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2025since mid-year, the crypto market as a whole is showing high volatility and downward pressure, with major asset prices continuing to correct, trading volume shrinking, and investor confidence lacking.As of yesterday, the total global crypto market value was approximately US$3.33 trillion, a decrease of approximately 20-30% from the peak at the beginning of the year,BTC dominance rate is stable at around 55%,Volatility is as high as 40%, well beyond 2024.Market sentiment is leaning towards caution.
CryptoQuant’s on-chain data shows thatExchange BTC reserves have dropped by about 8% since early August, and the USD reserve value has dropped from about 3000 billion fell to 250 billion in November.thisIt shows investors withdrawing funds from exchanges (toward self-custody or safe-haven assets), reinforcing the selling signal.
After a brief rebound in the first half of 2025, mainstream Token prices entered an adjustment period from October and further dropped in November. The prices of the Top 50TokenPrices are almost back to levels seen in the post-FTX crash period of 2022.
To summarize the current state of the crypto market in 2025, this includes:
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Mainstream tokens such as SOL, ETH, and BTC have all returned to their prices in December 2024; the four-year cycle theory is invalid, and industry participants need to adjust and adapt.
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Explosion in the number of tokens: In the past four years, the issuance model of most tokens has been a low circulation, high FDV model.After the Meme wave, the number increased rapidly; currently, new projects are launched every day, the supply on the market is huge, and funds are becoming increasingly cautious. Unless new buyers continue to pour in, it will no longer be enough to offset the large-scale unlocking of projects.
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The market has entered the concept reuse period: lack of innovation; there are a large number of unnecessary technologies;
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Difficulties in project implementation: The economic model has poor incentive and regulatory effects; many projects have not found product market fit (PMF);
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Weakness in airdrops: Airdrop Tokens are immediately converted into stablecoins by users;
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The difficulty of trading has increased significantly: competition will be extremely fierce for any target that is worth trading and has sufficient liquidity.
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Tight capital chain: VC investment has shrunk, with total financing accounting for only about half of 2024, and project parties’ capital chains are tight.
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Endogenous problems occur frequently in the industry: the 10.11 “Black Swan” incident; frequent hacker attacks (losses exceeded US$2 billion in the first half of the year); Layer 1 chain congestion incidents, etc.
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DeFi yields have decreased: Compared to 2024, DeFi yields have dropped below 5%.
This is more of a structural adjustment, similar to 2018, but on a larger scale.This creates difficulties for almost every market participant, whether they are users, traders, meme geeks, entrepreneurs, VCs, quants, etc.
Especially after the 10.11 Black Friday, many crypto traders and quantitative institutions suffered losses, and the concern of institutional thunderstorms still exists. This incident means that speculators/professional traders/retail investors are all facing capital losses.
The participation of traditional financial institutions is concentrated in BTC and payment, RWA, DAT strategies, etc., and is relatively separated from the Altcoin market.Bitcoin spot ETFs had an overall strong performance in October, with record net inflows of $3.4 billion, but saw massive outflows in early November, partly reflecting profit-taking at the market’s high price level.
Now, with market expectations of the government shutdown ending, official liquidity is expected to return.How will the crypto market perform in the last two months of 2025?
The increasingly clear direction remains: BTC and stablecoins.
(1) BTC: Macro liquidity cycle replaces halving narrative
As market consensus gradually shifts, analysts believe that the global liquidity cycle, rather than the simple Bitcoin halving event, is the core driving force for the bull-bear transition.
According to Arthur Hayes’ recent core “The four-year cycle is dead, the liquidity cycle is immortal”.He believes that the past three rounds of bull and bear markets were all related to the large-scale expansion of the USD/CNY balance sheet., highly consistent with the period of credit easing with low interest rates.Currently, the accumulation of U.S. national debt is growing exponentially.In order to dilute debt, the Standing Repurchase Facility (SRF) will become the government’s main means; the growth of SRF balance means the simultaneous expansion of the number of global legal currencies.inUnder “stealth quantitative easing”, the upward trend of BTC will not change.
It is believed that the Standing Repo Facility (SRF) will become the government’s main means. As current money market conditions continue and the accumulation of national debt grows exponentially, the SRF balance will continue to rise as the lender of last resort.The growth of SRF balance means the simultaneous expansion of the number of global fiat currencies, which will reignite the Bitcoin bull market.
Raoul Pal’s cycle theory similarly states that the end of each crypto cycle stems from monetary tightening.Judging from the data, the total global debt has reached about 300 trillion U.S. dollars, of which about 10 trillion U.S. dollars (mainly U.S. Treasury bonds and corporate bonds) are about to mature.To avoid a spike in yields, massive liquidity injections are needed.Its model estimates that each additional $1 trillion in liquidity could be associated with 5-10% returns on risky assets (stocks, cryptocurrencies).The $10 trillion refinancing scale may inject $2-3 trillion in new funds into risk assets, thus strongly promoting the rise of BTC.
The above ideas are dominated by the liquidity cycle of global central banks, providing a long-term macro environment for scarce assets such as BTC to rise.
(2) Stablecoins: moving towards financial infrastructure
Another thread in 2025 is stablecoins, whose value is not “speculative narrative” but “real adoption.”
The latest policy benefits have been released: the U.S. Congress is pushing to empower CFTC(CFTC) greater jurisdiction over cryptocurrency spot markets.The CFTC is expected to introduce a policy early next year that could allow stablecoins to be used as tokenized collateral in derivatives markets.This will first be trialled on U.S. Clearing HousesPoints, along with stricter supervision, will open the door for stablecoins to enter the core areas of traditional finance.
The scale of stablecoins is expanding rapidly, far exceeding market expectations.Major institutions in the United States have taken the lead and are committed to building a new payment network with stablecoins as the core.
In the face of the explosion of real application scenarios, the value of stablecoins is to “play stably” in scenarios such as cross-border transfers, exchange rate risk control, and corporate settlement and allocation.
In the past year, it has struck a balance between speed, cost and compliance, initially forming a compliant, low-cost, traceable global capital channel, and is gradually becoming a usable financial settlement layer in the real world.As an infrastructure, the status of stablecoins is being consolidated through supervision and practical applications, providing stable blood for the entire crypto economy.
This also has implications for entrepreneurs: entrepreneurial teams need to consider “nativeizing stablecoins” in their business processes, and the target market should aim at the “population suitable for stablecoins” and find a truly suitable product-market fit (PMF) on this basis.
