Macroscopic Perspective and Crypto Market Analysis - May 2025

Macroeconomic Situation

In May 2025, the US economy is at a critical turning point. Inflation continues to decline, the labor market shows resilience, monetary policy enters a wait-and-see period, trade policy brings new uncertainties, and fiscal measures influence market expectations through operations similar to quantitative easing. Against this backdrop, the crypto market demonstrates strong pressure resistance, and the global risk asset structure may undergo a new round of reevaluation.

inflation trend

In April, the CPI year-on-year rate dropped to 2.3%, the lowest since February 2021, indicating that price pressures are continuing to ease. The U.S. Treasury Department launched a $40 billion Treasury bond repurchase operation, seen as a measure aimed at releasing liquidity by repurchasing issued Treasury bonds and refinancing at low interest rates. This operation has become an important force supporting the prices of risk assets.

labor market

In April 2025, 177,000 new non-farm jobs were added, far exceeding market expectations, reflecting the resilience of the job market. This data provides a basis for maintaining a wait-and-see approach to policy. The continued strength in employment reduces concerns about a recession on one hand, while on the other hand, it also diminishes the likelihood of multiple unexpected rate cuts within the year.

monetary policy dynamics

The Federal Reserve stated that it will reassess the current monetary policy framework and may abandon the "average inflation targeting" mechanism. In the future, it may extend the period of high interest rates and even increase its holdings of medium to long-term government bonds through balance sheet expansion to control the rise in long-term interest rates. The policy tone will be more flexible, with no urgent need for preemptive rate cuts in the short term, and it emphasized that the direction of June's policy will be determined based on economic data.

Trade Policy and Global Economic Outlook

At the beginning of May, the plan to impose a 50% tariff on EU goods was postponed until July 9, but the threat of high tariffs has already impacted market sentiment. China has implemented a combination policy of "reducing reserve requirements + interest rate cuts," releasing 1 trillion yuan in liquidity and lowering the policy interest rate to 1.4%. This move is seen as the start of a new round of easing cycle, with market expectations for an improvement in China-U.S. relations heating up and risk appetite rising accordingly.

Crypto Market Overview

trading volume analysis

As of May 27, the market's average daily trading volume was $117.4 billion, an increase of 15.8% compared to the previous period, indicating a continued rebound in capital activity. During this period, there were multiple instances of daily trading volume exceeding a 50% increase, especially during the two phases from May 6 to 12 and from May 21 to 22, where trading volume surged significantly, with daily trading volume once breaking through $180 billion.

market cap change

As of May 27, the total market capitalization of cryptocurrencies has rebounded to $3.56 trillion, an increase of 17.0% from last month. Among them, BTC market share is 62.6%, and ETH market share is 9.6%, with the latter growing by 29.7% compared to the previous period, indicating a continued preference for allocating funds to ETH in this round.

New Trending Tokens

Among the popular tokens launched in May, venture-backed projects continue to dominate, including Layer 2 projects like SOPH and B2. In addition, stablecoin projects and their related projects such as B, Lista, and Staketone have also gained widespread attention in the market.

On-chain Data Analysis

BTC, ETH ETF capital flow

In May, the net inflow for BTC ETFs was approximately $5.77 billion, and the net inflow for ETH ETFs was about $317 million. The price of Bitcoin rose from $94,212 at the beginning of the month to $108,969, an increase of about 13.5%. The price of Ethereum increased from $1,794 to $2,635, a rise of 31.9%.

stablecoin market changes

In May, the total circulation of stablecoins in the crypto market increased by approximately $7.28 billion, primarily driven by USDT, USDE, and DAI.

Mainstream Currency Price Analysis

BTC price trend

Bitcoin is struggling to maintain above $109,588, with buying interest coming in on each minor pullback. If buyers can sustain this trend, it may pave the way for further upward movement. Institutional investors continue to pour funds into Bitcoin ETF products.

ETH price trend

Ethereum rebounded from the 20-day EMA ($2,425) on May 25, showing strong demand at lower price levels. Bulls will attempt to break through the resistance at $2,738 again. If successful, the ETH/USDT trading pair could soar to $3,000.

SOL price trend

Solana received support at the 20-day EMA ($169) on May 25, indicating that market sentiment remains positive. Bulls will attempt to break through the resistance level at $188 once again. If successful, the SOL/USDT trading pair could surge to $210 and may reach $220.

Hot Events This Month

USD1 Eco Development

As of May 28, the market capitalization of the USD1 stablecoin has surpassed $2.1 billion, rising to become the seventh largest stablecoin. Its core advantage lies in being issued under the leadership of the Trump family, making it the first stablecoin project backed by a president. Recently, the prices of several tokens related to USD1's partners have surged significantly, driving high market attention towards the "WLFI+USD1" concept.

The rise of the Believe platform

The core token of the Believe platform, Launchcoin, rose from $0.014 at the beginning of the month to a peak of $0.36, with a market cap approaching $310 million at one point. The platform focuses on the concept of "social assetization," allowing users to trigger token issuance on social platforms. However, the platform's popularity heavily relies on the market performance of Launchcoin, which poses sustainability risks.

Future Outlook

Stablecoin Bill Progress

The "GENIUS Act" has entered the revision process through a debate motion. The bill stipulates qualifications for stablecoin issuance, reserve requirements, compliance obligations, and user protection, among other contents. It is expected that the bill may complete the legislative process in the fourth quarter of 2024.

Ethereum ETF pledge approval

U.S. regulators have postponed their decision on Ethereum ETF staking, with a final deadline set for the end of October. In contrast, Hong Kong has approved Ethereum ETF staking services. The market expects that U.S. regulators may soon reach a regulatory framework regarding the relevant mechanism, facilitating the eventual approval of the Ethereum spot ETF.