Fund managers see $2.6 trillion in dry powder fueling a 20% jump in M&A and an explosive IPO market in 2025. Bitcoin is expected to lead a crypto bull run. But aggressive government spending cuts could shock an economy where half of GDP ties to government spending.
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I just interviewed multiple fund managers on how they're preparing their portfolios going into 2025, and here's the big takeaways. Number 1, dry powder has hit all-time highs, $2.6 trillion. Wall Street foaming at the mouth for M&A activity. Goldman Sachs predicts a 20% increase in M&A activity going into 2025. IPO market looking to have potentially an explosive 2025 and 2026 year as well. So very, a lot of bull cases here going into 2025. Short-term bear case would be if they actually do the government cuts they want to do, that could shock the economy. Roughly 50% of GDP is indirectly affected by government spending. About 30% is directly affected by government spending. Okay, if they really come in and do Doge, I mean, it's— that's a, that's a lot of people getting fired. That's a lot of cuts. Could be massive. Also, rate cuts usually precede a recession. The PE ratio are at all-time— not all-time highs, but nearing all-time highs. Reverting back to the median could— and we've had some major run-ups— could be a revert back to a mean. Talked about the crypto cycle that we're happening in right into the bull cycle in 2025, how Bitcoin runs first, then usually Ethereum after, then large