2025 Crypto Assets Market Review and Outlook

In 2025, the Crypto Assets market experienced a series of significant events and changes in the macro environment. At the beginning of the year, a political shift toward Crypto Assets drove price increases, with Bitcoin and Solana reaching all-time highs in January. However, the market subsequently underwent a substantial correction, primarily caused by macro factors and industry-specific issues.

From a macro perspective, the market is concerned about the increasing policy uncertainty and the risk of stagflation. The tariff policies implemented by the new government have lowered consumer confidence, corporate profits, and GDP expectations. The establishment of the Government Efficiency Department (DOGE) has also brought uncertainty to government employees and related businesses. In addition, the adjustment of expectations for artificial intelligence hardware demand has also hit market sentiment.

The digital asset industry faces some unique challenges. The burst of the Memecoin bubble and the hacking incident at the world's second-largest exchange have weakened market confidence. In the first quarter, the median token price fell by more than 50%. However, tokens with strong fundamentals performed relatively well, outperforming those without revenue by 8 percentage points.

Despite experiencing a significant pullback, such volatility is not uncommon from a historical perspective. During the last bull market, Bitcoin saw multiple pullbacks of over 20%. The current pullback may signal a strong rebound in the future.

Multiple market sentiment indicators suggest that the worst phase of the sell-off may be over. The U.S. Economic Policy Uncertainty Index is at its highest level in 40 years, the Crypto Assets Fear and Greed Index is in the extreme fear range, and Bitcoin futures funding rates indicate strong bearish sentiment. These extreme emotions often signal a good time for price bottoming and future returns.

At the same time, favorable interest rates and liquidity conditions are beneficial for risk assets. The yield on 10-year U.S. Treasury bonds is on a downward trend, and global liquidity conditions continue to improve. Historically, the main upward trends in Bitcoin prices tend to occur during periods of increased liquidity.

From another perspective, significant macroeconomic events that occur approximately every four years seem to align with the price cycles of Bitcoin. Currently, a trust crisis in the dollar is unfolding, which may increase the appeal of Bitcoin as a non-sovereign store of value.

Recently, digital assets have begun to show relatively strong signs. In April, some digital assets rose while U.S. stocks fell. Additionally, many positive industry developments may not have been fully absorbed by the market, including favorable policies and improvements in fundamentals. Blockchain companies are generating considerable revenue, and user activity and stablecoin usage continue to reach new highs.

Despite the uncertainty in the market outlook, sentiment indicators suggest that the most aggressive sell-off may have passed. As the volatility brought by tariffs gradually subsides, investors may refocus on long-term positive factors and strong fundamentals. As a pioneer of growth assets, Crypto Assets are expected to rebound and perform strongly.