Author: @arndxt_xo
Compiled by: Vernacular Blockchain
Historically, February is usually a strong month for Bitcoin in the years following the halving
1. Cycle review and forecast
1) Review of the 2017 and 2021 cycles
2017: Bitcoin experienced a pullback in January but resumed its uptrend in February.
2021: Similarly, BTC resumed its upward trend in February after falling in January.
2) Forecast for 2025
If history repeats itself, a similar rally could come this February.
3) Market rumors and potential driving factors
Recently, market speculation about executive orders related to Bitcoin has continued to heat up.
While this has yet to be confirmed, history suggests that such events often provide a significant boost to markets.
Next, we will conduct an in-depth analysis of the performance of each field 👇🧵
2. Industry Overview
1) Infrastructure & Interoperability
Reducing network tribalism and enabling cross-chain connectivity
Development Trends:
Superposition (Arbitrum L3) and Abstract (Hydra with Stargate integration) are launching more efficient asset transfer and data sharing solutions.
LayerZero expands its influence, allowing applications on Superposition to obtain liquidity from more than 100 connected chains.
Arcana Network has partnered with Scroll to allow users to pay gas fees with stablecoins (USDC/USDT) on any chain, greatly simplifying the user's onboarding process.
Viewpoint:
These developments show that the momentum for cross-chain interoperability continues to grow. From L1 to L2 to L3, seamless movement of assets and data is gradually becoming a basic requirement of the industry.
Projects that can integrate user-friendly interfaces, gas abstractions, and universal cross-chain bridges will hopefully reduce the barriers that have hindered the popularization of DeFi in the past due to "network tribalism."
Looking ahead, we may see the launch of more vertically customized L3s, such as those focusing on games, RWA (real world assets), and institutional-grade DeFi.
2) Liquidity, lending and real-world assets
The Holy Grail of Credit and Lending Ecosystem
Development Trends:
Coinbase has launched BTC-collateralized loans for U.S. users, providing a more mainstream audience with the ability to leverage the Bitcoin asset.
Tradable partnered with ZKsync to bring $1.7 billion worth of **Resource Wages (RWA)** onto the chain, demonstrating how institutional-grade products can further penetrate the DeFi space.
Plume Network has attracted more than $4.5 billion in asset commitments for asset tokenization, with a TVL of $64 million before its launch, and has also launched a $25 million RWAfi ecosystem fund.
Viewpoint:
The line between CeFi and DeFi is becoming increasingly blurred, which is an important sign of the industry’s maturity.
Coinbase's entry into the crypto-collateralized lending market shows that centralized trading platforms are willing to offer products traditionally associated with DeFi platforms. This may divert DeFi users, but it also verifies the importance of on-chain lending as a key financial tool.
The integration of RWA is considered the “holy grail” of connecting traditional finance and on-chain liquidity.
If this trend continues, DeFi could see stronger returns, deeper liquidity, and greater institutional trust, but this could also come with more regulatory scrutiny.
The development of these two areas is not only an advancement in technology and ecology, but also reflects the transformation path of the entire industry from "novel technology" to mainstream financial instruments.
3) Liquid Staking & Synthetic Bitcoin
Innovation of pledge mechanism
Development Trends:
Babylon Labs launches $YBTC, a liquid staking token backed 1:1 by BTC, integrated with pSTAKE.
BrahmaFi launched the Onchain+ program, combining multi-chain strategies and AI agents (ConsoleKit) to automate DeFi operations.
Viewpoint:
Liquidity staking has proven to be a key means of unlocking additional returns for stakers without sacrificing liquidity. By tokenizing staked assets (such as BTC, ETH, etc.), DeFi participants can use them as collateral or trade them freely.
This “double-income” model (earning both staking rewards and potentially earning DeFi returns) is likely to accelerate further.
However, there are inherent risks: the more assets are “liquidly staked,” the deeper the complexity of the system. Protocols must be transparent and fully audited to prevent hidden leverage from eroding the stability of the system.
4) Ecosystem expansion and strategic cooperation
Large-scale user introduction and enterprise cooperation
Development Trends:
Polygon Labs is working with Reliance Jio, India’s largest telecom company with more than 450 million users, to integrate blockchain solutions into Jio’s applications.
Ledger has integrated Uniswap into Ledger Live Desktop to provide a smoother experience for hardware wallet users.
Abstract is preparing for the mainnet, suggesting a wave of innovation in multi-chain products is coming.
Viewpoint:
Large-scale user introduction and enterprise cooperation are the key to the mainstreaming of the blockchain industry. This not only increases the exposure of blockchain technology, but also further verifies its value through actual application scenarios.
Especially in high-growth markets like India, Polygon’s partnership with Reliance Jio could be an important example of driving blockchain adoption.
5) Airdrops, incentives and liquidity mining
Intensified competition for users
Development Trends:
Several projects, including Scroll, Quai Network, Fuel, and Bubblemaps, are launching airdrops or extending their rewards seasons, each with different criteria for community participation.
Protocols such as Vertex (rewarding 2.1 million $SEIToken) and Derive (rewarding 2 million $DRV to liquidity providers) continue to provide user incentives. Nodepay and Solayer provide a model of early claiming process or direct distribution during the TGE stage.
Viewpoint:
Airdrops have proven to be an effective way to launch an initial user base, but they are also becoming a “standard feature” in the competition for new protocols.
As more and more projects offer incentives, user fatigue may become a problem. The key for projects is to attract users through real utility, rather than just relying on "chasing incentives."
In the long run, the protocol needs to find a balance between incentive mechanisms and sustainable token economics. The best strategy is to design a reward system that attracts new users and retains them through real product value.
3. Narrative Overview
From liquidity pledge and ecological cooperation to user incentives, the current focus of the industry is to improve user experience and participation through innovation and strategy. These developments not only promote the improvement of infrastructure, but also indicate that DeFi is gradually moving towards a more mature and efficient stage.
1) BTC price trend and macro impact
Market Dynamics
The first Monday of the new year saw a notable “bull trap” in the market. Bitcoin ($BTC) surged after the New York market opened, and the Coinbase premium attracted investors to believe that a bull run was imminent. However, this signal proved to be wrong. The next day, the price of Bitcoin quickly stagnated and fell sharply, and the altcoin market weakened accordingly.
2) Uncertainty caused by key macro factors
Inflation concerns: Strong job market data (NFP report) released on January 10th pointed to underlying inflationary pressures, which could lead to fewer rate cuts and serve as a bearish signal for the stock and crypto markets.
US Dollar Index (DXY): hit a new high, reaching 110.
10-year Treasury yield: Up from 4.6% to 4.8% year to date.
S&P 500: Backtesting pre-election price levels.
3) AIToken correction and opportunity consolidation
$VIRTUAL: Down 57% from a market cap of $5.2 billion.
$AI16Z: Down 63% from $2.5 billion market cap.
$ZEREBRO: Down 73% from $820 million market cap.
$FAI: Down from $650 million to $500 million.
$AIXBT: Still near all-time highs despite market weakness.
$GOAT: Down 55%, still weak performance.
Emerging winners
$ANON: From $20 million to $240 million.
$AVA: From $60m to $300m.
$PIPPIN: From $15 million to $320 million.
4. Memecoins dynamics
1) FARTCOIN
The meme coin, which is loosely associated with the AI narrative, rebounded 75% after a 56% drop, and the market generally speculates that its market value may exceed US$5 billion or even higher.
$$BUTTHOLE and $$LLM
$BUTTHOLE: Down 70% after reaching a high of $140 million.
$LLM: Related to the AI narrative, fell 75% after reaching $150 million.
2) Dino Coin and USA Coin (represented by $XRP)
$XRP: Up 6% YTD, outperforming the market.
Ripple’s links to the incoming U.S. government and CEO Brad Garlinghouse’s relationships with key political figures boosted market sentiment.
3) Other Tokens with Strong Performance
$HBAR
$XLM
$ADA
5. Other significant trends are showing strong performance
$SPX: broke through $1 billion market value, reached a high of $1.6 billion, and is now down 30%.
$GIGA: Approaching $1 billion but encountering resistance, down 30%.
$SUI: Reached a record high of $54 billion FDV, down only 13%.
New project launched
$BIO: As the first major DeSci protocol to go live, the FDV was $3 billion, but is now down 55%.
$GRASS: Showing a strong rebound after weeks of sideways trading.
$USUAL: Down 66% from its all-time high due to controversy over the USD0++ redemption rule change.
Tokens that require caution
$FTM: Due to the delisting of trading contracts, it may have a second spring, but there are significant migration issues.
$RUNE: Faces risks associated with ThorFi borrowing and is compared to LUNA.
Animal-themed meme coins: $POPCAT, $WIF, and $NEIRO performed the worst, with $POPCAT down 73% from its all-time high.
6. Outlook to 2025
The market has opened a new chapter, but the macroeconomic environment and the diversity of the token market remind us to remain cautious while looking for potential opportunities.
Looking forward to welcoming new highs in 2025 with more market participants!
