Against the backdrop of delayed interest rate cuts and geopolitical turmoil, almost all assets are trembling in the first half of 2025. However, Bitcoin has led the entire crypto world to complete a beautiful Jedi counterattack, showing strong resilience and growth potential. The second half of the year is about to begin, and what key potential is brewing in the market?
At the beginning of this year, the outside world generally expected that the US economy would take a sharp dive on this roller coaster ride, but from the current point of view, it has walked out of the "soft landing" trend of steady decline, and the employment market has maintained a certain degree of resilience. In May, non-agricultural employment increased by 139,000, the unemployment rate was 4.2%, and the wage growth rate was 3.9% year-on-year, indicating that although the labor market has slowed down slightly, it is also considered stable. At the same time, inflation data was lower than expected. In June, the core CPI rose by 2.7% year-on-year, a slight decline from the previous value, and has not yet clearly reflected the impact of the Trump administration's tariffs. The market generally expects that the Federal Reserve will start to cut interest rates in September instead of July.
However, the risk of stagflation is increasing. JPMorgan Chase warned that the US GDP growth forecast for 2025 has been lowered from 2% to 1.3%. The tariff policy may push up inflation and suppress growth, putting the economy into a "stagflation" dilemma. There are obvious differences within the Federal Reserve on the path of interest rate cuts - Chairman Powell emphasized that "there is no rush to relax policies", while some officials, such as Waller and Bowman, advocate early interest rate cuts (in July) to prevent economic downside risks. Behind this policy game is the contradiction between inflation and growth: if the Fed cuts interest rates too early, it may aggravate inflation; if it acts too late, it may accelerate economic recession.
The key variable is the lagged impact of tariffs. Powell pointed out that the transmission of tariffs on prices may become apparent in the coming months, and inflation data from June to August may show a "significant increase". One possible explanation is that companies have previously mitigated the short-term impact by stockpiling goods in advance, but as the inventory is digested, the rising import costs will gradually push up the terminal price. If inflation rebounds, the Fed may be forced to postpone interest rate cuts or even suspend the easing cycle, further strengthening expectations of stagflation.
Looking ahead to the second half of the year, the policy path remains highly uncertain. July non-farm payrolls and CPI data will be key decision-making bases. If the data confirms that inflationary pressure is controllable, the Fed may cut interest rates as planned in September; if inflation rises beyond expectations, the market may face a "hawkish delay" shock, or even a reappearance of the stagflation dilemma of the 1970s. In this game of interest rate cuts and stagflation, every decision made by the Fed will profoundly affect the direction of the global market.
Despite weak U.S. economic data, the market is still focused on expectations of policy easing. However, the expectation of a Federal Reserve rate cut in June 2025, breakthroughs in stablecoin regulation and a rebound in technology stocks are still driving the overall U.S. stock market to show a volatile upward trend: the S&P 500 rose 4.96% for the month and the Nasdaq rose 5.93%, setting new historical highs many times during the period.
The most noteworthy are the crypto stocks represented by the stablecoin giant Circle (CRCL), whose performance is far ahead of the rest: Circle was listed on the New York Stock Exchange on June 5, and its stock price soared by more than 600%. This first stablecoin stock is undoubtedly one of the most dazzling fintech IPOs in 2025; CoinBase (COIN) also rose 43% in the month.
Behind this rise is the first federal stablecoin regulation bill (GENIUS Act) passed by the U.S. Senate on June 17 ((Guiding and Establishing a National Innovation Act for USD Stablecoins)), which established a federal regulatory framework for stablecoins for the first time, clearly requiring issuers to use 1:1 USD or short-term U.S. Treasuries as reserves, and prohibiting algorithmic stablecoins and interest-paying stablecoins. Circle's USDC is the world's second largest stablecoin (market value of $61 billion), and its huge compliance advantages have made it the first choice for institutions. The surge after listing reflects the market's strong expectations for "regulatory dividends."
The above table is a "stress test table" of different assets in a downward cycle. In each downward cycle, the decline of cryptocurrencies is greater than that of U.S. stocks and bonds (the higher the risk, the greater the decline). However, in 2025, the decline of Bitcoin narrowed and the volatility was extremely small, indicating that the maturity of the crypto market has increased after the entry of institutions.
The trend of "issuing shares to buy coins" on the corporate side further strengthens this logic of coin-stock linkage. According to (Monthly Outlook: Three Themes for 2H25), as of April 2025, 228 listed companies around the world hold a total of 820,000 bitcoins, of which Strategy (MSTR) holds nearly 600,000 bitcoins (accounting for 2.5% of the total supply of bitcoins), with an average cost of about US$68,000 and a floating profit of more than 200%.
Tesla and other technology giants have increased their holdings of Bitcoin through convertible bond financing, incorporating digital assets into the structural configuration of their balance sheets, and forming a new capital operation model of "issuing shares to purchase coins". This trend of corporate entry shifting from "strategic deployment" to "institutional acceptance" not only supports the price of Bitcoin (up 10.6% in the first half of 2025), but also enhances the legitimacy and market recognition of crypto assets. Strategy CEO Michael Saylor said: "Bitcoin has become a core asset for companies to fight inflation, and we are promoting it to become a global reserve standard." According to Deutsche Bank data, the settlement volume of stablecoins will reach 28 trillion US dollars in 2024, surpassing the total of Visa and Mastercard, which not only verifies the business potential of institutions such as Circle, but also reveals the ability of blockchain payments to reshape the global clearing system.
Looking ahead to the second half of the year, if the (GENIUS Act) is passed by the House of Representatives and signed by Trump, it will officially usher in a new era of stablecoin regulation. Compliance will accelerate the inflow of institutional funds, and the boundaries between the traditional stock market and the cryptocurrency world will accelerate integration, further strengthening the "coin-stock linkage". Crypto stocks may continue to be strong and become the core driver of the structural market of the U.S. stock market.
In June, Bitcoin prices continued to show resilience in a complex situation: when the Iran-Israel conflict suddenly escalated in mid-June, Bitcoin briefly fell below the $100,000 mark, but then quickly recovered and returned to above $100,000, moving out of an independent trend and gradually decoupling from traditional risk assets. Recent research by Gemini Exchange and on-chain analysis agency Glassnode shows that institutional investors continue to increase their holdings through channels such as ETFs, and structural changes in the market are reshaping its volatility characteristics.
Looking back at the first half of 2025, although the factors affecting its short-term price are still mainly capital supply and geopolitical conflicts, at a more fundamental level, the crypto market may be experiencing the most profound paradigm shift since its inception, because its development trajectory can no longer be defined by simple market sentiment or technical indicators, but has shown new vitality under the joint efforts of technology, capital, supervision, and ecology. The market performance in June clearly revealed that this industry is gradually transforming into a mature digital asset infrastructure.
Among them, the wave of institutionalization reached a new height in June, with the scale of global crypto ETFs exceeding the milestone of US$1.1 trillion, and BlackRock's Bitcoin ETF alone attracted US$4.9 billion in net inflows in a single month. More noteworthy is that the degree of participation of traditional financial institutions is undergoing qualitative changes. For example, Goldman Sachs began to provide Bitcoin mortgage services with CoinBase, and the depth of this participation far exceeded Wall Street's tentative layout during the bull market in 2021. At the same time, the Fed's monetary policy shift expectations have injected new variables into the market. Historical data show that the Fed's interest rate cut cycle is usually accompanied by a significant rise in Bitcoin.
In terms of regulation, as mentioned above, the passage of the United States (GENIUS Act) and the establishment of the Hong Kong stablecoin licensing system indicate that major financial centers have built a preliminary compliance framework for digital assets. This policy certainty is attracting more traditional capital to enter.
In addition, the White House digital asset policy adviser revealed that the United States is working on building a strategic Bitcoin reserve infrastructure. Trump's executive order issued in March this year did not force the Treasury Department to disclose the government's holdings of Bitcoin. We can expect it to proactively disclose relevant information in the second half of the year. The adviser also added that the US government is "highly inclined" to increase its holdings of Bitcoin in a budget-neutral manner. This means that the US government will provide financial support for Bitcoin purchases through internal fund restructuring or cost savings without increasing the fiscal deficit or the burden on taxpayers.
In short, looking back from the middle of 2025, the development trajectory of the crypto market has fundamentally changed from the early purely speculation-driven stage.
Geoffrey Kendrick, head of digital asset research at Standard Chartered Bank, once predicted that the target price of Bitcoin by the end of 2025 would be $200,000. The dominant narrative behind this round of market has shifted from being linked to risky assets to being driven by capital flows, and capital is pouring in in various forms. Bitcoin is becoming a tool for capital to withdraw from US assets, indicating that this rise 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 Fed rate cut, continued growth in corporate encryption adoption, and clarification of regulatory policies, it is expected to usher in a new round of steady development.