Review of the First Half of 2025: Resilience of the Crypto Market Highlights, Huge Potential in the Second Half

In the first half of 2025, the global financial markets face multiple challenges. Under the dual pressure of delayed interest rate cut expectations and geopolitical turmoil, most asset classes perform poorly. However, the crypto market, represented by Bitcoin, demonstrates remarkable resilience, successfully withstanding external shocks and achieving considerable growth. This performance highlights the unique appeal and potential of crypto assets as an emerging asset class. As the second half of the year unfolds, what key factors are brewing in the market that could become new engines for further development of the crypto market?

Economic Situation: Soft Landing and Stagflation Risks Coexist

At the beginning of the year, there were widespread expectations that the US economy would experience a severe recession. However, the actual situation is that the economy is showing signs of a "soft landing." The job market remains relatively stable, with an increase of 139,000 non-farm jobs in May, an unemployment rate of 4.2%, and a year-on-year wage growth of 3.9%. These data indicate that while the labor market has slowed down, it remains overall healthy. In terms of inflation, the core CPI in June rose by 2.7% year-on-year, slightly down from the previous value, and has not yet clearly reflected the impact of tariff policies.

However, the risk of stagflation is intensifying. Some financial institutions have lowered their 2025 U.S. GDP growth forecast from 2% to 1.3%, warning that tariff policies may drive up inflation and suppress growth, trapping the economy in a "stagflation" dilemma. There are divisions within the Federal Reserve regarding the path of interest rate cuts, reflecting the conflict between inflation and growth. Cutting rates too early may exacerbate inflation, while acting too late could accelerate economic recession.

The lagging effect of tariffs is a key variable. Inflation data in the coming months may show a "significant increase." This could be because companies previously mitigated short-term shocks by stockpiling in advance, but as inventory is 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.

Looking ahead to the second half of the year, the policy path remains highly uncertain. Employment and inflation data in July will be key decision-making criteria. If the data confirms that inflationary pressures are manageable, a rate cut in September may occur as scheduled; if inflation rises unexpectedly, the market may face the "hawkish delay" impact, and even the re-emergence of the stagflation dilemma of the 1970s.

Stock Market Performance: Crypto Stocks Lead the Market

Despite weak economic data, the U.S. stock market overall showed a volatile upward trend driven by expectations of interest rate cuts, breakthroughs in stablecoin regulation, and a rebound in technology stocks. In June, the S&P 500 rose by 4.96%, and the Nasdaq increased by 5.93%, repeatedly setting new historical highs.

The performance of crypto-related stocks has been particularly impressive. Stablecoin giant Circle saw its stock price soar over 600% after going public on the New York Stock Exchange on June 5, becoming one of the most notable fintech IPOs of 2025. This surge is backed by the passage of the GENIUS Act in the U.S. Senate, which establishes a federal regulatory framework for stablecoins for the first time, clarifying reserve requirements for issuing institutions and prohibiting algorithmic stablecoins and interest-bearing stablecoins. As the world's second-largest stablecoin issuer, Circle's USDC has become the preferred choice for institutions due to its compliance advantages, and the post-IPO surge reflects strong market expectations for "regulatory dividends."

It is worth noting that the trend of companies "issuing stocks to purchase coins" has further strengthened the logic of the linkage between stocks and coins. As of April 2025, a total of 228 listed companies worldwide hold 820,000 bitcoins. Tech giants like Tesla have increased their holdings of bitcoins through convertible bond financing, incorporating digital assets into the structural allocation of their balance sheets, creating a new mode of capital operation. This trend not only supports the price of bitcoin (which rose by 10.6% in the first half of 2025) but also enhances the legitimacy and market acceptance of crypto assets.

Bitcoin Performance: Resilience and Maturity Coexisting

In June, Bitcoin demonstrated resilience amid a complex situation. Although the situation in the Middle East escalated at one point, causing prices to briefly fall below $100,000, it quickly rebounded and returned above $100,000, gradually decoupling from traditional risk assets. Research shows that institutional investors are continuously increasing their holdings through channels such as ETFs, reshaping market structure and volatility characteristics.

In the first half of 2025, the crypto market may be experiencing the most profound paradigm shift since its inception. Its development trajectory is no longer defined solely by market sentiment or technical indicators, but is showing new vitality under the combined forces of technology, capital, regulation, and ecology. The market performance in June clearly reveals that the industry is gradually transforming into a mature digital asset infrastructure.

The wave of institutionalization has reached new heights, with the global crypto market ETF scale surpassing $1.1 trillion. The level of participation by traditional financial institutions is also undergoing a qualitative change, for example, a major investment bank has started offering Bitcoin collateralized loan services. Meanwhile, the shift in the Federal Reserve's monetary policy is expected to inject new variables into the market.

On the regulatory front, the passage of the U.S. "GENIUS Act" and the establishment of the stablecoin licensing system in Hong Kong mark the initial compliance framework set up for digital assets by major financial centers. This policy certainty is attracting more traditional capital to enter the market.

In addition, there are reports that the United States is working on building strategic Bitcoin reserve infrastructure, with the government possibly increasing its Bitcoin holdings in a budget-neutral manner. This means that the U.S. government will provide funding support for Bitcoin purchases through internal fund restructuring or cost savings, without increasing the fiscal deficit or taxpayer burden.

Outlook for the Second Half of the Year

Looking back from the midpoint of 2025, the development trajectory of the crypto market has fundamentally differed from the early stage driven purely by speculation. Analysts predict that the target price for Bitcoin by the end of 2025 will be $200,000. The dominant narrative behind this market cycle has shifted from being linked to risk assets to being driven by capital flows. Bitcoin is becoming a tool for reallocating funds away from U.S. assets, reflecting global capital allocation and macroeconomic trends.

The current Bitcoin price remains in the high range of 100,000 to 120,000 USD. Looking ahead to the second half of the year, with multiple positive factors such as potential interest rate cuts by the Federal Reserve, continuous growth in corporate encryption adoption, and clearer regulatory policies, the crypto market is expected to usher in a new period of robust development. The second half of 2025 may very well become a historical turning point for the deep coupling of the traditional financial system and the digital currency ecosystem.