Macro Analysis of the Crypto Market: A Critical Period for Reconstructing Pricing Logic

1. Overview

In the second quarter of 2025, the crypto market experienced a transition from a booming trend to a short-term adjustment. Although sectors like Meme, AI, and RWA have been active in turns, the limitations of macro factors have gradually become apparent. The instability of the global trade situation, the erratic nature of US economic data, coupled with the ongoing game of expectations regarding Federal Reserve interest rate cuts, have led the market into an important turning point. At the same time, marginal changes in policy games are beginning to emerge: certain political forces' positive attitude towards cryptocurrencies has prompted investors to consider the concept of "Bitcoin as a national strategic reserve asset" ahead of time. We believe that the current cycle is still in the "mid-term bull market correction phase", but structural opportunities are quietly emerging, and the pricing benchmarks are undergoing macro-level changes.

2. Macroeconomic Environment: Old Logic Disintegrates, New Anchors Not Yet Established

In May 2025, the crypto market is at a critical period of macro logical reconstruction. The traditional pricing framework is rapidly disintegrating, while new valuation benchmarks have yet to form, resulting in a "vague and anxious" macro environment for the market. From macroeconomic data and central bank policy directions to marginal changes in global geopolitics and trade relations, all are influencing the behavior patterns of the entire crypto market in a manner described as "a new order amid instability."

First, the monetary policy of a certain country's central bank is shifting from "data dependence" to a new stage of "political and stagflation pressure game." The inflation data released in April and May shows that while inflationary pressure has eased, overall stickiness remains, especially the rigidity of service prices, which intertwines with the structural shortage in the labor market, making it difficult for inflation to drop rapidly. Although the unemployment rate has shown a marginal increase, it is far from triggering the lower limit for a reversal in central bank policy, leading the market to push back its expectations for interest rate cuts from the originally likely June to the fourth quarter or even later. Although the central bank governor does not rule out the possibility of rate cuts within the year in public statements, his language emphasizes "cautious observation" and "adherence to long-term inflation targets," making the prospect of liquidity easing seem even more distant in reality.

This uncertain macro environment directly affects the funding pricing basis of encryption assets. In the previous three years, encryption assets enjoyed valuation premiums under the backdrop of "zero interest rates + broad liquidity easing," but now, in the latter half of the cycle with interest rates at high levels, traditional valuation models face systemic failure. Although Bitcoin maintains a fluctuating upward trend driven by structural funding, it has not been able to generate the momentum to break through the next important threshold, reflecting that its "alignment path" with traditional macro assets is disintegrating. The market is beginning to no longer simply apply the old correlation logic of "NASDAQ increase = BTC increase," but gradually realizes that encryption assets need independent policy anchors and role anchors.

At the same time, important changes are taking place in the geopolitical variables affecting the market since the beginning of the year. The trade war issues between two major countries, which had previously intensified, have significantly cooled down. Recently, a certain political team's shift in focus regarding the "manufacturing return" issue indicates that these two major countries will not further escalate conflicts in the short term. This has temporarily dampened the logic of "geopolitical risk aversion + Bitcoin as a risk-hedging asset," leading the market to no longer assign a premium to the "safe haven" of crypto assets and instead seek new policy support and narrative momentum. This is also an important background for the shift from a structural rebound to high-level fluctuations in the crypto market since mid-May, with some on-chain assets experiencing a continuous outflow of funds.

At a deeper level, the entire global financial system is facing a systemic process of "anchor point reconstruction." The US dollar index is consolidating at high levels, and the interconnections between gold, government bonds, and US stocks have been disrupted, with crypto assets caught in between. They neither possess the central bank endorsement typical of traditional safe-haven assets nor have they been fully incorporated into the risk control frameworks of mainstream financial institutions. This "neither risk nor safe haven" intermediate state leads to a "relatively ambiguous zone" in the market pricing of main assets like BTC and ETH. Furthermore, this vague macro anchor further transmits downstream into the ecosystem, resulting in surges in narratives such as Meme, RWA, and AI, which are difficult to sustain. Without the support of macro incremental funds, localized prosperity on the chain is prone to fall into the "quick ignition --- rapid extinguishment" rotation trap.

We are entering a turning window of "de-financialization" dominated by macro variables. At this stage, the market's liquidity and trends are no longer driven by simple asset correlations, but depend on the redistribution of policy pricing power and institutional roles. If the crypto market wants to usher in the next round of systemic re-evaluation, it must wait for a new macro anchor------it could be the official establishment of "Bitcoin as a national strategic reserve asset," the "Federal Reserve's clear initiation of a rate-cutting cycle," or the "acceptance of on-chain financial infrastructure by multiple governments worldwide." Only when these macro-level anchors are truly established will there be a comprehensive return of risk appetite and a resonance upward of asset prices.

Currently, the crypto market needs to stop clinging to the continuation of old logic and instead calmly recognize the subtle signs of new anchor points emerging. Those funds and projects that can first understand the changes in the macro structure and layout in advance for new anchor points will seize the initiative in the next real uptrend.

III. Policy Trends: New Bill Approved, State-Level Bitcoin Strategic Reserves Implemented, Triggering Structural Expectations

In May 2025, the Senate of a certain country officially passed an important bill, becoming one of the most institutionally influential stablecoin legislative proposals globally since MiCA. The passage of this bill not only marks the establishment of a regulatory framework for USD stablecoins but also sends a clear signal: stablecoins are no longer a technological experiment or a gray financial tool, but have become an integral part of the sovereign financial system, serving as an organic extension of the influence of the digital dollar.

The core content of the bill mainly focuses on three aspects: First, it establishes the licensing authority of the Federal Reserve and financial regulatory agencies over stablecoin issuers, setting capital, reserve, and transparency requirements equivalent to those for banks; Second, it provides a legal basis and standard interfaces for the interoperability of stablecoins with commercial banks and payment institutions, promoting their widespread application in retail payments, cross-border settlements, and financial interoperability; Third, it establishes a "regulatory sandbox" exemption mechanism for decentralized stablecoins, preserving innovation space for open finance within a compliant and controllable framework.

From a macro perspective, the passage of this bill has triggered a threefold structural shift in expectations regarding the crypto market. Firstly, a new paradigm of "on-chain anchoring" has emerged in the international extension pathway of the dollar system. Stablecoins, as the "federal check" of the digital age, not only serve the internal payments of Web3 but may also act as part of the dollar policy transmission mechanism, enhancing its competitive advantage in emerging markets. This also means that certain countries are no longer simply suppressing crypto assets, but are choosing to incorporate part of the "channel rights" into the national fiscal system, legitimizing stablecoins while also positioning the dollar in the upcoming digital financial war.

Secondly, there is the re-evaluation of the on-chain financial structure driven by the legalization of stablecoins. The ecosystem of certain compliant stablecoins will experience a liquidity explosion, and the logic of on-chain payments, on-chain credit, and on-chain ledger reconstruction will further activate the demand for bridging DeFi with RWAs. Especially against the backdrop of high interest rates, high inflation, and regional currency fluctuations in the traditional financial environment, the property of stablecoins as "cross-system arbitrage tools" will further attract emerging market users and on-chain asset management institutions. Less than two weeks after the passage of the bill, the daily trading volume of certain platform stablecoins hit a new high for 2023, and the circulating market value of a certain on-chain stablecoin increased by nearly 12% month-on-month, as the liquidity focus began to shift from certain assets to compliant assets.

More structurally significant is the fact that multiple state governments have quickly followed up with Bitcoin strategic reserve plans after the passage of the bill. As of late May, one state has already passed the Bitcoin strategic reserve bill, and several other states have announced the allocation of part of their fiscal surplus as Bitcoin reserve assets, citing reasons including inflation hedging, diversification of fiscal structure, and support for the local blockchain industry. In a sense, this behavior marks the transition of Bitcoin from a "grassroots consensus asset" to being included in the "local fiscal balance sheet," representing a digital reconstruction of the logic of reserve assets from the golden age. Although the scale is still small and the mechanisms are not yet stable, the political signals it releases are far more important than the asset size: Bitcoin is beginning to become a "government-level choice."

These policy dynamics collectively contribute to a new structural landscape: stablecoins become the "on-chain dollar", Bitcoin becomes "local gold", with each serving different purposes, coexisting and hedging against the traditional currency system from the perspectives of payment and reserve. This situation, in the context of geopolitical financial fragmentation and declining institutional trust in 2025, conveniently provides another anchor logic for safety. This also explains why the crypto market maintained high-level fluctuations in mid-May despite poor macro data (persistent high interest rates and a rebound in CPI)------because the structural shift at the policy level has established long-term certainty support for the market.

After the passage of the bill, the market's reassessment of the "U.S. Treasury yield - stablecoin yield" model will also accelerate the convergence of stablecoin products towards "on-chain T-Bills" and "on-chain money market funds." In a sense, the future digital debt structure of a certain country's treasury may be partially managed by stablecoins. The expectation of the on-chain integration of U.S. Treasuries is gradually becoming clearer through the institutionalization of stablecoins.

4. Market Structure: The track rotation is intense, and the main line is still to be confirmed.

In the second quarter of 2025, the crypto market presents a highly tense structural contradiction: on a macro level, policy expectations are warming up, and stablecoins and Bitcoin are moving towards "institutional embedding"; however, on a micro structural level, there is still a lack of a truly market consensus-driven "main track". This has resulted in the overall market exhibiting characteristics of frequent rotation, weak sustainability, and temporary "idling" of liquidity. In other words, while funds are still circulating on the chain, the sense of direction and certainty has yet to be reconstructed, contrasting sharply with certain "single track bull market" cycles of 2021 or 2023.

First of all, from the sector performance perspective, the crypto market in May 2025 showed an extremely differentiated structure. Solana Meme, AI+Crypto, RWA, DeFi, and others took turns to perform strongly in a "hot potato" fashion, with each sub-track experiencing explosive cycles lasting less than two weeks, followed by a rapid dissipation of subsequent follow-up funds. For example, Solana Meme once triggered a new wave of FOMO frenzy, but due to weak community consensus and overstretched market sentiment, the market quickly corrected from its high. The AI track, like some leading projects, showed characteristics of "high Beta and high volatility," greatly influenced by the sentiment of certain AI weighted stocks, lacking the continuity of spontaneous narratives within the chain. Meanwhile, the RWA sector, represented by certain projects, has certainty, but due to the partial realization of airdrop expectations, it has entered a period of "price and value divergence" consolidation.

The data on capital flows shows that this rotation phenomenon essentially reflects a structural liquidity glut rather than the initiation of a structural bull market. Since mid-May, the market capitalization of a certain stablecoin has stagnated, while two others have seen a slight rebound. The daily on-chain DEX trading volume has maintained a fluctuation range of 2.5 to 3 billion USD, which has shrunk by nearly 40% compared to the peak in March. There has been no significant influx of new capital into the market; rather, existing capital is looking for short-term trading opportunities in "local high volatility + high sentiment". In this situation, even frequent shifts in sectors are unlikely to form a strong mainline trend, but rather further amplify the "pass the parcel" style of speculative rhythm, leading to a decreased willingness of retail investors to participate, and exacerbating the disconnect between trading heat and social heat.

On the other hand, the phenomenon of valuation stratification has intensified. First-tier blue-chip projects have significant valuation premiums, with top assets like ETH, SOL, and TON continuing to attract large capital, while long-tail projects are...