The cryptocurrency market continues to evolve with significant developments, and researchers suggest the ongoing bull cycle is reaching its later stages. 

Recent analyses from CryptoQuant and Kaiko Research shed light on these trends, providing insights into the state of the market as it enters 2025.‍

Later Stages of the Bull Cycle

According to CryptoQuant contributor Crypto Dan, the current cryptocurrency bull cycle, which began in January 2023, is advancing toward its later stages. Bitcoin has recorded substantial gains in both price and duration during this cycle, driven by an influx of new investments and contributions from existing investors.

Crypto Dan highlights that the percentage of Bitcoin traded for less than a month, measured using the realized market cap (UTXO), has reached 36%. While this is lower than the peaks of previous cycles, the long-term trend points downward. This suggests that the cycle peak may occur by Q1 or Q2 of 2025.

The analysis also warns of potential market overheating, with the likelihood of the ratio spiking sharply, potentially signaling the transition to a bear cycle. Despite the potential for further gains in Bitcoin and altcoins, Crypto Dan recommends a cautious approach and gradual profit-taking to manage risk.‍

Liquidity and Trading Volumes Rebound

Kaiko Research reports that 2024 saw a resurgence in crypto trade volumes and liquidity, with Bitcoin gaining 118% for the year—its third-best performance since 2018. Aggregate trading volumes across more than 30 centralized exchanges reached levels last seen in 2021, buoyed by the introduction of spot Bitcoin ETFs in the United States.

The increase in liquidity has also closed the “Alameda Gap,” the liquidity shortfall that followed the collapse of FTX. Bitcoin’s 1% market depth rose by over 85% to approximately $370 million, matching pre-FTX levels. Kaiko suggests this marks a turning point for the industry, moving beyond the high-profile failures of recent years.

Looking ahead to 2025, Kaiko predicts continued momentum in the crypto market, driven by expanding institutional interest and anticipated regulatory clarity in the U.S. Institutional attention is expected to broaden beyond Bitcoin to include Ethereum and other crypto assets.‍

Record Corporate Bitcoin Purchases

Corporate interest in Bitcoin surged in Q4 2024, with companies like KULR Technology, Rumble, and Genius Group adding Bitcoin to their balance sheets. MicroStrategy, the largest corporate Bitcoin holder, increased its holdings significantly, from 252,220 BTC in September to 446,400 BTC by December.

MicroStrategy’s performance outpaced Bitcoin and other BTC-exposed firms despite a pullback in December. The company plans to raise $42 billion over three years for further Bitcoin acquisitions. However, December options data suggests that investor sentiment toward MicroStrategy has shifted from ultra-bullish to neutral, indicating potential cooling in enthusiasm.