2025 Crypto Market Analysis

1. Macroscopic Perspective

In May 2025, the US economy is at a critical turning point. Inflation continues to decline, the labor market remains resilient, monetary policy has entered a wait-and-see period, trade policies bring new uncertainties, and fiscal measures similar to quantitative easing are being implemented, while adjustments in debt ratings are also affecting market expectations. In this environment, the crypto market demonstrates strong resilience, and the global risk asset structure may face a new round of re-evaluation.

inflation trend

In April, the unadjusted Consumer Price Index (CPI) year-on-year fell to 2.3%, below market expectations, marking a nearly four-year low, indicating that price pressures continue to ease. The seasonally adjusted CPI month-on-month was 0.2%, also below expectations, suggesting insufficient momentum for inflation rebound in the short term. Meanwhile, the U.S. Treasury began a $40 billion Treasury bond buyback operation, which the market generally views as a "quasi-quantitative easing" measure aimed at releasing liquidity through the repurchase of issued Treasury bonds and refinancing at low interest rates. This operation has become an important factor supporting the prices of risk assets.

labor market

In April 2025, non-farm employment increased by 177,000, far exceeding market expectations, reflecting the resilience of the job market. This data provides a basis for the Federal Reserve to maintain a wait-and-see policy. The Federal Reserve closely monitors employment data as the basis for policy adjustments. Continuous strength in employment alleviates market concerns about an economic recession on one hand, while also reducing the likelihood of multiple unexpected interest rate cuts within the year.

monetary policy dynamics

The Federal Reserve Chairman stated that he will reassess the current monetary policy framework and may abandon the "average inflation targeting" mechanism. He pointed out that frequent supply-side shocks are changing the traditional policy environment, prompting the Fed to pay more attention to structural inflation risks. In the future, the Fed may extend the duration of high interest rates and even increase its holdings of medium- to long-term government bonds through balance sheet expansion to control the rise in long-term rates. The policy tone will be more flexible, with no urgent need for preemptive rate cuts in the short term, and it emphasizes that the policy direction in June will be determined based on multiple economic indicators.

Trade Policy and Global Economic Outlook

In early May, the United States announced a 50% tariff on EU goods starting June 1, which was later postponed to July 9. However, the threat of high tariffs has impacted market sentiment. Given the frequent changes in trade policy, uncertainty regarding future policy directions has significantly increased. Regarding US-China relations, the People's Bank of China implemented a "reserve requirement ratio cut + interest rate cut" policy in May, releasing 1 trillion yuan in liquidity and lowering the policy interest rate to 1.4%. This move is seen as the start of a new round of easing, and expectations for improvement in US-China relations have risen, along with a simultaneous increase in risk appetite.

2. Crypto Market Overview

trading volume and daily growth rate

As of May 27, the average daily trading volume in the market was $117.4 billion, an increase of 15.8% compared to the previous period, indicating a continued recovery in capital activity, with the overall market exhibiting high volatility characteristics. During the two phases from May 6 to 12 and from May 21 to 22, trading volume surged significantly, with single-day trading volume once exceeding $180 billion. During this period, the price of Bitcoin broke through $100,000 and $110,000, significantly heating up market bullish sentiment.

Total market capitalization and daily growth

As of May 27, the total market capitalization of cryptocurrencies has risen to $3.56 trillion, an increase of 17.0% compared to last month. Among them, Bitcoin's market share is 62.6%, while Ethereum's market share is 9.6%, with the latter showing a growth of 29.7% compared to the previous period, indicating a continued preference for allocating funds towards Ethereum in this round. Since May 8, the total market capitalization has surpassed $3.3 trillion and has been steadily rising since then, showing a clear trend of structural market recovery.

May New Hot Tokens

Among the popular tokens launched in May, venture capital-backed projects still dominate, including Layer 2 projects like SOPH and B2. In addition, USD1, as one of the popular narratives of May, has also garnered wide market attention along with related stablecoins and their associated projects such as B, Lista, and Staketone.

3. On-chain Data Analysis

BTC, ETH ETF inflow and outflow situation

In May, the net inflow of Bitcoin ETFs was approximately $5.77 billion, while the net inflow of Ethereum ETFs was about $317 million. The price of Bitcoin rose from $94,212 at the beginning of the month to $108,969, an increase of about 13.5%. The performance of Ethereum was even more outstanding, rising from $1,794 to $2,635, a gain of 31.9%.

stablecoin inflow and outflow situation

In May, the total circulation of stablecoins increased by approximately $7.28 billion, mainly driven by inflows from USDT and USDC. USDT, USDE, and DAI became the main drivers of growth this month.

4. Price Analysis of Mainstream Currencies

BTC price analysis

Bitcoin is trying to maintain above $109,588, indicating that there is buying interest on every slight pullback. If buyers can sustain this trend, it will pave the way for further increases. Institutional investors continue to inject funds into Bitcoin exchange-traded products, with a recorded inflow of $2.9 billion last week.

ETH price analysis

Ethereum rebounded from the 20-day EMA ($2,425) on May 25, indicating strong demand at lower price levels. Bulls will attempt to break through the resistance level of $2,738 again. If successful, the ETH/USDT trading pair could rise to $3,000, although bears may try to halt the rise near $2,850.

SOL price analysis

Solana found support at the 20-day EMA ($169) on May 25, indicating that market sentiment remains positive. Bulls will attempt to break through the resistance level at $188 again. If successful, the SOL/USDT trading pair could rise to $210 and may reach $220.

5. Hot Events of the Month

USD1 Ecology

In mid-May, as the price of Bitcoin broke its historical high and a certain trading platform launched USD1, its popularity soared, and the USD1 ecosystem cooperation projects also came under market attention. As of May 28, the market capitalization of the USD1 stablecoin has surpassed $2.1 billion, rising to become the seventh largest stablecoin. The main advantage of USD1 lies in its issuance by WLFI, led by the Trump family, making it the first stablecoin project backed by a president.

The current narrative around USD1 revolves around "presidential endorsement + RWA track + expectations of the stablecoin bill". Recently, the prices of several tokens related to USD1's partners have surged significantly, driving the market's enthusiasm for the "WLFI+USD1" concept. If the U.S. stablecoin bill is successfully passed in the future, USD1, as a stablecoin project personally endorsed by the president, is expected to play a more important role in the future crypto ecosystem along with its deeply cooperative projects.

Believe has risen to become a new player in the MEME platform.

As of May 28, the core token Launchcoin of the Believe platform has risen from $0.014 at the beginning of the month to a peak of $0.36, with its market capitalization approaching $310 million at one point. The platform focuses on the concept of "social assetization," where users can automatically trigger token issuance by tweeting with $TICKER and @launchcoin on social platforms.

With the innovative token issuance mechanism and the surge of Launchcoin, the activity level of the Believe platform has rapidly increased. However, after the platform-supported token $YAPPER was launched, it plummeted over 66%, raising doubts within the community and causing a sharp decline in ecological enthusiasm. As of May 28, Believe has issued over 27,000 tokens, with a total market capitalization of approximately $290 million, of which Launchcoin contributed nearly 63%.

Overall, the current MEME market platforms are highly homogeneous. Although Believe has simplified the token issuance process, it has not changed the logic of MEME issuance. Whether it can maintain its popularity in the future will depend on whether it can continue to innovate or create projects that truly have wealth effects.

6. Outlook for Next Month

Stablecoin bill approval progress

This month, the "GENIUS Act" passed the debate motion with a result of 69 votes in favor and 31 votes against, entering the revision process. The core of the bill includes key elements such as issuance eligibility restrictions, reserve requirements, compliance obligations, user protection, and international applicability. The bill stipulates that only specific financial institutions can issue payment stablecoins, and all stablecoins must be 100% backed by highly liquid assets, with strict isolation of customer assets.

The "GENIUS Act" is not only a regulatory framework for stablecoins but also a strategic move by the United States to strengthen the international dominance of the digital dollar. Against this backdrop, stablecoin projects with strong compliance are expected to gain greater market recognition in the future.

Ethereum ETF pledge approval progress

In April, regulatory agencies postponed decisions on several Ethereum ETFs, with the final decision deadline set for the end of October. In contrast, the progress of Ethereum ETF staking in Hong Kong has been comparatively fast, with multiple funds already approved for ETF staking.

Combining the experience of the previous approvals of Bitcoin and Ethereum ETFs, the market generally expects that U.S. regulators will soon reach a regulatory framework regarding the relevant mechanisms, promoting the final approval of the Ethereum spot ETF. Once this is achieved, it will not only advance the institutionalization process of Ethereum as an asset class, but Ethereum and related staking assets may also welcome a new wave of market enthusiasm.