I. Definition and core ecosystem of the crypto space
The crypto space is an ecosystem formed around cryptocurrencies, encompassing the issuance, trading, technological development, and community interaction of digital currencies. Its core components include:
Cryptocurrency: Such as Bitcoin (BTC), Ethereum (ETH), and stablecoins (USDT), enabling decentralized trading based on blockchain technology.
Blockchain technology: Distributed ledger technology that ensures transaction transparency and immutability, supporting the operation of cryptocurrencies.
Exchanges: Such as Binance and Bitstamp, providing services for buying and selling cryptocurrencies.
Wallets: Software or hardware devices for storing and managing cryptocurrencies, categorized into hot wallets (online) and cold wallets (offline).
Community and developers: The core group driving technological innovation and project implementation.
II. Market status and scale
1. Market capitalization and price volatility
Total market capitalization: As of June 2025, the total market capitalization of the global cryptocurrency market is approximately $2.5 trillion, with Bitcoin accounting for 50% and Ethereum for 20%.
Price performance:
Bitcoin: Expected to surpass $90,000 in early 2024 and reach an all-time high of $118,000 by mid-2025.
Ethereum: Expected price of around $4,300 in August 2025, with a market cap exceeding $500 billion.
Trading volume: Major platforms like Bitstamp have a 24-hour trading volume of several tens of millions of dollars in ETH/BTC trading pairs, indicating high market activity.
2. Institutional participation
Bitcoin ETF: Institutions like BlackRock and Fidelity hold billions in Bitcoin through ETFs, promoting market normalization.
Corporate allocation: Companies like Strategy and Block have included Bitcoin in their balance sheets as a strategic reserve asset.
3. The rise of stablecoins
Market size: The global market cap of stablecoins exceeds $250 billion, with annual trading volumes exceeding $35 trillion, surpassing the combined totals of Visa and Mastercard.
Mainstream stablecoins: USDT (Tether), USDC (USD stablecoin), etc., with 100% cash or short-term US Treasury reserves, and interest payments are prohibited to avoid competition with banks.
III. Regulatory dynamics and policies
1. Global regulatory framework
United States:
Through the (GENIUS Act), a regulatory framework for stablecoins has been established, allowing banks to issue payment-based stablecoins while prohibiting algorithmic stablecoins.
President Trump signed a bill clarifying the regulatory path and supporting the development of cryptocurrencies.
European Union:
MiCA regulation takes effect, establishing unified regulatory standards requiring stablecoin issuers to register in the EU and maintain high liquidity reserves.
Hong Kong:
(Stablecoin Ordinance) will take effect in August 2025, allowing the issuance of stablecoins pegged to multiple currencies (including offshore RMB), promoting the internationalization of the RMB.
2. Compliance trends
Reserve requirements: Stablecoins must have 100% cash or short-term US Treasury reserves, and interest payments are prohibited.
Trading platforms: Stablecoins must be traded on licensed virtual asset trading platforms to protect investor rights.
IV. Investment risks
1. Price volatility
Extreme volatility: Bitcoin has experienced multiple surges and drops in history (e.g., halving after reaching $60,000 in 2021), suitable for investors with high risk tolerance.
Liquidity risk: Some altcoins have low trading volumes and can be easily manipulated by large holders.
2. Regulatory uncertainty
Policy differences: China prohibits cryptocurrency trading, while the U.S., Hong Kong, and others are gradually clarifying compliance paths, necessitating attention to cross-regional legal risks.
Enforcement risks: For instance, the IRS has previously conducted strict reviews of DeFi, but policies have since relaxed, although regulatory uncertainty remains.
3. Technology and security risks
Hacker attacks: Frequent theft incidents from exchanges (e.g., Bybit's offline wallet theft), with cold wallets not being absolutely secure.
Lost private keys: Users may lose access to assets due to poor management, necessitating enhanced security awareness.
4. Speculation and fraud
Altcoin traps: High-risk projects like 100x coins and contract trading attract retail investors, with survivor bias leading to losses for most.
KOL misguidance: Some opinion leaders induce speculation through showcasing their trades, necessitating rational judgment.
V. Investment opportunities
1. Mainstream cryptocurrencies
Bitcoin: Known as 'digital gold', it has significant long-term growth potential with increased institutional allocation, making it suitable as a store of value.
Ethereum: A smart contract platform, the core of DeFi and NFT ecosystems, benefiting from the expansion of blockchain technology applications.
2. Stablecoins and cross-border payments
Stablecoin applications: The global market cap of stablecoins exceeds $250 billion, becoming a key tool for the revolution in cross-border payments (e.g., Societe Generale plans to issue a USD stablecoin).
Cross-border payments: Stablecoins support 24/7 instant conversion, reducing fees and time costs.
3. Blockchain technology innovation
RWA (Real World Asset Tokenization):
Market size: Expected to reach $10 trillion by 2030, with assets like real estate and artworks enhanced by liquidity through blockchain.
Case: RealT platform tokenizes residential properties in the U.S., with investments starting at $50.
DeFi (Decentralized Finance):
Tightening regulations but user growth: An EY report predicts that the number of investors participating in DeFi will double in the next two years.
Services: Provide lending, trading, and other services without the need for traditional intermediaries.
Integration of artificial intelligence and crypto:
Bittensor platform: Combines blockchain and AI to create a decentralized AI tools marketplace, where developers collaborate and compete through subnets.
Ambient project: Supported by top venture capital, aiming to become a decentralized AI giant.
4. Secondary market investments
Bitcoin ETF: Lowers the entry barrier, allowing companies to include Bitcoin in their balance sheets as a strategic reserve.
Futures and options: Provide risk management tools, suitable for professional investors.
VI. Conclusion and recommendations
1. Balancing risks and opportunities
High risk, high reward: The crypto space is suitable for investors who can bear risks and have a deep understanding of technology, while being wary of price volatility, regulatory changes, and technical vulnerabilities.
Long-term opportunities: Mainstream cryptocurrencies, stablecoins, and blockchain technology applications (such as RWA, DeFi, AI integration) harbor long-term growth potential.
2. Investment strategies
Advice for beginners:
Starting with mainstream assets: Prioritize allocations in Bitcoin and Ethereum, avoiding blind speculation in altcoins.
Cold wallet storage: Use hardware wallets (like Ledger) to ensure asset security.
Diversified investment: Allocate funds across different asset classes (such as stablecoins, mainstream coins, RWA tokens).
Advanced strategies:
Pay attention to regulatory dynamics: Especially the policy changes in the U.S., EU, and Hong Kong.
Participate in DeFi and RWA: Choose compliant platforms and assess project teams and technological capabilities.
Utilize secondary market tools: Participate indirectly in the market through Bitcoin ETFs, futures, and other products.
3. Risk warnings
Avoid blind following: Be wary of high-risk projects like 100x coins and contract trading, as survivor bias leads to losses for most.
Legal and compliance: Some countries prohibit cryptocurrency trading, requiring adherence to local laws to avoid over-the-counter trading risks.
The crypto space, as a frontier of financial innovation, is filled with transformative potential but also significant risks. Rational investment, continuous learning, and strict risk control are key to long-term survival.
BEH BTC PEPE
