Outlook for the Crypto Market in the Second Half of 2025: Opportunities Amid Range-Bound Monetary Policy and Global Turmoil

1. Summary

In the first half of 2025, the global macro environment remains highly uncertain. The Federal Reserve has repeatedly paused interest rate cuts, reflecting that the monetary policy has entered a wait-and-see range-bound stage. Increased tariffs and escalating geopolitical conflicts further affect the global risk appetite structure. This report starts from five major macro dimensions, combining on-chain data and financial models, to systematically assess the opportunities and risks in the crypto market for the second half of the year, and proposes three core strategic recommendations, covering Bitcoin, stablecoin ecosystems, and DeFi derivatives.

2. Review of the Global Macroeconomic Environment ( First Half of 2025 )

In the first half of 2025, the global macroeconomic landscape continues to exhibit multiple characteristics of uncertainty. Weak growth, sticky inflation, unclear monetary policy outlook, and escalating geopolitical tensions have led to a significant contraction in global risk appetite. The dominant logic of macroeconomics and monetary policy has gradually evolved from "inflation control" to "signal game" and "expectation management."

In terms of the Federal Reserve's policy, at the beginning of 2025, the market expected three interest rate cuts within the year. However, inflation rose again, leading the Federal Reserve to continuously pause rate cuts and lower the expected number of cuts for the year. After the June meeting, the Federal Reserve entered a "data-dependent + wait-and-see" phase, significantly increasing the uncertainty of the policy path.

At the same time, the split between fiscal policy and monetary policy has intensified. The government is advancing a "strong dollar + strong border" strategy, optimizing the debt structure through various financial means, including promoting the compliance of US dollar stablecoins. These measures are clearly decoupled from the Federal Reserve's direction of high interest rates to suppress inflation, making market expectation management more complicated.

Tariff policy has become one of the dominant variables driving global market turbulence in the first half of the year. Since April, the United States has imposed a new round of high tariffs on various products, triggering a conflict between the stability of the dollar's credit and the interest rate anchor.

Geopolitical tensions continue to escalate, impacting market sentiment. Ukraine has destroyed Russian strategic bombers, and Middle Eastern oil infrastructure has been attacked, causing a surge in crude oil prices. Unlike in 2022, this round of geopolitical events has not driven up cryptocurrencies; instead, it has prompted safe-haven funds to flow into gold and short-term U.S. debt.

From the perspective of global capital flows, there is a clear trend of "de-emerging marketization" in the first half of 2025. Net capital outflow from emerging market bonds has reached a new high, while the North American market has seen relatively net capital inflows. The crypto market shows signs of "asset stratification" and "structural rotation."

Overall, the first half of 2025 presents a highly complex and uncertain environment, laying a complicated foundation for the operation of the crypto market in the second half.

III. The Reconstruction of the Dollar System and the Systematic Evolution of the Role of Cryptocurrencies

Since 2020, the dollar system has been undergoing a deep structural reconstruction, stemming from the instability of the global monetary order and a crisis of institutional trust. In the first half of 2025, the macro environment is expected to experience severe fluctuations, with the dollar's hegemony facing internal policy consistency imbalances and external challenges, profoundly affecting the market position, regulatory logic, and asset role of cryptocurrencies.

Internally, the U.S. dollar credit system faces the issue of "monetary policy anchor logic shaking." The government is shaping a "fiscal priority" strategy, using the global dominance of the dollar to export domestic inflation. The Treasury is strengthening the shaping of the internationalization path of the dollar and promoting the construction of a "digital dollar export system."

This strategy has raised concerns in the market about the "disappearance of the boundary between fiat currency and crypto assets." The dominance of the US dollar stablecoin in crypto trading continues to rise, while the relative weight of Bitcoin and Ethereum is declining. The US dollar credit system has partially "devoured" the crypto market, and the US dollar stablecoin has become a new source of systemic risk.

On the external front, the dollar system faces ongoing challenges from multilateral currency mechanisms. Multiple countries are advancing local currency settlements, bilateral clearing agreements, and the construction of commodity-linked digital asset networks, which weaken the dollar's monopoly position in global settlements. Crypto assets are caught between two systems, and the issue of "institutional affiliation" is becoming increasingly ambiguous.

The role of Bitcoin is shifting from "decentralized payment tool" to "sovereignty-resistant anti-inflation asset" and "liquidity channel under institutional gaps." In some countries with unstable currencies, Bitcoin is widely used to hedge against local currency devaluation and capital controls. However, it has not been incorporated into the national credit logic system, and its risk resistance remains insufficient in the face of policy pressures.

The role of Ethereum is also changing, gradually evolving from a "smart contract platform" to an "institutional access platform". More and more activities are incorporating Ethereum into compliance frameworks, and traditional financial institutions are also deploying infrastructure on-chain. The future direction of Ethereum will depend on the "degree of institutional compatibility".

The US dollar system is re-dominating the digital asset market through technological spillover, institutional integration, and regulatory penetration, with the goal of making crypto assets an embedded component of the "digital dollar world." Future investment logic will revolve around "whoever can embed the reconstructed structure of the dollar will possess institutional dividends."

4. On-chain Data Perspective: New Changes in Funding Structure and User Behavior

In the first half of 2025, on-chain data presents a complex scenario of "structural sedimentation and marginal recovery intertwined." The proportion of long-term holders of Bitcoin has reached a new high, the supply pattern of stablecoins has significantly improved, and the activity level of the DeFi ecosystem has recovered but with risk aversion. This reflects the oscillation of investor sentiment between risk aversion and testing, as well as the market's highly sensitive reconstruction of capital structure in response to changes in policy rhythm.

On the Bitcoin blockchain, over 70% have been in an unmovable state for more than 12 months, setting a new historical high. The increase in holdings by long-term holders indicates that market confidence remains unshaken, leading to a contraction in circulating supply. The distribution curve of holding time has "shifted to the right", with an increasing number of on-chain coins locked for 2 years or more. This reflects the structural capital dominating the on-chain BTC distribution logic. Short-term activity has significantly declined, confirming the market's shift from "high-frequency speculation" to "long-term allocation."

The stablecoin market has emerged from the bottom repair cycle. The market value of USDC has returned to growth, and new stablecoins have also recorded significant growth rates. The expansion of stablecoins is more rooted in real economic activity scenarios. On-chain activity has increased, reflecting stablecoins returning to their essence as payment tools from counterparty assets. The proportion of cross-chain circulation has risen, indicating that funds are seeking more efficient payment and deployment paths.

The DeFi ecosystem shows a "active repair but risk-neutral" situation. Derivatives and perpetual contract protocols are performing actively, but the capital utilization rate is relatively low. While the TVL of most platforms is increasing, the average leverage ratio and the amount of open contracts are not growing in proportion. This indicates that market participants are frequently testing, but overall there is no systemic leverage accumulation, remaining in a strategic wait-and-see state.

In summary, the on-chain data for the first half of 2025 reveals that the crypto market is in a complex intersection of "chip reconstruction - expectation compression - marginal recovery of heat." The capital structure is shifting from being dominated by speculative funds to a composite structure based on structural accumulation with short-term trading on the surface. Although this structure may struggle to form a sustained upward trend in the short term, it will quickly unleash intrinsic bullish momentum once the macro policy path becomes clear.

5. Analysis and Strategy Recommendations for the Crypto Market Trends in the Second Half of the Year

Looking ahead to the second half of 2025, the crypto market will enter a critical turning point of macro and structural resonance. The core variables are the dynamic game among multi-dimensional macro paths, institutional certainty, and on-chain structural reconstruction. Market evolution is approaching a "window reassessment period," where policy expectation adjustments, interest rate environment repricing, and risk pricing model reshaping will collectively form the main logical thread of market volatility and trends in the next 6-9 months.

From a macro policy perspective, the Federal Reserve's interest rate path and marginal changes in U.S. dollar liquidity remain the determining forces. As U.S. economic indicators show potential deflationary signs, the probability of the Federal Reserve entering a "symbolic rate cut" or even a "preventive rate cut" channel increases. Once the Federal Reserve makes its first rate cut, even a small attempt could trigger a magnifying effect on crypto market sentiment.

However, the uncertainty brought about by the global political cycle will continue to overshadow asset pricing logic. The U.S. elections, the redistribution of power in the European Parliament, the financial decoupling between Russia and the West, and the China-U.S. trade game may all disturb investors' risk preferences and capital flows. In particular, if Trump wins the election, his extreme policy tendencies may provide short-term benefits to Crypto, but the underlying geopolitical shocks and financial decoupling risks may also trigger a "risk repricing" of the global capital system.

From the perspective of market structure, the crypto market is entering the mid-to-late stage of "ETF fund dominance, stabilization of on-chain structure, and slowdown of theme rotation." Bitcoin ETFs have become the dominant incremental force, with their net inflow rhythm almost directly determining the BTC price trend. The on-chain structure is gradually stabilizing, indicating that the crypto market is forming a more resilient internal operating system. However, the theme rotation has significantly slowed down, and investors' patience for speculative themes has weakened. In the second half of the year, structural opportunities will focus on the "narrative verification supported by reality" path.

Tactical operation suggestions:

1. Asset allocation focuses on "structural and rhythmic synergy." Bitcoin remains the most certain mainline asset, suitable for a dual-track layout of ETFs and cold wallets. Ethereum possesses game-theoretic elasticity, but one must be wary of the weakening innovation momentum of on-chain applications. It is recommended to pay attention to the combination of "liquidity + new narratives" in the ecological sub-segments. High-speed public chains have room for valuation recovery, but participation positions and rhythms should be controlled.

2. Strategically capture the secondary rotation potential of Meme assets. There are still short-term sentiment trading opportunities based on the resonance of traffic and liquidity on social platforms. Light trading operations can be combined with on-chain capital flow monitoring data, but ensure that the Meme allocation does not exceed 10% of the total market value of the portfolio.

3. Build a "defensive bull market framework". Focus on three key indicators as the market's "leading signals": changes in the Federal Reserve's policy path, amplified ETF fund flows, and variations in stablecoin on-chain activity. The resonance of these three constitutes the confirmation signal for the market's leap into the "trend repricing phase".

6. Conclusion

In 2025, the crypto market will enter a new cycle dominated by institutional games and guided by liquidity reconstruction. It is recommended to use "finding structural opportunities while defending" as the core strategic line, capturing the new Alpha paths brought by the reconstruction of monetary tools and the recovery of capital arbitrage chains. Patience will be the most powerful strategy, and understanding the system is the true skill to navigate through cycles.