Original Title: (Huobi Growth Academy: Macro Report on the Crypto Market: U.S.-China Economic Recovery and 'Double Reduction' Resonance, Bitcoin Approaches $100,000 Again, Web3 Ecosystem May Welcome a New Cycle)
Original Source: Huobi Growth Academy
1. Macroeconomic Background: Resonance of U.S.-China Policies and Market Sentiment Shift
In May 2025, the People's Bank of China announced the implementation of the 'double reduction' policy, specifically lowering the reserve requirement ratio (RRR) by 0.5 percentage points, releasing about 1 trillion yuan of long-term liquidity, while also reducing the policy interest rate by 0.1 percentage points to 1.4%. The introduction of this policy has had a profound impact on the traditional financial market, while also providing potential strategic opportunities for the crypto market and the Web3 ecosystem. At this time, optimistic expectations for high-level economic and trade negotiations between the U.S. and China further boosted global market risk appetite.
1.1 U.S.-China Economic and Trade Recovery: Strong Stimulus to Market Sentiment
The economic and trade relationship between the U.S. and China has always been a focal point for the global market. In recent years, due to the impact of the U.S.-China trade war and tariff policies, the global economy has faced considerable uncertainty, and investors' risk appetite had decreased at times. However, with the release of the People's Bank of China's 'double reduction' policy, expectations for the recovery of U.S.-China economic and trade relations have significantly increased, leading to a general rise in risk asset prices, especially in the crypto market. The Chinese government has conveyed an important signal behind the 'double reduction' policy: the monetary policy easing cycle has arrived, and economic growth is expected to receive new support. In this policy context, market liquidity will be released, driving higher enthusiasm for investments in traditional assets such as stocks and commodities. At the same time, high-level economic and trade negotiations between the U.S. and China are about to commence, particularly with the upcoming meeting between Chinese Vice Premier He Lifeng and U.S. Treasury Secretary Janet Yellen, further enhancing market optimism regarding future economic and trade cooperation. This series of policy signals not only reshapes investor sentiment but also brings significant positive impacts to the crypto market. The rise of risk assets such as Bitcoin directly reflects the shift in market sentiment. The increase in risk appetite has gradually enhanced investors' acceptance of non-traditional assets like cryptocurrencies, with Bitcoin's price approaching the historical high of $100,000.
1.2 'Double Reduction' Policy and Global Liquidity
China's 'double reduction' policy has significant global influence. By lowering the reserve requirement ratio and policy interest rates, the People's Bank of China has injected ample liquidity into the market, releasing 1 trillion yuan of funds. This monetary policy easing not only positively impacts the Chinese economy but may also trigger a wave of capital flow globally. Especially against the backdrop of the U.S. economy still facing high inflation and high unemployment risks, China's policies appear particularly attractive. Investors in global capital markets, especially in Asia, have reacted positively to this policy. With the significant release of liquidity, global capital will actively seek new investment channels. In this context, demand for cryptocurrencies such as Bitcoin has significantly increased among investors in traditional assets and the crypto market. As 'digital gold,' Bitcoin's value is highlighted in a global monetary easing environment, becoming an important tool for investors to hedge against inflation and currency depreciation.
China's central bank 'double reduction' policy not only promotes the recovery of the domestic economy but also significantly raises the risk appetite in the international market. Asian stock markets have surged, and prices of commodities like iron ore and steel continue to rise, prompting traditional market investors to seek new investment opportunities in the crypto market. Due to Bitcoin's fixed supply and anti-inflation properties, an increasing amount of capital views it as a long-term value storage tool.
1.3 Federal Reserve Policy and Rate Cut Expectations
Amidst a significant increase in global market liquidity, the trajectory of the Federal Reserve's monetary policy has also become a focal point for the market. Previously, due to persistently high inflation in the U.S., the Federal Reserve maintained a high-interest-rate level. However, recent economic data indicates that although the U.S. economy continues to expand steadily, the dual pressures of high inflation and high unemployment pose greater challenges to the Federal Reserve's monetary policy. The expectation for rate cuts has gradually weakened, and the market widely believes that the Federal Reserve will maintain its current interest rate policy in the short term to avoid excessively stimulating the economy. This weakening of rate cut expectations has directly led to a strengthening of the dollar. The appreciation of the dollar has profound effects on global capital flows, especially in the crypto asset market. Despite the strength of the dollar, the demand for crypto assets in the market has not significantly declined; instead, there is a renewed interest in 'digital gold' as a safe-haven asset. Investors are seeking stable value storage tools amidst the uncertainty of Federal Reserve policies, thus increasing the demand for Bitcoin.
Moreover, the Federal Reserve's monetary policy trajectory also influences regulatory expectations for the crypto market. As the Federal Reserve may take more easing measures, market expectations for policy support for crypto assets are gradually rising, especially as some states in the U.S. have already passed legislation regarding cryptocurrency reserves. In the future, as the U.S. government further relaxes regulations on the crypto market, the crypto asset market will welcome a broader institutional dividend period.
1.4 Shift in Market Sentiment and Investment Strategies
Overall, the resonance of U.S.-China policies and the shift in market sentiment will have a profound impact on global capital markets, especially the crypto market. With the implementation of China's 'double reduction' policy and the recovery of U.S.-China economic and trade relations, global risk appetite has significantly increased, and investors' sentiment has turned more positive, especially in the cryptocurrency market, where demand for risk assets like Bitcoin has surged. Bitcoin's price nearing $100,000 reflects the market's high recognition of this asset. However, in this macro context, investors still need to respond cautiously to potential market risks. As global monetary policy changes, the strength of the dollar and the uncertainty of Federal Reserve policy may bring volatility to the crypto market. Therefore, investors need to maintain flexible strategies, adopting a 'core + satellite' investment portfolio, positioning Bitcoin as digital gold for foundational allocation, and focusing on Web3 projects with practical application scenarios, especially innovations in cross-border payments and digital identity authentication.
In summary, driven by the resonance of U.S.-China policies and the shift in market sentiment, the crypto market and Web3 ecosystem are ushering in new development opportunities. This macro background not only enhances investors' risk appetite but also lays the foundation for the future development of crypto assets and blockchain technology.
2. Bitcoin Market Dynamics: Price Approaching $100,000
Bitcoin has shown a strong upward trend in 2025, with its price repeatedly approaching the psychological barrier of $100,000, making it one of the most eye-catching assets of the year. The forces driving this round of increase are complex and diverse, involving not only the resonance of macro policy backgrounds but also the structural evolution within the crypto industry, as well as the dual tug-of-war of sentiment and expectations. In a context where the traditional financial system faces widespread uncertainty, Bitcoin has once again taken center stage in the global capital perspective. Behind the price curve is not only the concentrated release of safe-haven demand but also a tangible reflection of institutional recognition, capital inflow, and valuation reconstruction.
Looking back at the end of 2024 to the beginning of 2025, Bitcoin's performance significantly benefited from the policy easing rhythm of major global economies. In particular, the 'synchronous dovish shift' in U.S. and Chinese monetary and fiscal policies injected unprecedented liquidity into the market. China has successively lowered the reserve requirement ratio and policy interest rate twice, rapidly raising risk appetite for domestic funds, while the Federal Reserve, under pressure from Trump, was forced to pause interest rate hikes and released expectations for future rate cuts, weakening the dollar index and further raising the 'anchor' for global assets. In this context, Bitcoin, as a scarce, non-sovereign, and strongly consensus-driven digital asset, once again became a 'safe-haven currency + growth asset' in the eyes of global investors. It hedges against fiat currency depreciation while also fulfilling the 'digital gold' role in the structural cracks of the monetary system.
Unlike past bull market cycles, a significant difference in this round of increase is that institutional investors have become the dominant force. Large asset management institutions in the U.S., such as BlackRock, Fidelity, and ARK, are actively laying out Bitcoin spot ETFs, pushing Bitcoin towards a path of institutional allocation. Meanwhile, in places like Hong Kong, Dubai, and Europe, financial products targeting crypto assets are increasingly diverse, regulatory transparency is improving, allowing Bitcoin to enter more traditional capital pools in a compliant manner. The entry of this institutional-level capital not only enhances the depth and stability of the Bitcoin market but also significantly reduces its previously 'purely emotion-driven' volatility structure, resulting in a more structured and sustained upward trend.
At the same time, the supply-side scarcity logic continues to amplify Bitcoin's value anchoring ability. The fourth halving event of Bitcoin in April 2024 reduced the block reward from 6.25 to 3.125 coins, greatly compressing new supply. With Bitcoin's blockchain inflation rate dropping to below 1% and gradually approaching the annual supply growth rate of gold, its narrative as a 'deflationary currency' is further strengthened. Meanwhile, on the demand side, multiple factors such as ETFs being listed, central bank purchases, sovereign fund allocations, and rising global risk aversion are driving exponential growth. The asymmetric supply-demand structure constitutes the fundamental support for Bitcoin's price increase over the medium to long term.
It is worth noting that the process of Bitcoin nearing $100,000 is also accompanied by intense emotional fluctuations and technical adjustments. On one hand, there are concentrated trading behaviors of whale accounts in the market, especially near key integer points, accompanied by high-frequency algorithms and large-scale arbitrage, resulting in short-term dramatic price swings and surging volatility. On the other hand, some older funds take the opportunity to distribute, combined with retail investors' 'fear of heights' sentiment, triggering phase-specific corrections. On-chain indicators from platforms like Glassnode clearly show that long-term holders are gradually reducing selling pressure, while new entrants are concentrated at high prices, indicating a shift in market structure from early faith-based users to mainstream incremental users.
In terms of market public opinion, the media widely publicizes the historical significance of Bitcoin nearing $100,000, creating a strong 'FOMO effect' (fear of missing out), attracting a large number of retail investors to enter the market short-term. However, this media-driven enthusiasm also brings typical 'bubble expectations,' with some short-term funds engaging in excessive speculation, especially concentrated trading by high-leverage users, which is likely to trigger cascading liquidations at critical price points. Therefore, although long-term logic supports Bitcoin's price breaking new highs, there remains the possibility of severe fluctuations in the short term, as the market enters a phase of gaming between enthusiasm and risk.
Overall, Bitcoin approaching $100,000 is not only a result of the resonance of technical and policy factors but also represents its asset positioning leap within the global capital system. Under the macro framework of de-dollarization, a resurgence of global risk aversion, and the entry of institutional funds, Bitcoin is no longer merely a 'speculative asset' but a strategic asset in the new round of global wealth redistribution. Although short-term adjustment risks remain, from a medium to long-term perspective, this round of increase is not a flash in the pan but the starting point of a new consensus cycle. Investors need to find a balance between enthusiasm and calm, understanding that Bitcoin is not just about price but also a resonance of belief, system, and era.
3. Development of the Web3 Ecosystem: Driven by Policy and Technology
With the easing of macro policies and continuous breakthroughs in key technologies, the Web3 ecosystem is entering a new development cycle. It is no longer just a tool for speculation around crypto assets but is gradually evolving into the underlying infrastructure for global digital governance, cross-border collaboration, and the value internet. In this process, the three forces of policy guidance, technological innovation, and application expansion are interwoven, forming the main axis that drives Web3 from concept to large-scale implementation.
1. Policy Support
Since 2025, the U.S. policy attitude towards cryptocurrencies and the Web3 field has been undergoing a key shift from 'regulatory suppression' to 'strategic acceptance,' especially as Bitcoin and core Web3 technologies are gradually being incorporated into the long-term considerations of national financial and technological development. The most representative signal is the 'Bitcoin Reserve Bill' officially passed in May 2025 by New Hampshire, which requires the state treasury to hold a portion (initially 5%) of its state government financial reserves in Bitcoin over the next 24 months and supports the inclusion of Bitcoin in the public accounting system. Although this legislative initiative originates from local government, it has far-reaching implications.
Firstly, it signifies that Bitcoin is no longer just a 'risky asset' in certain jurisdictions but is regarded as 'digital gold' with long-term value storage capabilities, serving a functional role in combating inflation and enhancing fiscal independence. This provides policymakers, including those from other states, with a 'pilot template,' potentially triggering a trend of 'local government BTC adoption,' injecting long-term institutional funding into the Web3 ecosystem. Secondly, the passage of this bill also enhances policy certainty around Bitcoin and Web3 technologies, alleviating the uncertain risks previously caused by conflicts among federal regulators such as the SEC and CFTC. For example, incentivized by this bill, the New Hampshire Treasury has signed memorandums of understanding with two local digital asset custodians, clearly stating that it will explore on-chain transparency and public account integration methods, providing a practical blueprint for DAO-style financial systems.
More broadly, multiple state governments in the U.S. are currently in the early stages of 'policy competition.' In addition to New Hampshire, crypto-friendly states like Texas and Wyoming are also advancing experimental legislation regarding crypto mining, on-chain finance, and compliance for smart contracts. Meanwhile, at the federal level, the Financial Innovation and Technology Future Act (FIT21) is being promoted, proposing to define mainstream digital assets such as Bitcoin and Ethereum as 'non-security commodities' and pushing for a unified regulatory framework to clarify core issues such as asset issuance, exchange registration, and stablecoin audits. These dynamics reinforce the long-term institutional confidence of the U.S. market in the Web3 ecosystem and provide clear policy anchors for enterprises and capital entry.
From an international perspective, the shift in the United States also has an 'external spillover effect.' As the global center of capital and technology, any positive legislation from the U.S. could drive other countries or regional markets to 'follow suit' in terms of policy. For example, recently, financial regulatory authorities in the UK, South Korea, and Japan have begun to re-examine the compliance mechanisms for stablecoins or accelerate the opening of Web3 'regulatory sandboxes,' thereby driving capital flows and ecological collaboration in the Web3 space on a global scale.
2. Technological Progress
The maturity of technology is a key prerequisite for Web3 to move from 'narrative economy' to 'actual deployment.' From 2024 to the present, foundational technologies such as modular blockchains and zero-knowledge proofs (ZKP) have entered the practical stage, significantly enhancing the performance, composability, and privacy protection capabilities of Web3 networks. The design concept of modular blockchains separates execution, settlement, and data availability, allowing developers to choose the optimal combination according to business needs. Projects such as Celestia and EigenLayer provide flexible underlying resource scheduling capabilities, offering 'on-demand customization' of infrastructure for on-chain applications. The explosive progress of zero-knowledge proof technology further endows Web3 with dual capabilities of 'computation + privacy.' ZK-rollup, as the core solution of Ethereum Layer 2, has entered a large-scale deployment phase, while cutting-edge cross-disciplinary fields such as ZKML (zero-knowledge machine learning) are also beginning to show great potential in on-chain model verification and off-chain data compliance calls.
Additionally, protocols like MCP (Model Context Protocol), which focus on the integration of AI and Web3, are also beginning to take shape, moving the training, invocation, and verification processes of AI models on-chain, making 'on-chain intelligence' no longer confined to script logic but capable of self-evolution. These new paradigm technologies are gradually breaking through the bottlenecks of 'high gas fees, low interactivity, weak privacy protection' in the existing Web3 system, making on-chain applications competitive with Web2 experiences.
3. Application Scenario Expansion
The relaxation of policies and breakthroughs in technology ultimately point to the continuous expansion of Web3 application scenarios and the rapid accommodation of real demands. Taking cross-border payments as an example, benefiting from the popularity of stablecoins (such as USDC, USDT) and the maturity of on-chain settlement mechanisms, more and more small and medium-sized export enterprises and digital service providers are beginning to use stablecoins for direct settlement, effectively avoiding issues of exchange rate fluctuations and low transfer efficiency in traditional financial systems. Especially in emerging markets like Southeast Asia, Latin America, and the Middle East, which combine 'weak financial infrastructure + high acceptance of crypto,' Web3 payments have become a practical trend.
Digital identity authentication (DID) has also become an important breakthrough for Web3 deployment. In the context of rampant AI content and an escalating trust crisis in Web2 platforms, on-chain verifiable identity systems (such as Worldcoin, Polygon ID, Sismo, etc.) are increasingly integrated into key areas such as DAO governance, DePIN device access, and cross-chain credit assessment, addressing foundational issues of 'who is the user' and 'who owns the data.' Moreover, scenarios such as on-chain social, gaming, civic voting, and education credential verification have also welcomed explosive opportunities due to the maturity of DID systems.
More broadly, the Web3 ecosystem has formed three types of 'application driving forces': first, there is the 'chain reform' upgrade demand from traditional industries, such as real estate, insurance, and logistics, seeking to improve efficiency and transparency through on-chain solutions; second, the evolutionary progression of crypto-native demands, such as innovations from DeFi 1.0 to Restaking, SocialFi, AI Agents, etc.; third, the cultural resonance of global youth and developer communities regarding free collaboration and value sovereignty, forming the cultural foundation for the long-term centripetal force of the Web3 community.
4. Risk Factors and Investment Strategies
Although the current Web3 ecosystem and Bitcoin market exhibit strong growth momentum, investors still need to pay close attention to potential systemic and non-systemic risks. In the current context of escalating tug-of-war between bullish and bearish forces, and increasingly complex interactions between policies and markets, formulating rational and forward-looking investment strategies is particularly crucial.
First, from a macro perspective, the global interest rate policy direction remains highly uncertain. Although the Federal Reserve has released easing expectations against the backdrop of easing inflation and employment pressures, if inflation data rises again or geopolitical conflicts intensify, it may force a return to a hawkish stance, thus impacting the valuation of risk assets. Particularly, since Bitcoin has become highly financialized and its sensitivity to macro policies has significantly increased, any expectations of 'delayed rate cuts' or 'returning to balance sheet reduction' could trigger severe market fluctuations.
Secondly, regulatory disturbances continue to pose significant external variables. Although countries such as the United States are advancing the legislative process for crypto assets, there remains gray areas in the enforcement standards of agencies such as the SEC and CFTC before the new regulatory framework is officially implemented. In extreme cases, they may even adopt 'selective enforcement' actions against core infrastructures such as DeFi platforms, stablecoin projects, and DEX exchanges. Additionally, the implementation of the EU (MiCA) framework may also impose compliance pressures on certain projects, especially public chain ecosystems involving KYC/AML mechanisms, which will have to face higher operating costs and identity governance challenges.
Thirdly, from the perspective of the on-chain ecosystem itself, technological risks should not be overlooked. Although zero-knowledge proofs, Layer 2 bridging technologies, and modular blockchains have great potential, they still face issues such as attacks, code vulnerabilities, or immature protocols. For instance, in the first quarter of 2025, a cross-chain bridge protocol was attacked due to a smart contract logic flaw, resulting in over $300 million worth of assets being stolen, which is a typical systemic 'on-chain black swan' event. This serves as a reminder to investors that the other side of technological innovation is that systemic risks have not been fully priced by the market.
Additionally, structural differentiation in the market may lead to phase-specific bubbles. As the total market capitalization of the crypto market approaches historical highs, hot assets (such as meme coins, AI coins, and modular concept coins) are emerging one after another, accompanied by capital speculation phenomena. Some projects that have yet to achieve commercial landing may be overvalued under emotional dominance, and once the hot market cools, concentrated withdrawals may easily occur. This requires investors to maintain fundamental analysis capabilities and valuation discipline while pursuing high returns.
In this context, investment strategies need to be more inclined towards 'offensive defense.' Specifically:
For risk-averse investors, Bitcoin should be viewed as the 'asset anchor in the crypto domain' for long-term allocation, gradually increasing holdings during each round of corrections, prioritizing mainstream assets with institutional recognition.
For investors seeking growth returns, attention can be paid to projects in the infrastructure sector that have real application landings, active developer ecosystems, and clear protocol upgrade paths, such as Layer 2, ZK, modular chains, and DePIN. However, they should avoid heavily investing in short-term hot spots during periods of high market volatility.
In terms of operational strategies, priority should be given to methods such as staggered position building, rolling rebalancing, and setting stop-loss and take-profit ranges for dynamic management, avoiding extreme decisions driven by emotions.
Additionally, project selection should strengthen considerations of 'policy sensitivity,' prioritizing emerging projects that grow under clear compliance trends (such as those in the U.S., Hong Kong, UAE, etc.), to enhance the portfolio's risk resistance.
In summary, the crypto market in 2025 is at a turning point in the cycle. While full of opportunities, it also conceals risks. Only by understanding structural trends can one build a portfolio allocation logic that traverses cycles, thereby steadily advancing in a future market characterized by oscillation and innovation.
5. Conclusion
In the first half of 2025, the crypto market entered a new structural upcycle under the multiple drivers of the resonance of U.S.-China policies, warming liquidity, and accelerated technological innovation. Bitcoin, as a value-anchored asset, continues to gain mainstream financial recognition, with its price approaching the $100,000 mark, releasing strong market signals; the Web3 ecosystem, supported by inclusive U.S. policy and breakthroughs in foundational technologies such as ZK and modularization, further expands its application scenarios, presenting a dual resonance pattern of 'from technology to system.' However, policy variables, regulatory uncertainties, market speculation, and technological security risks remain shadows that cannot be ignored. Looking ahead to the second half of the year, investors should maintain calm judgment amidst structural prosperity and adhere to a strategy that combines value-driven, policy-oriented, and safety-conscious logic to truly navigate the cycle and capture the next stage of core dividends.
This article is contributed and does not represent the views of BlockBeats.
