WealthBee Macro Monthly Report: The first half of 2025 comes to a close, which main lines will drive the "new engine of crypto" in the second half?

Against the dual backdrop of delayed interest rate cuts and geopolitical turmoil, almost all assets are trembling in the first half of 2025. However, Bitcoin has led the entire crypto world in a remarkable comeback, demonstrating strong resilience and growth potential. As the second half of the year approaches, what key momentum is brewing in the market?

At the beginning of this year, the outside world widely expected the U.S. economy to take a sharp dive, but so far, it has shown a steady decline in a "soft landing" manner, with the job market maintaining a certain level of resilience. In May, non-farm payrolls increased by 139,000, the unemployment rate was 4.2%, and wage growth year-on-year was 3.9%, indicating that while the labor market has slightly slowed, it remains robust. Meanwhile, inflation data has come in below expectations, with June's core CPI rising by 2.7% year-on-year, slightly down from the previous value, and not yet significantly reflecting the impact of tariffs imposed by the Trump administration. The market generally expects the Federal Reserve to initiate interest rate cuts in September rather than July.

However, the risk of stagflation is increasing. JPMorgan has warned that the U.S. GDP growth forecast for 2025 has been downgraded from 2% to 1.3%. Tariff policies may push up inflation and suppress growth, trapping the economy in a "stagflation" dilemma. There are significant internal divisions within the Federal Reserve regarding the path of interest rate cuts—Chairman Powell emphasizes that there is "no rush to ease policy," while some officials, such as Waller and Bowman, advocate for early rate cuts (as soon as July) to guard against economic downturn risks. Behind this policy game is the contradiction between inflation and growth: if the Federal Reserve cuts rates too early, it may exacerbate inflation; if it acts too late, it may accelerate economic recession.

The key variable lies in the lagging effects of tariffs. Powell pointed out that the transmission of tariffs to prices may become apparent in the coming months, with inflation data for June to August possibly showing "significant increases." One possible explanation is that companies previously stocked up to mitigate short-term shocks, but as inventories are depleted, rising import costs will gradually push up end prices. If inflation rebounds, the Federal Reserve may be forced to delay rate cuts or even pause the easing cycle, further reinforcing stagflation expectations.

Looking ahead to the second half of the year, the policy path remains highly uncertain. July's non-farm payroll and CPI data will become key decision-making references. If the data confirms that inflationary pressures are manageable, the Federal Reserve may proceed with rate cuts in September as planned; if inflation rises beyond expectations, the market may face a "hawkish delay" shock, potentially even revisiting the stagflation dilemma of the 1970s. In this game of interest rate cuts and stagflation, every decision made by the Federal Reserve will profoundly impact the direction of global markets.

Despite weak U.S. economic data, the market remains focused on expectations of policy easing. However, the Federal Reserve's interest rate cut expectations in June 2025, breakthroughs in stablecoin regulation, and rebounds in tech stocks have driven the U.S. stock market to show an overall upward trend: the S&P 500 rose 4.96% for the month, and the Nasdaq increased by 5.93%, repeatedly hitting new historical highs during this period.

Notably, the crypto stock represented by stablecoin giant Circle (CRCL) has outperformed significantly: Circle went public on the NYSE on June 5, and its stock price soared over 600%. This first stablecoin stock is undoubtedly one of the most eye-catching fintech IPOs of 2025; CoinBase (COIN) also saw a monthly increase of 43%.

This surge is backed by the U.S. Senate's passage of the first federal regulatory bill for stablecoins, the "GENIUS Act" (Guiding and Establishing National Innovation for U.S. Dollar Stablecoins Act), on June 17. This bill establishes a federal regulatory framework for stablecoins for the first time, clarifying that issuing institutions must hold reserves of 1:1 U.S. dollars or short-term U.S. Treasury bonds, and prohibits algorithmic stablecoins and interest-bearing stablecoins. Circle's USDC is the second-largest stablecoin globally (with a market cap of $61 billion), and its significant compliance advantages have made it the preferred choice for institutions. The post-IPO surge reflects the market's strong expectations for "regulatory dividends."

The table above shows the "stress test" for different assets during downturn cycles. In each downturn cycle, cryptocurrencies fell more than U.S. stocks, which fell more than bonds (the higher the risk, the sharper the decline). However, in 2025, Bitcoin's decline has narrowed, and its volatility has been minimal, indicating that institutional entry has enhanced the maturity of the crypto market.

The trend of "issuing stocks to purchase coins" on the corporate side further reinforces this coin-stock linkage logic. According to the "Monthly Outlook: Three Themes for 2H25," as of April 2025, 228 publicly listed companies globally held a total of 820,000 Bitcoins, with Strategy (MSTR) holding nearly 600,000 Bitcoins (2.5% of total Bitcoin supply), with an average cost of about $68,000, yielding a floating profit of over 200%.

Tech giants like Tesla are increasing their Bitcoin holdings through convertible bond financing, incorporating digital assets into the structural allocation of their balance sheets, forming a new capital operation model of "issuing stocks to purchase coins." This trend of corporate entry is shifting from "strategic deployment" to "institutional acceptance," which not only supports Bitcoin prices (which rose 10.6% in the first half of 2025) but also enhances the legitimacy and market recognition of crypto assets. Strategy CEO Michael Saylor stated, "Bitcoin has become a core asset for companies to combat inflation, and we are pushing for it to become the global reserve standard." Data from Deutsche Bank shows that stablecoin settlement volume reached $28 trillion in 2024, surpassing the combined total of Visa and Mastercard, validating the business potential of institutions like Circle and revealing the ability of blockchain payments to reshape the global clearing system.

Looking ahead to the second half of the year, if the GENIUS Act passes in the House and is signed by Trump, it will officially usher in a new era of stablecoin regulation. Compliance will accelerate institutional capital inflows, and the boundaries between traditional stock markets and the world of cryptocurrencies will further merge, reinforcing the "coin-stock linkage." Crypto stocks may continue to be strong, becoming a core driver of structural trends in the U.S. stock market.

In June, Bitcoin prices demonstrated resilience amid complex circumstances: When the Israel-Palestine conflict suddenly escalated in mid-June, Bitcoin briefly fell below the $100,000 mark but quickly rebounded, returning above $100,000 and showing independent market behavior, gradually decoupling from traditional risk assets. Recent research from the Gemini exchange and on-chain analytics firm Glassnode indicates that institutional investors are continuously increasing their holdings through ETFs and other channels, the structural changes in the market are reshaping its volatility characteristics.

Reflecting on the first half of 2025, although the factors influencing short-term prices are still primarily driven by capital supply and geopolitical conflicts, on a more fundamental level, the crypto market may be experiencing the most profound paradigm shift since its inception, as its development trajectory can no longer be simply defined by market sentiment or technical indicators, but is presenting new vitality under the combined forces of technology, capital, regulation, and ecology. The market performance in June clearly reveals that this industry is gradually transforming into a mature digital asset infrastructure.

Among them, the wave of institutionalization reached new heights in June, with the global crypto ETF scale surpassing $1.1 trillion, a milestone, with BlackRock's Bitcoin ETF alone attracting $4.9 billion in net inflows for the month. More notably, the level of participation from traditional financial institutions is undergoing a qualitative change; for example, Goldman Sachs has begun offering Bitcoin collateralized loan services in collaboration with CoinBase, a level of participation that far exceeds Wall Street's tentative layouts during the 2021 bull market. Meanwhile, the Federal Reserve's shift in monetary policy expectations has injected new variables into the market. Historical data indicates that the Federal Reserve's rate-cutting cycles are typically accompanied by significant increases in Bitcoin.

In terms of regulation, the passage of the GENIUS Act in the U.S. and the establishment of a stablecoin licensing system in Hong Kong mark the initial compliance framework that major financial centers have built for digital assets. This policy certainty is attracting more traditional capital into the market.

Additionally, White House digital asset policy advisors have revealed that the U.S. is working to build strategic Bitcoin reserve infrastructure. The executive order issued by Trump in March of this year did not mandate the Treasury to disclose the government's Bitcoin holdings, and we can expect it to proactively release relevant information in the second half of the year. The advisor also added that the U.S. government is "highly inclined" to increase Bitcoin holdings in a budget-neutral manner. This means that the U.S. government will provide funding support for Bitcoin purchases through internal fund restructuring or cost savings without increasing the fiscal deficit or taxpayer burden.

In short, looking back from the midpoint of 2025, the development trajectory of the crypto market has fundamentally differed from the early purely speculative-driven phase.

Standard Chartered's head of digital asset research, Geoffrey Kendrick, has predicted a target price of $200,000 for Bitcoin by the end of 2025. The dominant narrative behind this market cycle has shifted from being linked to risk assets to being driven by capital flows, and capital is pouring in through various forms. Bitcoin is becoming a tool for reallocating funds away from U.S. assets, indicating that this rise is not just a price fluctuation but a reflection of global capital allocation and macroeconomic trends. In this sense, the second half of 2025 is likely to be a historical turning point for the deep coupling of the traditional financial system and the digital currency ecosystem.

Currently, BTC prices are maintaining a high range of $100,000 to $120,000. Looking ahead to the second half of the year, with the potential for a Federal Reserve interest rate cut, continued growth in corporate crypto adoption, and clearer regulatory policies, a new round of steady development is expected.