2025 H1 Review: Crypto Market Shows Resilience, New Momentum Brewing for H2

In the first half of 2025, the global economy faces the dual challenges of delayed interest rate cuts and geopolitical instability, leading to significant fluctuations in most asset markets. However, Bitcoin and the entire crypto market have demonstrated strong resilience, achieving a remarkable counter-trend rebound. As the second half of the year is about to unfold, what key factors are brewing in the market?

At the beginning of the year, the U.S. economy was widely expected to experience a sharp decline, but the actual situation has shown a steady slowdown, presenting a "soft landing". The job market remains relatively stable, with 139,000 new non-farm jobs added in May, an unemployment rate of 4.2%, and a year-on-year wage growth of 3.9%. These data indicate that although there is a slight slowdown in the labor market, it remains generally healthy. Meanwhile, inflation data is lower than expected, with the core CPI rising 2.7% year-on-year in June, a decrease from the previous value. The market generally expects that the Federal Reserve will initiate interest rate cuts in September rather than July.

However, the risk of stagflation facing the economy is intensifying. A large investment bank has lowered its forecast for U.S. GDP growth in 2025 from 2% to 1.3%, warning that tariff policies could push up inflation and suppress economic growth, trapping the economy in a "stagflation" dilemma. There are clear divisions within the Federal Reserve regarding the path of interest rate cuts; the chairman emphasized that there is "no rush to ease policy," while some officials advocate for early rate cuts to guard against economic downturn risks. This policy game reflects the contradiction between inflation and growth: cutting rates too early may exacerbate inflation, while acting too late could accelerate economic recession.

The lagging impact of tariff policies has become a key variable. The Chair of the Federal Reserve pointed out that the transmission effect of tariffs on prices may become apparent in the coming months, with inflation data for June to August potentially showing a "significant increase." One possible explanation is that companies previously alleviated short-term shocks by stockpiling, but as inventories are depleted, rising import costs will gradually push up end prices. If inflation rebounds, the Federal Reserve may be forced to delay interest rate cuts or even pause the easing cycle, further strengthening stagflation expectations.

Looking ahead to the second half of the year, there remains a high degree of uncertainty in the policy path. The non-farm employment and CPI data in July will serve as key decision-making bases. If the data confirms that inflationary pressures are under control, the Federal Reserve may proceed with the planned interest rate cut in September; if inflation exceeds expectations and rises, the market may face the impact of "hawkish delay," and even witness a repeat of the stagflation predicament of the 1970s. In this game of interest rate cuts versus stagflation, every decision made by the Federal Reserve will profoundly influence the direction of the global market.

Despite weak U.S. economic data, the market remains focused on expectations for policy easing. The anticipation of a Federal Reserve interest rate cut in June 2025, breakthroughs in stablecoin regulation, and a rebound in tech stocks have driven the U.S. stock market to show an overall upward trend: the S&P 500 rose by 4.96% for the month, and the Nasdaq index increased by 5.93%, repeatedly setting new historical highs during this period.

It is worth mentioning that crypto-related stocks, represented by stablecoin companies, have performed exceptionally well: a stablecoin company saw its stock price soar over 600% after listing on the NYSE on June 5, becoming one of the most notable fintech IPOs of 2025; another well-known cryptocurrency exchange's stock also achieved a monthly increase of 43%.

The rise behind this is the first federal regulatory bill for stablecoins passed by the U.S. Senate on June 17, which establishes a federal regulatory framework for stablecoins for the first time, specifying that issuing institutions must hold reserves in a 1:1 ratio with U.S. dollars or short-term U.S. Treasury bonds, and prohibits algorithmic stablecoins and interest-bearing stablecoins. The compliance advantages of a global second-largest stablecoin (with a market value of $61 billion) make it the preferred choice for institutions, and the surge after its listing reflects the market's strong expectations for "regulatory dividends."

The trend of "issuing shares to purchase coins" on the enterprise side has further strengthened the logic of the linkage between stocks and cryptocurrencies. According to a certain report, as of April 2025, a total of 228 listed companies worldwide held 820,000 bitcoins, with one company holding nearly 600,000 (accounting for 2.5% of the total bitcoin supply), and an average cost of about $68,000, with an unrealized profit exceeding 200%.

Many technology giants are increasing their holdings of Bitcoin through convertible bond financing, incorporating digital assets into the structural configuration of their balance sheets, thereby forming a new capital operation model of "issuing stocks to purchase coins." This shift of corporate entry from "strategic deployment" to "institutional acceptance" not only supports the price of Bitcoin (which rose 10.6% in the first half of 2025) but also enhances the legitimacy and market recognition of crypto assets. Data from a certain bank shows that the settlement volume of stablecoins reached 28 trillion USD in 2024, surpassing the total of the two largest credit card companies, validating the business potential of related institutions and revealing the capability of blockchain payments to reshape the global clearing system.

Looking ahead to the second half of the year, if the stablecoin bill passes in the House of Representatives and is signed by the President, it will officially usher in a new era of stablecoin regulation. Compliance will accelerate the inflow of institutional funds, further blurring the boundaries between the traditional stock market and the crypto market, strengthening the "coin-stock linkage"; crypto-related stocks may continue to perform strongly, becoming the core driver of structural trends in the U.S. stock market.

In June, Bitcoin prices demonstrated resilience amidst a complex situation: when conflicts in the Middle East suddenly escalated in mid-June, Bitcoin briefly fell below the $100,000 mark, but quickly recovered and returned above $100,000, moving independently and gradually decoupling from traditional risk assets. Recent research by a certain exchange and an on-chain analytics firm shows that institutional investors are continuously increasing their holdings through channels such as ETFs, and the structural changes in the market are reshaping its volatility characteristics.

Looking back at the first half of 2025, although short-term prices are affected by funding supply and geopolitical conflicts, on a more fundamental level, the crypto market may be undergoing the most profound paradigm shift since its inception. Its development trajectory can no longer be simply defined by market sentiment or technical indicators, but rather is showing new vitality under the combined forces of technology, capital, regulation, and ecology. The market performance in June clearly reveals that this industry is gradually transforming into a mature digital asset infrastructure.

The institutional wave reached new heights in June, with the global crypto ETF scale surpassing the milestone of $1.1 trillion, and a single asset management company's Bitcoin ETF attracted a net inflow of $4.9 billion in a month. More notably, the level of participation from traditional financial institutions is undergoing a qualitative change. For example, a certain investment bank has begun offering Bitcoin collateralized loan services in partnership with cryptocurrency exchanges, a level of engagement that far exceeds Wall Street's tentative layouts during the 2021 bull market. At the same time, the Federal Reserve's shift in monetary policy is expected to inject new variables into the market; historical data shows that a Fed rate cut cycle is usually accompanied by a significant rise in Bitcoin.

In terms of regulation, the passage of the stablecoin bill in the United States and the establishment of the stablecoin licensing system in Hong Kong mark the initial compliance framework that major financial centers have built for digital assets. This policy certainty is attracting more traditional capital to enter the market.

In addition, senior officials in the U.S. government have revealed that they are working on building a strategic Bitcoin reserve infrastructure. The executive order issued by the current president in March this year did not mandate the Treasury to disclose the government's holdings of Bitcoin, so we can expect it to actively publicize relevant information in the second half of the year. The government is "highly inclined" to increase its Bitcoin holdings in a budget-neutral manner, which means it will provide funding support for Bitcoin purchases through internal fund restructuring or cost savings without increasing fiscal deficits or taxpayer burdens.

In short, looking back from the midpoint of 2025, the trajectory of the crypto market has fundamentally differed from the early stage driven purely by speculation.

The head of digital asset research at a certain bank once predicted that the target price for Bitcoin by the end of 2025 would be $200,000. The dominant narrative behind this market cycle has shifted from being linked to risk assets to being driven by capital flows, with funds pouring in through various forms. Bitcoin is becoming a tool for reallocating capital away from U.S. assets, indicating that this surge is not only a price fluctuation but also a reflection of global capital allocation and macroeconomic trends. In this sense, the second half of 2025 is likely to be a historical turning point for the deep coupling of the traditional financial system and the digital currency ecosystem.

The current BTC price remains in the high range of $100,000 to $120,000. Looking ahead to the second half of the year, with multiple favorable factors such as a possible interest rate cut by the Federal Reserve, continued growth in corporate encryption adoption, and clearer regulatory policies, a new period of steady development is expected.