantly higher than historical norms — providing advantageous profit-taking.

So the Puell Multiple can be a useful tool to identify whether price is too high and needs to drop (when the indicator is in the red zone), or whether it is too low and may need to bounce (indicator is in the green zone).
At the moment we find ourselves in the middle of both areas where we usually stay during the upwards trend of a cycle.

The Bitcoin Moving Averages Indicator (above) and the Bitcoin Moving Average Heatmap (below) tell us where the Bitcoin price is in comparison to the typical bandwidth and how fast it is increasing in price compared to the baseline.

Since faster rising prices need substantially more new capital inflows each week the price surges continue, the chart indicates times where further positive price action can no longer be sustained. In the past these times were indicated by yellow and/or red dots and reliably marked the cycle tops.

The actual chart shows deep blue dots signaling a healthy long term price increase for the moment.

More and more capital is moving on-chain
We’re seeing a clear and growing trend: capital is flowing into the on-chain economy. Whether it’s USTs, stablecoins, or tokenized assets, more value is moving into blockchain-based systems. This shift isn’t just hype — it reflects a real change in how people store and move money. While economic policies might slow it down or speed it up, they won’t reverse it. The train has left the station, and on-chain is becoming the new normal.

Altcoins tend to shine when the cycle turns
Historically, altcoins have seen their biggest moves when the broader business cycle starts turning up — especially when the ISM (Manufacturing Index) climbs above 50. That’s usually the point where economic momentum returns and financial conditions start to ease. Once quantitative tightening (QT) slows or stops and liquidity picks up again, investors begin to move further out on the risk curve. And that’s where altcoins thrive. We’ve seen it before: when markets open up, altcoins often start running hard. It’s one of the most exciting parts of the cycle — and we may be heading right into it.

Exciting developments at the intersection of crypto & AI
One of the most exciting areas right now is where crypto and AI meet. From infrastructure layers that support decentralized AI models, to the rise of AI- agent ecosystems that can operate autonomously using crypto rails, there’s a whole new tech stack being built. Add in DePIN (decentralized physical infrastructure networks), and you’ve got a powerful combination of AI, automation, and open networks all working together. It’s early, but the potential is massive — hence producing millions of transactions on blockchains.

Many fundamentally important events this year
2025 is stacked with big events that could shape the crypto landscape for years to come. On the tech side, we’ve got major upgrades like Ethereum’s upcoming improvements with the Pectra update and Solana’s Firedancer, which could massively boost performance. On the adoption side, things like potential altcoin ETFs are signaling a broader acceptance of digital assets. Many of the top asset managers like BlackRock, Fidelity, Grayscale, Franklin Templeton, and VenEck are already preparing their applications for new altcoin ETFs. The next ETF we expect to be launched is a Solana Spot ETF.

Conclusion

By taking the macroeconomic factors into consideration as the basic requirements for markets and investors’ sentiment and further complementing them with crypto market indicators, we aim to gather a broader view of the cycles health and times of possible overheating.

Taking into consideration the uptrend in global liquidity and a weaker dollar we anticipate a more positive investment environment in Q2 of 2025.

In addition, we would like to particularly mention the very possible drawdowns occurring during the uptrend of the cycle. In comparison to previous cycles (as in the chart below) we have not seen as many and strong drawdowns in this cycle as before. To take maximum advantage of these drawdowns we will further allocate portions of the cash position into each additional drawdown along the uptrend.

The indicators tell us that the market is getting ready for a more bullish environment as we head into Q2.

To conclude: As we advance further into 2025, the crypto landscape continues to be shaped by a dynamic interplay of macroeconomic shifts and evolving investor sentiment. While Q1 was still a bit rough and volatile, especially for tech and crypto markets, we’re now seeing positive signs starting to line up.

• Don ́t lose the big picture: We would not advise people to trade day-to-day unpredictable policy changes but rather focus on the secular technological trend and use weakness in the business cycle to add to longterm core positions.

•Whereas we had a weak start into trumps presidential term, historically markets tend to outperform at some point), we expect the same this time.

•Fundamentally crypto has never been stronger than now, national & institutional attention & policies to prioritze to adapt the technology.

The strategy remains the same: stay flexible, use data to guide decisions, and take advantage of pullbacks when they happen.

If you are interested to learn more about our service & investment opportunities visit us at www.vira.ventures.

Disclaimer

The following written content is exclusively for the purpose of education and knowledge transfer regarding current events in the crypto market (“market”). This applies in particular with regard to the blockchain projects described in detail as well as investment possibilities presented. These serve as illustrative examples of projects with technological potential based on the Blockchain.

In particular, they do not constitute (individual) investment advice, nor tax, legal or economic advice. Furthermore, the information provided and passed on is not an offer or advertisement to buy or sell financial products of any kind. Descriptions and details of presented projects refer to direct and freely accessible information from various media (especially, but not exclusively, from the Internet). VIRA Ventures LLC does not assume any responsibility for the correctness of the data (in particular regarding prices, volumes, quantitative facts about projects and the like). All assessments of VIRA Ventures LLC are marked as such and serve exclusively the context classification in the sense of a pure knowledge and news transfer. Estimates and opinions of VIRA Ventures LLC on the market are based on researched and analyzed information that is publicly available. All comments are made to the best of VIRA Ventures LLC’s knowledge and belief, but should at no time be understood as a call to action of any kind. They are purely for the purpose of conveying knowledge and information, and we may be mistaken in the assumptions made and statements made about the future. Furthermore, the information listed and mentioned does not constitute a recommendation or invitation to conclude contracts for financial services (e.g. asset management) or to conclude other contracts (e.g. custody agreement). In particular, this information is no substitute for appropriate investor and product-related advice from a specialist.

In the sense of a comprehensive notice, VIRA Ventures LLC would like to finally point out that the acquisition of an asset investment is associated with risks. Asset investments (especially in the field of digital value investments) can be subject to significant fluctuations in value (volatility). Especially in the case of investments with high volatility, fluctuations in value may be pronounced. The value of an investment may therefore fall abruptly and to a considerable extent. There is therefore a risk that you may not get back the full amount you invested, or that you may lose your invested assets completely (total loss). Past performance is not a measure of future performance and therefore does not guarantee future profits. Insofar as the information is based on forecasts, estimates and assumptions about the future economic development of the financial instruments and investments, it cannot be ruled out that the forecasts, estimates and assumptions made may be incorrect or incomplete. In addition, the further in the future the forecast event or result lies, the more uncertain the forecast.

This theses should not be construed as an offer to sell or the solicitation of an offer to buy any security or commodity. VIRA Ventures LLC does not guarantee the sequence, accuracy, completeness, or timeliness of any information provided in this theses. Author(s) may hold cryptocurrencies or other assets named in this report.

INTRODUCTION

In the rapidly evolving world of finance, the rise of blockchain technology and cryptocurrencies stands as a pivotal development, reshaping not just investment strategies but the very fabric of economic interactions. As we step into 2025, it is crucial to understand the global economic landscape and how it interplays with the expanding world of digital assets.

This report should help investors understanding what is going on in the whole crypto economy by reflecting the past year and especially figuring out what the future brings. The goal is to help shaping a mental model & investment thesis for this exponential age already happening at an unbelievable speed under the surface.

REFLECTION OF 2024

Economy
In 2024, the global economy grew by 3.2%, with easing inflation, allowing central banks to relax monetary policies.
The U.S. economy grew with relatively stable unemployment rates, driven by fiscal stimulus, while China maintained a $1 trillion trade surplus amid slowing growth. The EU saw lagging recovery and faced energy concerns together with geopolitical tensions.

Geopolitical risks, including U.S.-China trade disputes and conflicts, posed challenges. Stable inflation and easing policies set the stage for cautious growth in 2025.

Crypto
In 2024, the cryptocurrency market broke records, with Bitcoin surpassing $100,000 in December and boosting other digital assets. The launch of Bitcoin and Ethereum ETFs provided institutional investors with regulated access, with U.S. Bitcoin ETF inflows outpacing gold ETFs in the most successful ETP launch ever. Traditional financial institutions shifted to a neutral or accepting stance, entering or planning acquisitions in the crypto space.

Stablecoins strengthened their role as a bridge between traditional and digital finance, surging in transaction volumes and exposing legacy banking limitations.

MACRO ECONOMY IN 2024
Reflecting on the macroeconomic landscape of 2024, several key aspects emerge, shaping our current economic environment.

As anticipated, inflation started declining again over the year, as can be seen in the following charts. The most volatile factor concerning inflation were the sectors of food and energy. Contrary to prevailing notions of a successfully contained inflation we saw an effective decline until end of Q3 of bottoming out and starting to rise again until the end of the year to Q1 highs.

While the FED started to lower interest rates due to recession fear also other major central banks like the SNB and ECB started lowering rates in order to stimulate their economy alongside lower inflation expectations.

In this case especially the EU was struggling to fuel economic growth again, which they did not manage in 2024 as forecasted.
Regarding further interest rate cuts the US can rely on relatively stable unemployment rates demonstrating a resilient economy. This aspect could lead to a slower pace of further FED rate cuts going into 2025.

Since the beginning of interest rate hikes at the end of 2022 there has been an increase in unemployment rates — overall it looks like the numbers have stabilized during 2024.

When looking at the money supply side of this equation we saw relatively neutral actions of the major central banks until August, when an increase in M2 money supply took place again and was maybe one of the key factors for inflation starting to slightly rise again.

CRYPTO MARKETS IN 2024

Taking a look at the crypto industry of 2024, the year marked a record- breaking period for the cryptocurrency market.
In December, Bitcoin surged past the $100,000 threshold, setting new all-time highs. These record-breaking milestones fueled significant momentum also for other digital assets. The launch of Bitcoin and Ethereum exchange-traded funds (ETFs) provided institutional investors with regulated access to the crypto market. Remarkably, U.S. Bitcoin ETF inflows outpaced those of gold ETFs, marking the most successful exchange-traded product (ETP) launch in history.

Traditional financial leaders began shifting their perspectives from skepticism to neutrality or even acceptance as the industry matured. Many institutions either entered the crypto market or planned strategic acquisitions to establish a stake in digital assets.

The year witnessed two significant waves of upward movement in market capitalization: the first from early February to mid-March, and the second from early November to mid-December.

This two waves of market capitalization rises are also clearly visible in the long-term chart in relation to the previous bull markets.

Noteworthy, the second run up directly started after the US election with Donald Trump as clear winner. His pro-crypto stance and advocacy for a stronger US economy immediately fueled interest for cryptocurrencies and generally risk-on assets.

While comprehensive regulatory clarity remains elusive, the pro-crypto stance of the Trump administration played a pivotal role in driving Q4 crypto spot trading to 2024 highs.

Stablecoins further cemented their dominance as a crucial bridge between traditional and digital finance. Their transaction volumes even surpassed those of Visa („Tether, USDC and DAI transaction volume surpasses Visa’s 2023 monthly average“ (Source: The Block)), highlighting their growing utility in the fast-paced global economy.

The advancements in 2024 have set the stage for accelerated growth in 2025, with institutional adoption expected to intensify as economic and political environments increasingly favor cryptocurrency.

Comparing the following charts of Bitcoin, Ethereum, Solana, and S&P 500 we can see a clear outperformance of crypto assets against the traditional stock market. Bitcoin leading the other major crypto assets with a performance of approx. +112% in 2024 while S&P 500 rises about +24% in the same time. Once again, we saw a year where Bitcoins outperforms the S&P 500 even in terms of risk adjusted returns: Bitcoin: 0.55 S&P 500: 0.26

Taking a view on the distribution of market cap in the crypto market we still see a strong Bitcoin dominance. Bitcoin rising in dominance throughout the year from around 47% up to 58% in November.

This was also partly caused by the Bitcoin ETF inflows providing easy entry into this asset class for traditional finance institutions.

The last major shift we saw in 2024 was the rise of Solana as one of the most used Layer-1 blockchains. With more real world use cases and companies using blockchain protocols, we see transactions and number of active wallets strongly rising from end of Q3. Comparing it to Ethereum which is in the same range of active wallets since 2021 (not counting for L2 wallets) we will have to connect the dots looking backward — but it gives some indication for possible future value aggregation.

We now see generally more segregation and uptake in transaction volumes across „used“ Layer-1 chains, separating the shiny objects from the real major players.

These advancements in 2024 have set the stage for accelerated growth in 2025, with institutional adoption expected to intensify as economic and political environments increasingly favor cryptocurrency.

OUR INVESTMENT STRATEGY 2024

In 2024, the investment strategy of VIRA Ventures focused on navigating the shifting macroeconomic environment and the maturing cryptocurrency market. The approach combined flexibility, risk management, and strategic positioning to capture emerging opportunities while effectively managing volatility.

The year began with a focus on stability amid early-year market turbulence. Investments were directed toward less volatile assets, with reinvested staking yields bolstering returns. As global monetary policies shifted toward easing and liquidity conditions improved, the strategy evolved to take advantage of mid-year developments. Key among these was the approval of Bitcoin and Ethereum Spot ETFs, a milestone that significantly increased institutional adoption and integration of digital assets into mainstream financial systems.

Thematic investments centered on Layer-1 blockchains which form the foundation for decentralized applications and tokenized assets.
This approach was closely aligned with macroeconomic trends. Central bank interest rate cuts and increased liquidity provided a supportive environment for risk assets, including cryptocurrencies.

By dynamically adjusting to these conditions, VIRA Ventures maintained a balanced portfolio that could adapt to both short-term market corrections and long-term growth opportunities.
With a forward-looking vision we positioned ourself to thrive in the rapidly evolving blockchain ecosystem, delivering sustainable growth and value to our investors.

OUTLOOK 2025

Economic Outlook
In the coming year, we think we will observe a positive shift in economic indicators, signaling a revival in economic growth. Both the Empire State and ISM indicators, averaging to indicate an upturn, are crossing the zero level, suggesting a resurgence in growth. This indication is pivotal, showing recession concerns as increasingly irrelevant for the US as we move forward.

Acknowledging the challenges of the last 12 months, characterized by the fight between inflation, interest rates, and recession we now see a transition towards slower interest rate cuts combined with more liquidity in the markets. From the long term macro perspective of global liquidity cycles we should now be entering the phase of macro summer (rising global M2 liquidity).

Historical indicators, offering a view on the reoccurring cycles, foresee rising liquidity during 2025, paving the way for a robustly growing economy (at least in the US) later this year.

On the contrary, we are seeing no major changes in US Bond Yields showing that in the long end the interest rate cuts have not yet made significant impacts. This is caused by the fear of inflation of many market participants.

Overall, the broader macroeconomic landscape reveals a promising year ahead, in line with the typical historical trends observed for liquidity and business cycles.

While concerns about unemployment and inflation persist, continuing further stabilization of the economy and a continued business cycle suggest a potential relief of these challenges.

Transitioning to the crucial theme of liquidity, we emphasize its role as a key variable in understanding market dynamics. Our analysis of Global M2 demonstrates a positive trajectory, suggesting a full cycle is in play.
Federal Reserve actions, notably the injection of net liquidity, further contribute to a favorable environment for assets.

The long-term trajectory of the S&P 500 exhibits a strong correlation with U.S. M2 liquidity trends, as highlighted in the chart. Therefore, we expect with growing liquidity also rising prices of the major asset classes.

The same phenomenon we can observe with the Bitcoin price correlating to M2 money growth. As the following chart indicates the BTC cycles always peaked when the year-over-year M2 liquidity growth peaked.

Hence, the detrended liquidity cycle, acting as a lead indicator, reinforces the positive outlook by indicating sustained liquidity growth in 2025. This optimism is expected to especially serve asset classes well that are further on the risk curve, presenting exciting opportunities for investors in digital assets.

CRYPTO OUTLOOK

Pro-crypto sentiment within U.S. politics and the economy presents an opportunity to revive a more supportive climate for the digital assets sector. In 2025, this environment could lay the groundwork for rapid mass adoption, fueled by growing demand leading from U.S.-based institutional players.

Compact 2025 Predictions:

1. The success of BTC and ETH ETFs may encourage institutions to introduce more crypto ETPs and crypto-backed loan offerings, creating additional pathways to channel investments into the cryptocurrency market.
2. Tokenized versions of traditional assets are poised to gain momentum. This innovation could transform global trading practices, enabling 24/7 market access, fractional ownership, and increased liquidity for assets previously considered illiquid.
3. Implementing a BTC Reserve could lead to global shifts as corporations and nations reevaluate their “zero exposure” policies, potentially embracing cryptocurrency as part of their strategic reserves.
4. Tier 2 and Tier 3 CEXs may encounter growing liquidity pressures in the EU as MiCA regulations reshape domestic markets. These exchanges could adapt by exploring innovative broker-dealer models or adopting advanced technological and liquidity solutions to maintain competitiveness.
5. Solana is poised to further capture Ethereum’s market share, potentially reaching a new all-time high in Total Value Locked.

1. The success of BTC and ETH ETFs may encourage institutions to introduce more crypto ETPs and crypto-backed loan offerings
In 2024 the SEC made a historic decision by approving Spot Bitcoin ETFs in the United States. Within months of their launch, these ETFs attracted over $20 billion in net new assets, making them the most successful ETF launch in financial history, even outperforming the early days of gold ETFs. Shortly afterward, Ethereum ETFs also received approval.

In the U.K., the FCA approved Bitcoin and Ethereum ETNs for professional investors, broadening institutional access. At the same time, Hong Kong introduced six spot ETFs for Bitcoin and Ethereum. By October global assets under management (AUM) for crypto ETPs had reached approximately $100 billion.

While retail investors currently drive nearly 80% of inflows, institutional interest is rapidly increasing. Investment advisors and hedge funds are among the fastest-growing groups showing strong interest. Looking ahead to 2025, institutional adoption is expected to accelerate as the one-year due diligence period concludes in January, lifting restrictions that have so far prevented registered investment advisors and wirehouses in the U.S. from recommending Bitcoin Spot ETFs to their clients. Additionally, the approval of options on Bitcoin ETFs is expected to enhance market liquidity, offering institutional investors more tools for risk management and attracting a broader range of traditional investors.

Considering these developments, global crypto ETPs could surpass $250 billion in AUM by the end of 2025, with at least one U.S.-based Bitcoin ETF likely to rank among the top 25 largest ETFs worldwide. Especially when keeping in mind that more ETFs for several alt coins are in the pipelines of major asset managers.

2. Tokenized versions of traditional assets are poised to gain momentum
In 2024, asset tokenization experienced a significant surge, with government securities growing by 155% amid elevated interest rates. As rates decline, attention is expected to shift toward private credit.
Tokenization offers solutions to three major challenges in private credit investment, as identified in a 2023 Coalition Greenwich survey: illiquidity, high management fees, and lack of transparency. By simplifying trading and broadening market access, tokenization enhances liquidity. Smart contracts streamline operations, reducing back-office expenses and consequently lowering management fees. Furthermore, public blockchains and real-time settlement improve transparency, building trust in a market projected to grow at a 17% compound annual growth rate (CAGR) over the next five years.

Furthermore other traditional assets like real estate or money market funds seek entrance into the tokenized asset market with BlackRock as leading asset manager tokenizing their first money market fund on Ethereum.

A critical development for the tokenized asset market will be the integration of established rating agencies such as Moody’s. These agencies can provide detailed risk assessments for mid- to high-risk assets, boosting transparency around asset quality and helping the sector meet potential regulatory requirements. This is especially important for a market currently lacking standardized metrics for risk and clear benchmarks.

In summary, while other areas of tokenization are also set to expand in 2025, private credit is expected to stand out as a significant growth driver.

3. Implementing BTC Reserves by corporations and nations
In 2024, Bitcoin reached an unprecedented level of political significance, solidifying its role as a store of value that enables institutions and nations worldwide to engage with its decentralized monetary system. It has emerged as a hedge against economic instability and local currency devaluation. For instance, MicroStrategy continued to expand its Bitcoin holdings, reporting unrealized gains exceeding $8 billion. In 2025, other institutions may follow suit, such as Japan’s investment firm Metaplanet, which has already accumulated 855 Bitcoin to safeguard against the weakening yen.

On the national stage, Bhutan leveraged its hydroelectric power for Bitcoin mining, generating $800 million in revenue. Russia also reversed its earlier stance by legalizing Bitcoin mining and international cryptocurrency payments. The trend toward Bitcoin adoption by nation-states is becoming increasingly evident. In 2025, Argentina is expected to adopt Bitcoin as a strategic reserve asset, aligning with its goal of achieving a zero-debt budget. President Javier Milei’s collaboration with El Salvador’s President Nayib Bukele further hints at a growing Bitcoin-friendly agenda in Argentina. In the U.S., Bitcoin’s potential as a strategic reserve asset has entered political discussions during the presidential race.

While escalating geopolitical tensions could create short-term challenges for Bitcoin, the broader economic backdrop is driving adoption. With mounting concerns over the U.S. government’s soaring debt and China’s looming debt crisis, institutions and nations are increasingly turning to store-of-value assets like Bitcoin and gold to safeguard their financial stability.

4. Tier 2 and Tier 3 CEXs may encounter growing liquidity pressures
As of December 30th, the long-anticipated MiCAR regulation is fully in force. Uniform rules now apply across the EU, requiring stablecoin issuers and crypto service providers, such as custodians and exchanges, to comply in order to operate in the European market.

MiCAR is the most comprehensive regulatory framework for crypto assets globally and is significant for two key reasons:

Harmonization and Market Access: It standardizes national regulations, granting licensed companies instant access to a market of 450 million consumers, enhancing Europe’s appeal in global competition.

Legal Certainty for Financial Institutions: MiCAR provides the necessary legal foundation for financial institutions to safely offer products and services, accelerating institutional adoption of the technology and asset class.
In the first quarter of the new year, regulators and businesses will adapt to the framework, with discussions likely to intensify around further developments, particularly regarding stablecoin issuer requirements. A wave of consolidation is also expected, as smaller companies and exchanges struggling to meet MiCAR standards may find it difficult to compete.

The turn of the year also marks the beginning of a new U.S. congressional term, the most crypto-friendly in history, with support from numerous pro- crypto lawmakers.

While early initiatives such as the Stablecoin Act or a comprehensive crypto regulatory framework are unlikely to pass in Q1, the market will carefully analyze developments and temper high expectations with a reality check.

5. Solana is poised to further capture Ethereum’s market share, potentially reaching a new all-time high in Total Value Locked.
In 2024, Solana made notable gains in capturing Ethereum’s market share, with net inflows of $1.2 billion and over $2 billion transferred directly from Ethereum to Solana. Users were drawn to Solana’s high speed and minimal fees, leading its decentralized exchanges (DEXs), such as Raydium, to surpass Uniswap in March 2024. Solana’s integration with traditional finance (TradFi) also advanced rapidly in 2024. PayPal’s PYUSD stablecoin processed $13 billion on the network, and partnerships with Visa, Shopify, and Stripe enabled seamless crypto payments. Looking ahead to 2025, some announcements signal continued growth:

Franklin Templeton will launch its OnChain U.S. Government Money Market Fund on Solana,.
Tokenization platform Securitize plans to introduce native support for Solana. Société Générale is extending its EURCV stablecoin to Solana, citing scalability and cost efficiency.

Finally, Solana’s growing role in TradFi may pave the way for traditional financial products like Solana futures on the CME or U.S.-based Solana ETFs.

Where are we in the cycle?

When exploring the crypto market, we always keep an eye on several indicators that can be utilized to provide deeper insights into the current phase of the crypto cycle.

A very general one is to set the 200 week moving average price in correlation to the percentage of the monthly increase in price. This chart highlights in any asset class when there is an unhealthy price increase taking place. In the BTC chart it highlighted reliably all the cycle tops of the previous crypto cycles.

In context of market sentiment we are heavily looking into miner flows and selling pressure from long term holders and bigger wallets. One way of doing that is by looking into on-chain data of the long term holder supply. This gives us an idea of how long term holders are acting in different phases of the market.

If one assumes that long term holders with bigger wallets are more likely market insiders or professionals looking at this kind of on-chain data gives insights into market tendencies and stronger selling pressures.

Furthermore, a very reliable indicator is the MVRV Z-Score which helps to identify periods of extreme valuation (both over and under) in Bitcoin’s market. It helps to gauge market sentiment and make informed decisions based on historical value trends.

The current chart shows an upward trend with a mid-term spike, which has already several times in the past indicated that there may be some lokal tops or sideway moves in the middle of an ongoing crypto cycle.

When discussing the crypto market, the leading role of Bitcoin for the entire market should not be overlooked. Therefore, it is of particular importance for us to closely examine the inherent cycles of Bitcoin.

POST-HALVING DYNAMICS FAVORING ALTCOIN GRWOTH

Since the launch of our Blockchain Select AMC in 2022, the crypto space has undergone significant shifts, both in public perception and technological advancements. While Bitcoin was the catalyst for the crypto revolution, we strongly believe blockchain technology offers far more than just decentralized money or digital gold. In our view, it’s one of the most effective tools for coordinating human activity and resource allocation on a global scale.

That said, because these emerging systems are more complex than Bitcoin, they will take longer for broader adoption. However, we’ve often been ahead of the curve with our assumptions, and we believe 2025 could mark the year of altcoins — digital assets utilizing crypto primitives across diverse use cases. Several factors support this thesis.

Crypto markets tend to follow well-established four-year cycles, as we’ve detailed in prior reports. These cycles, which began in 2008, are closely tied to macroeconomic trends and liquidity dynamics.

Historically, altcoins have outperformed 12–18 months after Bitcoin’s halving, a pattern that aligns with the upcoming cycle in 2025.
While we don’t base our strategy solely on historical data, this trend complements our macro thesis of a weakening USD and increasing global liquidity. Together, these factors create favorable conditions for altcoin performance.

However, crypto is not entirely detached from fundamentals, nor is it solely driven by external factors. For sustained price increases, we need to see tangible improvements, real-world usage, and clear product-market fit (PMF). We’ve observed a tendency for many to rely heavily on macro factors and cycle theories, often overlooking critical fundamentals such as on-chain revenue and active user growth. This approach is akin to suggesting that the stock market will rise regardless of whether companies are creating great products or generating significant profits. While market sentiment can dominate in the short term, fundamental drivers are ultimately what shape long-term success. That’s why our research remains focused on these core metrics, as they provide the clearest insights into the durability and growth potential of crypto projects.

Shifting Focus: From Infrastructure to Applications

The evolution of new technologies follows a consistent pattern: an initial phase centered on building the infrastructure, which, once established, enables the creation of applications that drive real value. In the case of blockchains, their core business revolves around selling various types of blockspace — whether fast, secure, or cost-effective. During 2019 and 2020, the rise of decentralized finance (DeFi) applications significantly increased demand for blockspace. Ethereum, as the dominant smart contract platform at the time, was the primary beneficiary. This surge in demand from DeFi applications drove up the value of ETH, as its blockspace became a highly sought-after resource.

In recent years, the supply side of the blockchain ecosystem — specifically the buildout of blockspace — has grown rapidly with the emergence of numerous Layer 1 blockchains.

In our view, this has even led to an oversupply of blockspace. At the same time, there has been insufficient focus on the demand side: applications that create meaningful use cases for this blockspace, which is ultimately the more challenging part of the equation. Looking ahead, we anticipate two key trends:

1. Consolidation of activity on high-quality Layer 1 blockchains with strong network traction.

2. Increased investment in application-layer projects that leverage blockspace to deliver real-world value.

At present, many Layer 1 blockchains appear significantly overvalued, with earnings multiples in the hundreds — figures that are difficult to justify even with alternative valuation models. By contrast, we see considerable opportunity in application-layer projects that are generating tangible revenue but, in our view, remain undervalued. As institutional investors increasingly enter the market, we expect them to adopt traditional valuation approaches, which will likely shift attention toward these overlooked opportunities.

From a value capture standpoint, we believe that as blockchain technology continues to mature and gain wider adoption, the application layer will account for an increasing share of the overall value, much like what we have seen with the internet and probably will see with artificial intelligence. In light of this, we have adjusted our asset allocation strategy accordingly for 2025 and beyond.

INVESTMENT THESIS 2025

We believe 2025 will see crypto solidify its position as a legitimate asset class, attracting more institutional capital globally. At the same time, we remain cautious about the growing divergence between market expectations and reality, which could lead to surprises. We will continue to monitor our investments closely, focusing on product-market fit (PMF), revenue growth, and user adoption.

We remain highly enthusiastic about DePIN and are doubling down on our commitment to this space, having been vocal advocates and early investors in the narrative. Its popularity has surged, with thousands of DePIN networks now in operation, and we’re currently tracking over 13 million active devices worldwide. DePIN represents a global movement that’s both inevitable and transformative, with lots of fascinating experiments underway and many success stories that still go underappreciated. A growing number of networks are already showing strong demand and early signs of product- market fit (PMF). Notably, we’re seeing a marked increase in institutional interest in DePIN, outpacing retail engagement. We firmly believe that 2025 will be a breakout year for DePIN, with the sector poised to exceed $200 million in total revenue.

We are cautiously optimistic about the intersection of crypto and AI.
There’s a great deal of hype around projects that, at their core, lack substantial technological innovation. That said, we have identified and invested in decentralized AI networks that address real challenges across the AI stack. These range from specialized compute networks to full-stack solutions that leverage crypto systems to outsource tasks globally to miners.

Stablecoin adoption stood out as one of the most successful use cases in 2024, and we expect this trend to accelerate further in 2025. Adoption is growing across merchants, nations, and retail users, while banks remain significantly behind the curve. Over time, we anticipate financial institutions will integrate stablecoin features into their systems, further driving adoption. US-denominated stablecoins, which currently dominate the market, are effectively exporting the USD globally, reinforcing the dollar’s status as the world’s reserve currency. This trend also boosts demand for US bonds, often used as collateral for stablecoins. We’re strategically positioned to capitalize on this development, focusing on infrastructure investments that benefit directly from increasing stablecoin volumes.

We will maintain a strong allocation to Layer 1 blockchains, anticipating significant on-chain activity and the potential approval of more Altcoin ETFs in 2025. Such developments could drive substantial capital inflows, especially given the relatively low market capitalization of these assets. However, we are highly selective in our approach. Many new shiny Layer 1 chains are currently valued in the tens of billions, despite high inflation rates and significant token unlocks expected this year. Our investment decisions are guided by first principles, taking into account a wide range of economic factors that influence prices. Whenever possible, we plan to stake tokens to protect investor capital against network inflation while generating additional income. We believe that the staking component will have a huge positive impact in long-term portfolio performance.

Amid all the exciting developments, we are also vigilant about the risks emerging in the market. Ironically, risk tends to peak in overly optimistic environments, particularly during periods of euphoria, when participants are prone to making poor decisions. In 2024, we identified several increasing leverage-driven risk factors that we continue to monitor. Despite these concerns, we are firm believers — supported by empirical evidence — that time in the market beats attempts to time the market, particularly in long-term technological trends like crypto.

Over the years, we’ve observed that crypto is likely the most inefficient market in existence, offering enormous opportunities but equally significant risks. Investors often get swept up in excitement without fully understanding the value of what they’re buying, or they panic and sell irrationally during downturns. Because access to crypto is global and permissionless, it attracts a large number of uninformed participants, particularly in bullish cycles. Our strategy has always been to stick to our principles, remaining disciplined, thesis-driven, and data-focused in our decision-making. Whether aligning with or going against market sentiment, this approach allows us to navigate the volatility and consistently deliver long-term results.

CONCLUSION

In conclusion, the crypto landscape in 2025 presents unprecedented opportunities fueled by macroeconomic stability and expanding institutional adoption. Following the successes of 2024, including the record-breaking launch of Bitcoin and Ethereum ETFs, the outlook for 2025 is underpinned by rising global liquidity and a supportive economic environment, signaling a shift towards broader acceptance of digital assets.

Key developments such as advancements in tokenization, the emergence of Bitcoin reserves by corporations and nations, and the continued evolution of Layer-1 blockchains set the stage for a transformative year. Moreover, the post-halving dynamics and increasing focus on application-layer projects highlight the sector’s maturation and the growing emphasis on real-world utility.

As geopolitical landscapes evolve and regulatory clarity improves, the crypto market is positioned for sustainable growth. This year is anticipated to solidify cryptocurrency’s role as a legitimate asset class, enabling investors to capture value in a rapidly evolving financial ecosystem. The confluence of innovation, adoption, and favorable economic trends underscores the transformative potential of blockchain technology in 2025.

If you are interested to learn more about our service & investment opportunities visit us at www.vira.ventures.

Shifting Economic Paradigms

As we enter a new phase in the business cycle, the financial landscape is undergoing a major shift. Central banks in key economies, including the Federal Reserve, European Central Bank, and Bank of England, are beginning to cut interest rates after years of tightening policies.

This change signals a shift in priorities, aiming to boost stability as inflation pressures ease and economic growth slows down. This transition comes at a time of ongoing geopolitical tensions, supply chain disruptions, and evolving fiscal policies, all of which are impacting global trade and investment. With more liquidity likely on the horizon and a favorable interest rate environment, investors are rethinking their strategies to take advantage of new opportunities while managing emerging risks.

For digital assets like cryptocurrencies, these broader economic changes present both challenges and new possibilities. As liquidity grows and borrowing costs decrease, the conditions may open doors for increased adoption and investment in the crypto space. However, this environment also requires careful navigation to manage volatility and stay prepared for rapid shifts.

Our approach is forward-looking and focused on balancing risk with reward. We stay agile, ready to adapt to changing market conditions, with the goal of achieving steady, long-term growth. Our strategy uses a flexible risk management system that allows us to make adjustments based on factors like liquidity, market sentiment, and economic trends. This proactive approach helps us stay in tune with current market realities while staying committed to our long-term goals, so we can seize new opportunities while supporting sustainable growth.

Recent Interest Rate Decisions of Central Banks

Central bank interest rate decisions continue to play a crucial role in shaping the current global economic landscape. As central banks respond to evolving economic conditions, these decisions are impacting investment flows, liquidity levels, and overall economic growth. Below is a summary of the latest interest rate decisions by major central banks around the world:

SWITZERLAND: The Swiss National Bank cut its main interest rate from 1.25% to now 1.00%.

UNITED KINGDOM: The Bank of England cut its rates down from 5.00% to 4.75%.

NORWAY: Norway’s central bank held its policy interest rate unchanged at a 16-year high of 4.50%.

EUROPE: The European Central Bank cuts its interest rates for the third time — now at 3.25%.

JAPAN: The BoJ raised its key rates to 0.25% in July.

CHINA: The People’s Bank of China lowered its one-year loan prime rate (LPR) by 25 basis points to 3.10%.

USA: The Fed already lowered its interest rates to 4.75–5.00% and is expected to cut further in the coming months.

Liquidity Change, Bitcoin Price and Investment Flows

The chart below highlights the relationship between M2 money supply growth from major central banks and Bitcoin’s price movement. Historically, periods of strong M2 growth — such as the surge observed in 2020–2021 — have aligned with significant increases in Bitcoin’s value. This trend indicates that when central banks increase the money supply, investors often turn to alternative assets like Bitcoin, boosting its demand and price.

In recent months, M2 growth has remained low. However, with central banks now signaling a shift in monetary policy, we already see M2 expansion pick up again. If this continues, we will see renewed investor interest in Bitcoin and other digital assets; emphasizing how closely monetary policy decisions can influence asset valuations.

To manage this ongoing liquidity cycle effectively, we closely monitor a number of macroeconomic indicators, such as the mentioned M2 money supply, and on-chain metrics like the MVRV Z-score or the trends of long term holders’ investment flows, which provide us with a fundamental overview to carry out our analysis.

Above is the chart of the MVRV score, highlighting periods of extreme price movements that can signal potential entry and exit points in the market.

Below is a chart of Bitcoin holder flows showing periods of selling pressure from long term holders in the market. This often signals potential tops.

Examining the latest flows of the Bitcoin and Ethereum Spot ETFs, we recognize a significant increase in net inflows.

This trend reflects increasing investor confidence and heightened interest in digital assets as a viable asset class.

Our Thesis: Positioned for Crypto’s Growth

As we wrap up Q3 2024, it’s clear that the crypto market is following many of the trends we anticipated over the past two years. Our approach, built on understanding both the big macro factors and the specific crypto narratives, has put us in a strong position. Through our Blockchain Select AMC, we’ve been able to turn this vision into real results, proving our strategy in a market that’s rapidly maturing.

A big part of the recent performance in crypto comes from how closely it’s now tied to global economic shifts. Interest rates, inflation, currency concerns — these are all feeding into crypto’s appeal as a real asset class. We’re also seeing more regulatory clarity from major governments, which only reinforces crypto’s legitimacy. For us, this is exactly the kind of progress we expected: crypto moving from a niche asset into something essential for the future economy.

One of the areas where we’ve been ahead of the curve is DePIN (Decentralized Physical Infrastructure Networks). We were among the first to invest actively in DePIN before it was even on most people’s radar, recognizing its potential to change how real-world infrastructure is funded and managed. DePIN brings a practical, high-impact use case to blockchain, letting people invest in essential infrastructure through decentralized ownership. Today, as DePIN is getting more attention, we’re seeing just how powerful this model can be — and it’s exactly what we envisioned: crypto solving real-world problems.

While Bitcoin has been a first step for many traditional investors, we’ve always seen a bigger picture. We believe Bitcoin is just the start, and that the real potential of crypto lies in applications far beyond digital gold. Crypto infrastructure — „crypto rails“ — can power all sorts of new solutions across industries. It’s still early, but we’re seeing more of the market realize this, even though we’re only scratching the surface of what’s possible.

Several trends are pushing capital into crypto. First, there’s inflation and currency debasement — crypto offers an appealing hedge. Then there’s the rapid adoption of blockchain in real use cases, from finance to logistics. And there’s also a generational shift: younger investors see digital assets as core to their portfolios, not just a gamble but as vital assets in the digital economy they’re building.

Our approach remains focused but flexible. We’re closely monitoring key indicators to spot any short-term overheating while keeping our asset allocation aligned with long-term adoption trends. With crypto’s foundational technology moving fast, we’re positioned to ride this momentum while adapting as the market evolves.

What to expect until end of the year

We’d like to highlight once more that, even with the growing adoption by institutional investors and the increasing maturity of the crypto market, we anticipate elevated volatility in the coming period during the expected bull run, much like in previous cycles.

As seen in past bull runs (here shown for the bull run 2016–2018), significant market corrections, often between 30% and 40%, are typical — even amidst strong upward trends. These drawdowns are driven by a variety of factors, including early investor profit-taking, shifts in market sentiment, and broader macroeconomic impacts.

While these corrections may be substantial, they do not disrupt the overall upward trajectory of the market. Instead, they serve as natural cycles where periods of rapid gains are followed by pullbacks. This pattern helps consolidate gains, reduce speculative excess, and build a stronger foundation for continued growth.

We plan to leverage these market pullbacks for strategic portfolio adjustments, positioning ourselves to capitalize on these opportunities.

Conclusio

In summary, we find ourselves at a pivotal moment in the global financial landscape, marked by central banks’ shift toward easing policies, the maturation of the digital asset sector, and the ongoing adoption of blockchain technology. The expected increase in market liquidity, combined with a more favorable interest rate environment, provides a strong foundation for growth in digital assets, especially as cryptocurrencies continue to attract institutional interest.

This evolving environment offers both opportunities and challenges. Increased liquidity could act as a significant catalyst, fueling demand for digital assets and supporting a broader range of investors. However, with this growth also comes the need for careful risk management. We remain committed to our disciplined, forward-looking approach, which enables us to capitalize on new market opportunities while protecting against volatility.

Our flexible strategy allows us to adapt to economic shifts and technological advancements, positioning us for sustainable, long-term growth. As the blockchain space evolves and attracts more investors, we remain committed to capturing opportunities in an increasingly accessible and innovative digital asset market. If you would like to learn more about our services and investment opportunities, please visit us at www.vira.ventures.

Introduction: The Market is Shaky, But Our Excitement is Unshaken

We’ve all heard it before — the crypto market is volatile. That’s nothing new. What’s new, and what genuinely excites us at VIRA Ventures, is what’s quietly unfolding within the Decentralized Physical Infrastructure Networks (DePIN) space. Despite the turbulence, we’re witnessing a remarkable amount of fundraising and innovation in DePIN, and we believe this sector is the missing link between crypto and real-world value creation.

DePIN is where the abstract world of tokens starts to have tangible effects in the physical world. These networks aren’t just another crypto experiment; they are the foundation for something much bigger. In this thesis, we’ll dive deep into why we’re so bullish on DePIN, how we see this space evolving, and why investors should be paying close attention.

Crypto: A New Way to Align Human Incentives

Let’s start with the basics. Cryptocurrency is more than just digital money — it’s an open, global movement that uses token incentives to coordinate human behavior. This is a radical departure from traditional systems, where central authorities make the rules and distribute rewards. In crypto, the rules are coded, transparent, and open to everyone. The incentives are built into the network, driving participation and aligning interests in a way that’s never been possible before.

Take Bitcoin as an example. It’s not just digital gold; it’s the world’s most powerful supercomputer, secured by millions of people who are all motivated by the same incentives. But we believe that Bitcoin is just the beginning. The same incentive mechanisms that created Bitcoin can be applied to other networks — networks that don’t just secure value but actually create it by solving real-world problems.

That’s where DePIN comes in. These networks are using the power of decentralized incentives to build infrastructure that has real, tangible value. Early participants in these networks are taking on higher risks, but they’re also positioning themselves for the biggest rewards as these networks mature.

The DePIN Opportunity: Moving Beyond the Supply Side

The crypto world has seen a lot of hype, with many projects promising to change the world. But if we’re honest, only a few have actually achieved Product-Market Fit (PMF). The problem isn’t building the supply side of the network — that’s the easier part. The real challenge has been creating sustainable demand.

DePIN networks are poised to solve this problem. We’re already starting to see on-chain activity from entities that are willing to pay for the services these networks provide. This is a crucial development because it means that DePINs are not just theoretical — they’re already being used to create real value.

But what makes DePIN so compelling is that it’s not just about creating supply; it’s about creating sustainable, on-chain demand. This is the key to long-term success, and we’re seeing promising signs that demand is starting to pick up. As these networks grow, they’re transforming into platforms with diversified use cases, which brings us to our next point.

The Vertical Sectors: Geospatial Networks, Storage, Compute, and Energy

Let’s talk specifics. There are several sectors within DePIN that we’re particularly excited about, and we’re not just talking in abstract terms — we’re talking about real projects with real traction.

1. Geospatial Networks: Hivemapper is a prime example. It’s a decentralized, map-building network that rewards contributors for capturing and sharing geospatial data. Since its launch, Hivemapper has already mapped millions of kilometers of roadways, and the data it generates is being used by companies to improve their products. This is a perfect example of how a DePIN network can create real-world value while rewarding participants in a fair and transparent way.

1. Decentralized Storage: Filecoin has been a leader in this space, offering a decentralized alternative to traditional cloud storage. With over 18 exabytes of storage capacity and thousands of active miners, Filecoin has demonstrated that decentralized storage is not just viable but scalable. It’s not just about storing data; it’s about creating a marketplace where storage is bought and sold in a decentralized manner, reducing costs and increasing security.

1. Compute: Render Network is taking decentralized computing to the next level by offering GPU-powered rendering services. By leveraging idle GPUs across the globe, Render has built a decentralized network that can provide compute power for everything from 3D graphics to AI training. It’s a powerful example of how DePIN networks can disrupt traditional industries by offering more efficient and cost-effective alternatives.

1. Energy: Starpower is tackling one of the biggest challenges of our time — energy production and distribution. By decentralizing energy networks, Starpower is enabling individuals and communities to produce, store, and trade energy without relying on centralized grids. This has the potential to democratize energy and accelerate the transition to renewable sources.

Each of these projects illustrates the immense potential of DePIN networks to create value in the real world. But what’s even more exciting is how these networks are evolving from single-use cases into diversified platforms.

DePINs Converging into Platforms: The Next Evolution

We’re at a pivotal moment in the evolution of DePIN networks. The focus has traditionally been on building up the supply side — creating the infrastructure that makes these networks possible. And in many ways, this has been a huge success. We’ve seen exponential growth in the supply side of DePINs, with more participants, more data, and more infrastructure being added every day.

But now, we’re starting to see something even more exciting: the demand side is beginning to pick up. The biggest DePINs are transforming into platforms with diversified use cases. This is not something that happens overnight; platformization typically occurs in years 5–10 of scaling a global decentralized network. Here’s how we see it unfolding:

1. Build a Decentralized Network (Supply Side): The first step is to create the infrastructure — whether it’s storage, compute, or geospatial data. This is the foundation upon which everything else is built.
2. Monetize by Selling Data or Services (Demand Side): Once the network is up and running, the next step is to generate demand by selling the data or services it produces. This is where the network starts to create real value.
3. On-Chain Revenue Creates a Token Flywheel: As more entities start using the network, on-chain revenue grows, creating a positive feedback loop. This attracts more developers and participants, further strengthening the network.
4. Emergence of Developer-Friendly Tools: As the network grows, we start to see the emergence of tools that make it easier for developers and enterprises to build on top of the network. This further increases both demand and supply.
5. Fairly Rewarding Participants: Throughout this process, the network’s incentive mechanisms ensure that the people who build the network are fairly rewarded. This is what makes DePIN so powerful — everyone who contributes to the network benefits from its success.

The result is a DePIN flywheel — an infrastructure network that gets stronger as it gets bigger. We believe that this flywheel has the potential to add $10 trillion to global GDP over the next decade and $100 trillion in the decade after that.

The End-State of DePIN: A Vision for the Future

So, what does the future look like in a world dominated by DePIN networks? Let’s fast-forward a decade or two and imagine the possibilities.

In this future, DePINs have become the fundamental building blocks for a new generation of applications. Data is being generated by billions of people through decentralized networks like Hivemapper and Filecoin. Compute resources are being shared globally through networks like Render, while energy is being produced and traded on decentralized grids powered by Starpower.

Web 2 giants, recognizing the power and efficiency of DePIN networks, have integrated with them to enhance their own services. This creates real demand for DeFi applications, as individuals and businesses earn native tokens through their participation in DePIN networks. These tokens are then used in DeFi to borrow, lend, and swap, creating a vibrant ecosystem that’s fully integrated with the real economy.

The benefits of this future compared to today’s Web 2 systems are profound. Data is no longer hoarded by a few centralized entities; it’s decentralized and accessible to everyone. Compute and energy resources are shared globally, reducing waste and increasing efficiency. And most importantly, the people who contribute to these networks are fairly rewarded for their efforts, creating a more equitable and sustainable economic system.

Conclusion: Our Commitment to DePIN and the Future

At VIRA Ventures, we’re not just observers of the DePIN revolution — we’re active participants. We’ve invested in some of the most promising projects in this space, and we’re incredibly excited about the future. We believe that DePIN networks are the key to unlocking the next wave of innovation, and we’re committed to supporting their growth.

The path forward won’t be easy. There will be volatility, challenges, and setbacks. But for those who understand the potential of DePIN networks and are willing to navigate the risks, the rewards could be extraordinary. We invite you to join us on this journey and be part of the future of crypto and real-world value creation.

This thesis is our deep, considered take on where we believe DePIN networks are headed and why we’re so excited about their potential. We’re not just talking about the next big thing in crypto — we’re talking about building the future. And we’re just getting started.