Since early April 2025, Bitcoin has surged from around $74,500 on the 4th to $94,000, with a 26% increase over half a month, sparking intense discussions in the market about the "full return of the bull market." However, Ethereum’s performance during the same period has been weak, fluctuating around $1,600 and even facing challenges from competitors like XRP and Solana. Behind this seemingly fragmented market pattern lies a deeper logic of policy, technology, and liquidity games.
1. Three major engines for Bitcoin's strong rebound
1. Milestone breakthrough in national strategic reserves
Former U.S. President Trump officially launched the "Digital Gold Strategy" on April 2, incorporating Bitcoin, XRP, and four other cryptocurrencies into national reserve assets and pressuring the global market by imposing cross-border transaction taxes on countries without reserves. Within 24 hours of the policy announcement, over 10 whale addresses increased their holdings by more than 50,000 BTC, pushing Bitcoin's daily increase to 8.3%. This policy not only reinforces Bitcoin's "digital gold" property but also marks the first systematic recognition of the strategic value of crypto assets by sovereign countries, creating a competitive landscape with traditional gold reserves.
2. Expectations of rate cuts and liquidity reassessment
Although the Federal Reserve maintains interest rates in the range of 4.25%-4.5%, market expectations for rate cuts in May or July are heating up. Historical data shows that the correlation coefficient between global M2 money supply growth and Bitcoin price is 0.94, and concerns about an economic recession triggered by Trump’s tariff policies may force the Federal Reserve to accelerate easing, injecting liquidity into the crypto market. Notably, the production cost of Bitcoin (around $89,000) has exceeded the spot price, which may pressure miners to clear computing power, forming a bottom support for supply and demand rebalancing.
3. Migration of institutional funds for risk aversion
Against the backdrop of gold reaching a new high of $3,357/oz, Bitcoin's "anti-inflation narrative" and safe-haven properties are being repriced. The price-to-book ratio (PB) of companies like MicroStrategy holding BTC has soared from 3.2 times in 2024 to 8.5 times, far exceeding the 1.8 times of gold mining companies, reflecting the premium valuation of institutions for "digital hard currency." On-chain data shows that whale addresses holding over 1,000 BTC have remained silent during the pullback, while mid-sized holders (10-100 BTC) have increased their low-position holdings, indicating the sedimentation of long-term chips.
2. Ethereum's predicaments: Technological bottlenecks and ecological squeeze
1. User loss under the performance ceiling
Although Ethereum has completed the Pectra upgrade (including 20 EIP proposals), issues of network congestion and high Gas fees remain unresolved. During peak periods, transaction fees can still reach $200, causing DeFi users to migrate to high-performance public chains like Solana and Sui. Data shows that Ethereum's market share has dropped to a near three-year low, while Solana's TVL (Total Value Locked) has increased by 120% in a single month, with its Firedancer upgrade achieving TPS exceeding 100,000 and transaction fees dropping to $0.0001, forming a stark contrast.
2. Regulatory pressure and shrinking staking returns
The U.S. (stablecoin legislation draft) requires issuers to hold a 1:1 cash and treasury reserve, directly impacting the liquidity of stablecoins like USDT within the Ethereum ecosystem. Meanwhile, the annualized staking yield for ETH has dropped from a peak of 15% to 3.8%, far lower than Solana's 6.2% and Cardano's 5.5%, weakening institutional allocation willingness.
3. Encircling offensive from competitors
XRP reduces price slippage by 60% through the XRPL-AMM mechanism and partners with Coinbase to launch futures contracts, attracting financial institutions in the cross-border payment sector; while RCO Finance is encroaching on Ethereum's DeFi market share through AI-driven robo-advisors and compliant ETF funds. More critically, Japan has reduced the cryptocurrency tax rate from 55% to 20%, paving the way for ETF listings for "compliance-friendly" public chains like Solana and Cardano.
3. The battle for the throne of altcoins: XRP's comeback and ecological reconstruction
1. Institutional path of XRP
Ripple's On-Demand Liquidity (ODL) system has connected with over 300 financial institutions, achieving real-time settlement for cross-border payments. Coinbase emphasized in its report submitted to the CFTC that XRP's efficiency in international settlement improves by 80% compared to the SWIFT system, with costs reduced by 70%, making it the first altcoin accepted by the mainstream financial system. On-chain monitoring shows that since April, the number of XRP whale addresses (holding over 1 million) has increased by 17%, with their share rising to 41%, far exceeding Ethereum's 29%.
2. Technological revolution of new public chains
- Solana: Compresses confirmation time to 400 milliseconds through parallel execution architecture, supporting high-frequency trading scenarios;
- Sui: An object storage model based on Move language, reducing NFT minting costs to $0.001;
- Celestia: A modular data availability layer that reduces Rollup expansion costs by 90%, attracting Ethereum ecosystem projects to migrate.
These technological innovations not only solve Ethereum's legacy issues but also open up new tracks like AI agents and decentralized physical infrastructure networks (DePIN), creating a dual disruption of "performance + scenarios."
4. Sustainability of the bull market: Risks and opportunities coexist
1. The double-edged sword of macro policy
Although Trump's crypto strategy has boosted the market, his plan to impose a 25% tariff on automobiles from China may trigger global trade contraction and a shortage of dollar liquidity. Historical data shows that when the S&P 500 fear index VIX exceeds 25, the correlation coefficient between Bitcoin and U.S. stocks will rise from 0.38 to 0.62, increasing short-term volatility.
2. The key to the success or failure of technological upgrades
Ethereum's Fusaka upgrade will be completed by the end of April. If breakthroughs can be made in sharding technology and account abstraction, it may regain developers' favor; conversely, if delayed again, its market share may drop below the critical point of 15%.
3. Health of the funding structure
Currently, the total market value of altcoins is 12% of Bitcoin's market value, close to the peak level of the 2021 bull market. If Bitcoin falls below the support level of $83,000, meme coins and other high-beta assets may face significant losses. Investors need to beware of the liquidity trap of "institutions hoarding BTC while retail investors are trapped in altcoins."
5. Investment strategy: Adjusting the sails in the storm
1. Core allocation: 60% BTC + 20% ETH + 20% USDC, using CME options to hedge volatility risk;
2. Track layout: AI + blockchain (TAO, FET), modular public chains (TIA, SEI), compliant stablecoins (USDC, EURI);
3. Event-driven: Focus on the Federal Reserve's interest rate meeting at the end of April and the implementation of the Ethereum upgrade, using IV peaks to sell straddle options.
Conclusion: Survival rules during the period of order reconstruction
The crypto market in 2025 is experiencing a triple transformation of "sovereign countries entering the market—technological paradigm revolution—regulatory framework formation." Bitcoin's surge may not necessarily indicate a full return of the bull market but rather a structural opportunity amidst the alternation of new and old orders. If Ethereum cannot accelerate its evolution, it may become a symbol of the "classical blockchain"; whether challengers like XRP and Solana can reach the top depends on their ability to transform technological advantages into ecological moats. In this market where "only two types of people can survive" (institutional investors and ecological builders), only by embracing change and respecting risks can one navigate through the fog of the cycle.
