In the second half, pay attention to the Federal Reserve's policy shift, advancement of U.S. crypto legislation, M&A wave between TradFi and crypto, stablecoin payment penetration, RWA, etc.
Written by: Binance Research Institute
Translated by: Chopper, Foresight News
In the first half of 2025, the crypto market presents a 'first suppression then rise' oscillating pattern: total market cap drops 18.61% in the first quarter, rebounds 25.32% in the second quarter, ultimately showing a slight year-over-year increase of 1.99%.
Year-to-date, total market capitalization of the crypto market has increased by 1.99%
This dynamic stems from multiple factors:
In the second half of 2024, expectations of interest rate cuts by the Federal Reserve and regulatory easing after the U.S. elections drive the market up to $3 trillion;
In early 2025, sticky inflation, weak economic data, and the widespread tariffs imposed by the Trump administration in April suppress market sentiment;
Recent tariff pauses and increased regulatory clarity for stablecoins and DeFi drive market recovery.
Timeline of important events in the first half of 2025
The core narrative of the crypto market in the first half of the year focuses on Bitcoin investment tools, stablecoins, AI agents, and tokenized real-world assets (RWA). Looking ahead, global monetary policy, trade tariff dynamics, institutional entry, integration of cryptocurrencies and AI, and a new round of crypto IPOs following Circle will become key highlights.
I. Macroeconomic Background and Market Performance
Global Economy 'Great Divergence'
Economic Trends Diverging: The U.S. economy gradually slows, with unemployment stabilizing at 4.1% but the job market cooling; China's GDP grows by 5.4% year-over-year in the first quarter, benefiting from stimulus policies; the Eurozone and Japan's economies steadily recover.
G4 countries' quarterly GDP performance and market forecasts
Liquidity Easing: The total money supply of the four major economies (U.S., China, Europe, and Japan) increased by $5.5 trillion, the largest half-year increase in four years, boosting risk asset sentiment.
Geopolitical Shock: The brief U.S.-China trade war causes tariffs to surge to 145%, exacerbating market volatility.
Bitcoin's 'High Beta Attribute'
Bitcoin's year-to-date return reaches 13%, outperforming most traditional stock indices, with a market cap consistently above $2 trillion. Its price cycle is seen as a leading indicator of the global manufacturing cycle (leading by 8-12 months), suggesting potential opportunities in the second half of 2025.
Year-to-date returns of some major global assets
II. Performance of Core Assets: Bitcoin and Public Chain Ecosystems
Maturity of the Bitcoin Ecosystem
Institutional entry accelerates: cumulative net inflows into spot ETFs exceed $13.7 billion, with BlackRock's IBIT dominating the market; over 140 listed companies hold 848,000 BTC, an increase of over 160% from last year.
Year-to-date, spot Bitcoin ETFs have attracted over $13.7 billion in net inflows
Ecosystem Innovation and Divergence: Layer 2 solutions (such as Stacks, BitVM) promote scaling, with total locked value (TVL) reaching $6.5 billion, up 550% year-over-year; however, speculation in Bitcoin-native assets like Ordinals and Runes cools, with daily trading volume dropping to an 18-month low.
Market Dominance: Bitcoin's dominance peaks at 65.1%, a four-year high, highlighting its status as a core asset.
Major Public Chain Dynamics
Ethereum: ETH price drops by 26%, but ecosystem resilience stands out. Pectra upgrade enhances staking efficiency (maximum balance per validator node rises from 32 ETH to 2048 ETH), staking reaches 35.4 million ETH (29.3% of circulation); Layer 2 (Base, Arbitrum, etc.) handles over 90% of transactions, becoming the main scaling carrier.
The Ethereum to Bitcoin exchange rate falls to 0.023, reaching a multi-year low, data as of June 30, 2025
Solana: Continues to maintain high throughput (daily average transactions at 99 million), stablecoin market cap reaches $10.9 billion, surpassing BNB Chain; institutional interest rises, with multiple asset management companies applying for spot SOL ETFs, expected to be approved by mid-year.
Market capitalization of stablecoins on major public chains, data as of June 30, 2025
BNB Chain: DEX trading volume reaches an all-time high, with PancakeSwap contributing over 90%; block time is reduced to 0.8 seconds through upgrades like Pascal and Lorentz, expanding the ecosystem into Memecoin, RWA, and AI fields, with daily active addresses reaching 4.4 million.
III. DeFi and Stablecoins: From Speculation to Practicality
DeFi enters a mature stage
Core Data: TVL stabilizes at $151.5 billion, monthly active users reach 340 million (up 240% year-over-year), DEX spot trading volume share rises to 29%, reaching an all-time high.
Changes in major DeFi indices over six months and one year
Key Trends:
RWA Explosion: The value of on-chain real-world assets reaches $24.4 billion, with private credit accounting for 58%, becoming an important bridge between TradFi and DeFi.
Prediction market breakthroughs: Polymarket collaborates with social platform X, with June trading volume exceeding $1.1 billion, monthly active users at 400,000, becoming an information analysis tool.
Liquidity Layering: Ethereum dominates institutional-grade assets (heavy staking, RWA), Solana focuses on retail trading, and BNB Chain attracts traffic with Memecoins and zero gas fee activities.
Acceleration of Stablecoin Mainstreaming
Market Landscape: Total market capitalization surpasses $250 billion; USDT ($153-156 billion) and USDC ($61.5 billion) form a duopoly, accounting for a total of 92.1%.
This year, the total supply of stablecoins increased by over 22%, reaching a new high.
Key Developments:
Institutional Adoption: Circle goes public on the NYSE with over $600 million raised; JPMorgan, Société Générale, and others launch bank-backed stablecoins; Walmart and Amazon explore their own stablecoins to reduce payment costs.
Regulatory Clarity: The U.S. (GENIUS Act) passes, and the EU fully implements MiCA, providing a compliance framework for stablecoins and promoting them as infrastructure for cross-border payments and settlements.
IV. Institutional Entry
TradFi Integration: 60% of Fortune 500 companies are laying out blockchain; JPMorgan launches deposit token JPMD based on Base; Apollo Global Management tokenizes $785 billion credit fund to Solana.
Asset Tokenization: The on-chain acceleration of traditional assets such as stocks and bonds, with Backed Finance's xStocks and Dinari's dShares supporting 24/7 trading; Robinhood launches synthetic stock derivatives in the EU.
Comparative analysis of tokenized stock issuance between xStocks, dShares, and Robinhood
V. Regulatory Landscape
Major cryptocurrency regulatory policies in the first half of 2025
U.S.: Shift from 'Enforcement Regulation' to 'Legislative Guidance,' (CLARITY Act) (GENIUS Act) clarifies digital asset classification and stablecoin rules, facilitating institutional compliance.
EU: Full implementation of MiCA, with USDT delisted from some exchanges for non-compliance, while compliant stablecoins such as USDC gain market share.
Asia: Hong Kong attracts innovation through open licensing and tax incentives; Singapore cracks down on regulatory arbitrage, leading to business migration.
Outlook for the second half of the year
The Federal Reserve's policy shift, advancement of U.S. crypto legislation, M&A wave between TradFi and crypto, penetration of stablecoin payments, and the RWA explosion will dominate the direction of the crypto market in the second half.
